How to create a great offer
Before you begin designing your direct marketing offers, it’s beneficial to understand how best to segment your data as it’s likely that different audience segments will respond in different ways depending on the offer.
You may decide to segment your customers by activity level such as:
- Actives (have done business with you in the last 12 months)
- Recently lapsed (have done business with you in the last 24 months but not in the last 12 months)
- Long term lapsed (haven’t done business with you in the last 24 months)
- Prospects (have indicated that they’d like to do business with you but haven’t yet)
In the initial stages it makes sense to keep things simple by perhaps just coming up with one offer that you believe will be strong and then tracking the response rate to it by the segments above. This is a good test to get some insights before getting too clever.
Once you have decided on what audience segments you are marketing to, it’s time to design your offers. Things to consider include:
- What is the product / service being offered?
- What additional value / benefits / discount can you provide to encourage people to take up the offer now?
- Is the price point competitive?
- What is the end date of the offer?
- What are the mechanics of the offer?
- Are there any restrictions?
The additional value/benefits/discount may involve something as simple as ‘access to exclusive information’ or ‘priority on a waiting list of some sort.’ You don’t have to necessarily discount or give something expensive away. You just need to understand the motivations of your audience segments and design an offer that’s attractive to them. You may find that your less active groups are motivated by things such as deferred payment options or payment instalments or perhaps even appropriate recognition such as that they are a foundation customer of your business.
It’s important that your offer includes an end date to motivate people to respond within a certain time-frame. Without this, you’ll find that the duration of your campaign will be much longer and is likely to lose steam.
It’s also important that you clearly advise customers and prospects what you want them to do and how you want them to do it, along with any mechanics or restrictions of the offer.
It’s also possible to use one offer to achieve a number of outcomes. For example you could reward people who buy a product with an entry into a sweep-stake and you could also reward people who introduce a friend to start using the product, a bonus entry. The offer can be as complicated or as simple as you want to make it, as long as it’s fair for all concerned and can be easily and logically communicated so that you don’t confuse your audience.
Sophisticated offer design utilises all the techniques above plus incorporates customised messages and creative execution so that you present the offer to your target group of customers in a way that is most relevant to them. This may involve an area of the general communication piece that is targeted to them and a personalised letter that points them to this particular offer. For less active segments you may find that a different communication method such as a postcard or a phone-call works better.
Like every other area of direct marketing, great offer design, involves a commitment to the testing process so that you can continuously refine and improve offers to various segments over time.
With knowledge gained through testing , it’s likely that you’ll find that customised offers, combined with customised messages perform the best to specific audience segments as it increases the relevance of the communication to them and that’s what good direct marketing is all about.
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