Chapter 4 - Planning and Creating A Value Proposition: The offer Flashcards
1
Q
What is the Offer ?
A
- The offer is the value proposition to the customer stating what you will give 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
2
Q
Creating Need-Satisfying Offers
A
- Is part of on-going customer relationship managment (CRM) that drives the direct and interactive marketing process.
3
Q
When creating the Offer or Value Proposition…
A
Always remember the 40/40/20 rule
4
Q
The “40/20/20 Rule” States
A
- The success of any DM effort is determined by:
- The right lists (40%)
- The right offer (40%)
- The right creative (20%)
5
Q
3 Characteristics of an Effect Offer (Lois Geller)
A
- 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 other
6
Q
Planning the Offer: 4 Steps
A
- Establish Objectives of the Offer
- ”What is the offer designed to do?”
- Continuity sell? Cross-sell? Up-sell?
- ”What is the offer designed to do?”
- Decide on Attractiveness of the Offer
- Make attractive as possible, as “freebies”
- Reduce Risk of the Offer
- Offer free trial or examination period of offer a money back guarantee
- Select a Creative Appeal
- Offer appeals can be either rational or emotional
7
Q
Continuity Selling
A
- Continuity refers to offers that continued on a regular (weekly, monthly, quarterly, annually) basis/
- AKA - “club offers”
- Examples
- Bool clubs, CD clubs, and magazine subscriptions
8
Q
Cross-Selling
A
- 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.
9
Q
8 Components of the Offer
A
- Product or Service
- Pricing/Payment Terms
- Trial or Examination Period
- Guarantees
- Sweepstakes or Contests
- Gifts and Premiums
- Time Limits
- Continuity
10
Q
Product or Service
A
- It must satisfy the needs or wants of the target consumer to whom it will be presented
- Product or service features must be understood
11
Q
Pricing/Payment Terms
A
- Price skimming - begin price at highest level
- Penetration strategy - begin with low price
- Price elasticity measures the consumer’s responsivnes or sensitivity to price changes
- COD, BML, Delayed payment, & installment
- Price expression in the offer
12
Q
Trial or Examination Period
A
- Helps oversome the risk factor of DM
- Very effective
13
Q
Guarantees
A
- Instrumental in overcoming a potential buyer’s reluctance to purchase an unseen product from product from a remote location
- Example:
- 30 day money back guarantee
- Double your money back
- Example:
14
Q
Sweepstakes or Contests
A
- Often perforated tear-offs, die-cuts, tokens, and stamps, as well as answers to questions, problems, or puzzles, are used.
- Check state & local regulations
15
Q
Gifts and Premium
A
- Effective device for stimulating or increasing response
- Can be offered for buying, trying, or inquiring
