The Art of the Special Offer
If your customers buy your products or services at any price you offer, then consider yourself uniquely skilled at generating demand. For most of us, though, we need to provide a push. Competition is fierce, and the need for creating smart, relevant offers is greater than ever. But a special offer should serve to grow your business and be the first step in establishing great relationships. An offer is an enticement, and should be strategic and adhere to a set of rules to be worthwhile.
Here are nine common sense guidelines:
Special offers are important for all markets.
Including yours. To emphasize exclusivity, offers should be related to specific targeted campaigns. They are not a general free-for-all.
Know the true cost of your offers.
Your offer should stimulate great relationships and drive future business, and should not be a one-time rummage sale. To do that, you’ll need to know how the offer relates to the overall value of the sale. When you understand the financials behind your offer, it keeps you from giving too much – or too little – away.
Offers must be relevant.
A free doo-dad that has nothing to do with the product or service is irrelevant. And if irrelevant, then the offer provides no value.
Beware of FREE.
A free sample at Costco is one thing. And it’s fine to give away a free pen or mug, but that’s not being very creative. For savvy customers – the kind you want to have and keep — free frequently equates to valueless. Tread lightly here.
Never, ever offer more value to prospects than customers.
Don’t fall into that trap. Hiking prices after an initial special offer only angers your customer base, and that’s a failing strategy over the long term. Are you loyal to your cable, internet, or phone company, or tied to them because of lack of options or the hassles of switching? You know how they give preferential rates to new customers, and then pump up the fees. That only has customers looking for alternatives when prices go up.
Time date offers to stimulate quick action.
Tell your customers to Act Now! Communicate expiration dates. Have a second, nearly as lucrative offer if your customers miss the deadline, but don’t extend it for too long.
Understand lifetime value, and calibrate your offers accordingly.
If your lifetime value is high, you might be able to afford to give a reasonable hefty offer to turn a prospect into a customer (but not too hefty, see immediately below). Then create a retention strategy to make sure they stay customers.
Deep discounting will devalue your product/service.
Excessive discounts can devalue your offering. Tread carefully with clearance sales. While they clear inventory, they won’t attract the customer base you need for an ongoing and successful business.
Test your offers.
How do you know you are crafting the optimal offer? If you’re not testing them, you don’t. Create variations, and send them to the same demographic. Don’t know how? If you’re testing Offer A against Offer B, take your customer/prospect list in zip order and divide record one into List A, record two into List B, and so on. It’s called an A/B split. Deploy, and see which list outperforms the other.