4 planning and creating a value proposition the offer

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%)


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? 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


Up-Selling


Up-selling is the promotion of more
expensive products or services
over the product or service
originally discussed or purchased.


8 Components of the Offer
1.
2.
3.

4.
5.
6.
7.
8.

Product or Service
Pricing/Payment Terms
Trial or Examination Period
Guarantees
Sweepstakes or Contests
Gifts and Premiums
Let’s now
Time Limits
examine
each
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 strategy-begin 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 “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


5 Steps to Creating an
Offer
1.
2.
3.
4.
5.

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)
1.
2.
3.
4.
5.

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 do I want my Prospect to do?