Planning and Creating A Value Proposition: The Offer Opening Vignette Smart Spacing Hangers What is the Offer? The offer is the value proposition to the customer stating what you will give the customer in return for taking the action your marketing communication asks him/her to take It includes: The manner of presentation (media, creative, etc.) The request for a response Creating Need-Satisfying Offers Is part of on-going customer relationship management (CRM) that drives the direct and interactive marketing process When creating the Offer or Value Proposition … Always remember the 40/40/20 rule! The “40/40/20 Rule” states… The success of any DM effort is determined by: The right lists (40%) The right offer (40%) The right creative (20%) Characteristics of an Effective Offer (Lois Geller) Believability It has to make sense to the consumer Involvement It must attempt to get the customer involved Creativity It sets you apart from all the others Planning the Offer: Steps 1: Establish Objectives of the Offer “What is the offer designed to do?” Continuity sell? Cross-sell? Up-sell? 2: Decide on Attractiveness of the Offer Make attractive as possible, as “freebies” 3: Reduce Risk of the Offer Offer free trial or examination period of offer a money back guarantee 4: Select a Creative Appeal Offer appeals can be either rational or emotional Continuity Selling Continuity refers to offers that are continued on a regular (weekly, monthly, quarterly, annually) basis AKA- “club offers” Examples Book clubs, CD clubs, and magazine subscriptions Cross-Selling Cross selling is when new, related or even unrelated products are offered to the customer Beneficial strategy of direct marketing for profit maximization from current customer base Copyright© 2010 Pearson Education, Inc Publishing as Prentice Hall Examples of Ways to Express Price in an Offer Basic price statement “One year supply for only $12.99” Price stated as a fraction “One-half off when ordered by May 1st” Price stated by unit Price savings stated by percentage “Save 30% when ordered by May 1st” Price savings stated by unit Price savings stated by dollar amount Price savings based on introduction “Save $15 on your initial subscription” Price savings based on multiple purchases Price based on promotional offer “Now only $2.49 an issue” “First two issues are free” “Save $25” “Save $2.98 one two” “Buy one, get one free” Trial or Examination Period Helps overcome the risk factor of DM Very effective Guarantees Instrumental in overcoming a potential buyer’s reluctance to purchase an unseen product from a remote location Example: 30 day money back guarantee Double your money back Sweepstakes or Contests Often perforated tear-offs, diecuts, tokens, and stamps, as well as answers to questions, problems, or puzzles, are used Check state & local regulations Gifts and Premiums Effective device for stimulating or increasing response Can be offered for buying, trying, or inquiring Time Limits A part of the offer often involves limited quantity as well as specified time period “While supplies last” Continuity Positive option-customer must specifically request shipment for each offer in a series Negative option- the shipment is sent automatically unless the customer specifically requests that it not be more controversial Steps to Creating an Offer Perform Market Research Determine the Terms of the Offer Target the Offer Test the Offer Execute the Offer Step 1: Perform Market Research Analyze Customer Needs & Wants Determine Customer Motivations Develop Customer profile(s) Step 2: Determine the Terms of the Offer – (Product Details) A choice of sizes A choice of colors Personalization Product Specifications Product Accessories Step 3: Targeting An Offer What am I selling? Who am I selling to? Why am I selling this now? What I want my Prospect to do? Step 4: Testing the Offer (A Step Process) 1: Test only one feature at a time 2: Code your tests so you can measure results 3: Keep accurate records 4: Analyze test results and take action Step 5: Execute the Offer Get ready to implement— many details to address! “Roll-out” Some Popular Offers Free gift Offers Other “free” Offers Discount Offers Sale Offers Sample Offers Time Limit Offers Guarantee Offers Build-Up-The-Sale Offer Sweepstakes Offers Case study Old American Insurance Company ... relationship management (CRM) that drives the direct and interactive marketing process When creating the Offer or Value Proposition … Always remember the 40 /40 /20 rule! The ? ?40 /40 /20 Rule” states… The. .. free trial or examination period of offer a money back guarantee 4: Select a Creative Appeal Offer appeals can be either rational or emotional Continuity Selling Continuity refers to offers... gift Offers Other “free” Offers Discount Offers Sale Offers Sample Offers Time Limit Offers Guarantee Offers Build-Up -The- Sale Offer Sweepstakes Offers Case study Old American Insurance Company