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- 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 NeedSatisfying Offers
Is part of ongoing 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%)
- 3 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: 4 Steps
1: Establish Objectives of the Offer
“What is the offer designed to do?”
Continuity sell? Crosssell? Upsell?
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
- CrossSelling
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
- UpSelling
Upselling is the promotion of more
expensive products or services over the
product or service originally discussed
or purchased.
- 8 Components of the Offer
1. Product or Service
2. Pricing/Payment Terms
3. Trial or Examination Period
4. Guarantees
5. Sweepstakes or Contests
6. Gifts and Premiums
Let’s now
7. Time Limits examine each
8. Continuity component …
- Product or Service
It must satisfy the needs or wants of the
target consumer to whom it will be
presented
Product or service features must be
understood
- Pricing/Payment Terms
Price skimming begin price at highest level
Penetration strategybegin with low price
Price elasticity measures the consumer's
responsiveness or sensitivity to price
changes
COD, BML, Delayed payment, & installments
Price expression in the offer
- Examples of Ways to Express
Price in an Offer
Basic price statement “One year supply for only $12.99”
Price stated as a fraction “Onehalf off when ordered by May 1st”
Price stated by unit “Now only $2.49 an issue”
Price savings stated by percentage “Save 30% when ordered by May 1st”
Price savings stated by unit “First two issues are free”
Price savings stated by dollar amount “Save $25”
Price savings based on introduction “Save $15 on your initial subscription”
Price savings based on multiple purchases “Save $2.98 one two”
Price based on promotional offer “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 tearoffs, 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”
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