The 4 Elements of an Irresistible Offer
"Retailers have shot themselves in the foot, there are so many offers and sales all the time, people are conditioned to wait to get a deal," says Beth Smith, owner of Smith Browning Direct, Inc., a Flagstaff, Ariz.-based direct marketing consulting firm.
She was one of many speakers at the Direct Marketing Association's annual conference this week in Chicago.
"Offers are bait," Smith explains, and the businesses that succeed package the bait in a way that's attractive to consumers. Smith shared four key components of an irresistible offer, and highlighted several direct marketing campaigns that successfully implemented these strategies.
1. Package the bait.
Businesses should be prepared to communicate their unique selling proposition --what distinguishes them from the competition. "What do you have that's new, different or better than what others have?" Smith asks.
For example, earlier this month, airline Jet Blue announced it would allow family members to pool their miles at no additional cost. And last year, T-Mobile in the Netherlands entered the competitive music service business by offering a number of playlists for different occasions, such as the "Run Till You Drop" playlist for runners and "Time for Another Drink" playlist during happy hour. By "packaging the bait" and making it easy for consumers to try the service, the campaign netted trial numbers at 700 percent over their target and paid conversions at 12 percent over their target.
2. Mention the savings.
If you're going to offer volume discounts for a service, such as $9.99/month or $99/year, always do the math and include the actual savings on the ad, Smith says. This lets the customer see the actual benefit. Businesses should also consider the long-term effect of offering discounts on sales, Smith says. For example, does the customer make a repeat purchase? Does the discount cannibalize full-priced sales? In other words, are you simply shifting the timing of the purchase?
3. Throw in an incentive.
Incentives can give consumers an opportunity to try something with low risk, or offer a "free gift with purchase" that appeals to the target audience for a product. For example, tax preparer H&R Block offers a free "Second Look" review, where tax specialists review a tax return to find deductions that may have been missed. This type of offer makes customers say, "I'd be crazy to ignore this," Smith says. Premiums or gifts that enhance a product or service, are popular as well. Just be careful that the gift doesn't overshadow the product. Smith suggests watching to see which programs businesses repeat; they'll repeat what's worked for them.
4. Create a sense of urgency.
A free trial or low-risk commitment offer is another way to get consumers to act, Smith says. Last summer, eBay offered consumers the chance to sell one item on its mobile platform for free over a three-day period. And Boost Mobile's retention strategy gives customers a $5 reduction in their bill every six months for on-time payment.
Businesses may set deadlines or limits to encourage consumers to get off the fence and act, Smith says. For example, online retailer eBags has a "Steal of the Day" offer with a limited number of bags available. The site also shows the remaining quantity available, as well as a message to "Hurry, there are X people shopping now." Smith says this gets consumers asking, "What am I going to miss out on if I don't respond?" If you're going to run a limited time offer, Smith suggests providing an end date, between two and four weeks.
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