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