4 planning and creating a value proposition the offer

Planning and Creating A Value Proposition: The Offer... What is the Offer? The offer is the value proposition to the customer stating what you will give the customer in return for taki

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%)

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 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 is the promotion of more expensive products or services

over the product or service

originally discussed or purchased

8 Components of the Offer

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

level

responsiveness or sensitivity to price

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 “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”

 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,

die-cuts, tokens, and stamps, as well

as answers to questions,

problems, or puzzles, are used

 Check state & local regulations

Gifts and Premiums

 “While supplies last”

specifically request shipment for each offer in a series

sent automatically unless the

customer specifically requests

that it not be

 more controversial

5 Steps to Creating an

Offer

1. Perform Market Research

2. Determine the Terms of the Offer

3. Target the Offer

4. Test the Offer

5. Execute the Offer

Step 1: Perform Market Research

Step 2: Determine the Terms of

the Offer – (Product Details)

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?

Step 4: Testing the Offer

(A 4 Step Process)

1: Test only one feature at a time2: Code your tests so you can measure results

3: Keep accurate records

4: Analyze test results and take action

Get ready to implement— many details to address!

“Roll-out”

Step 5: Execute the Offer

Some Popular Offers

Case study

Old American Insurance Company