Always have an offer

[cocoy]

Every postcard, sales letter, print ad, etc...should have some kind of offer to entice the potential customer.

Your thoughts?

[vangogh]

Simply brainstorming some thoughts here.

I'm thinking it depends a little on the goals of the card, etc. You might do something purely for branding. Think about sending out a Christmas card. You wouldn't necessarily have an offer in there, though you could certainly design the card to have one.

"As a Christmas gift we'd like to offer you 20% off on..."

What's probably more important is making sure the offer fits the contact. If you're sending a postcard to people who've never connected with you in any way they probably aren't going to send you a check for a large purchase. However if interested they'd more than likely type your URL into a browser.

I guess I'm thinking of it less as an offer and more as enticing them to do something. Maybe the enticing is just to get them to your website for more info. I agree there should be some kind of call to action. You sent them the card or placed the ad for a reason. You want people to do something after seeing it so yes there should be a call to action.

[Just H]

I agree with VG - seems there's a reason you're sending something out. Does offer apply to both discounts/your promotions as well as something for the customer? (Ie...As a thank you for booking your company's Christmas party with us, we'd like to offer you and a guest a complimentary dinner in our restaurant on the night of your choosing.)

I think there may be other reasons to send out marketing however. Take a successful branch that has a large customer list. Sending out the notice of opening another store in their area, or an Open House (real estate) to the area so that neighbors can go through and see what their house may be worth - don't need to include additional offers and actually could be assumptive or insulting if you're trying to sell them on a realtor they haven't contacted or giving only a percentage off a meal meaning you're coming in and spending more money after booking a large engagement.

As with anything and everything, I don't believe there's any black or white.

[vangogh]

Yeah it probably depends on why your sending out the marketing and what the form of the marketing is. There are companies who know my birthday and every year I get a birthday card from them. There's no offer, it's a simple card with a nice wish. Granted that card doesn't directly get me to buy anything, but it does leave me with a positive feeling about the company and makes me more receptive to an offer they send me a month later.

I think it's more important to have a strategy in place and understand the function of the postcard or print ad within your strategy.

Another thought is that most people aren't going to respond to your first ad. They probably won't even notice it. So instead of pitching the offer on the first mailing maybe the whole point of that mailing is to get them to notice it and prepare them for the next mailing a week later. Perhaps it's not until the 5th mailing that anyone responds. In that case your first few mailings may not need to include any offer, though they could hint at the offer to come to build anticipation.

Again it really depends on your overall strategy and how the particular mailing fits into that strategy.

[KristineS]

I don't necessarily agree that every communication should have an offer. Granted the relationship between business and customer is an economic one, but sometimes it's nice just to say Thanks for your business or to give customers a piece of helpful information without selling them as well.

I'd amend the original statement to say "most" communications should have an offer.

[Blessed]

I think everyone has made good points here. Most, but not all, communications should have an offer or a "call to action" but the occasional informative or simply thankful for the business communication should be allowed for - and those don't need an offer or a call to action.

[cocoy]

Not necessarily every communication, but more in the lines of attracting new customers. i.e. print ad or direct mailing.

Wouldn't this be better:

Window washing service. Call xxx-xxx-xxxx and get 20% off!

Than this:

Window washing service. Call xxx-xxx-xxxx!

If you're paying all that money to advertise why not just add a little incentive while you have the person's attention?

[huggytree]

when i see 20% off i always think its normally an over priced product....Pizza hut for example....when you pay full price its overpriced...but they have sooo many coupons everywhere no one pays full price....it becomes annoying when we want Pizza Hut but cant find a coupon. I dont think their pizza is worth $16...but for $10 its a good deal.

in the plumbing business only the high price guys give coupons...$10 off on a water heater for example...they put a sticker on every waterheater they see....wow $10 off when you charge $1,100 and i charge $865. my normal price is a good enough deal..and i never try to be about the money anyways..this economy is making me think about it more and more, but im still the same price i always was....the high end customer is almost never about price (in my opinion)..they want it done right and be treated right....if it saves them time they will pay almost anything for the service.

...i dont use coupons other than the food store...

i never offer money off....maybe thats a flaw in my marketing...or maybe not...

[Spider]

When your business is one-off, coupons and discounts might be a suitable sales gimmick, but not if you are trying to secure regular, repeat customers. How insulting to know that you are a regular customer but have to pay more than the one-time casual shopper.

In my wife's pet grooming business, she never offers coupons for first time customers but gives a 10% discount to all regular customers. A regular customer is much more valuable than a walk-in ,and customer loyalty - or regularity - is best encouraged.

[Burn Creative]

No, I don't think every marketing communications piece should have an offer. It should definitely have a clear message even if it's just a general ad or mailer to keep your name out there in front of your target market.

Spider is right too. You don't want to end up only attracting the bargain basement shoppers who will only show up to get the lowest price possible.

That is a common mistake with a lot of designers who offer to do work for deep discounts and sometimes even for free in hopes of winning over clients. What usually happens is that the client gets what they want and then quickly head for the hills as soon as you try to charge standard rates.

[vangogh]

What usually happens is that the client gets what they want and then quickly head for the hills as soon as you try to charge standard rates.

Or they continue to recommend you to people who are only interested in the deep discounts making you wish they had headed for the hills instead. :)

[billbenson]

Out of my field of expertise, but suppose you included in a mailer a discount coupon or free meal at a new restaurant. Free sandwich at Bob's Deli or the likes. You give Bob $4 for each coupon he gives you. Mark the coupons so you know which prospect used it. Next mailing, just use the ones that used your coupon?

Better yet, donate the money to some charity. "Bobs deli and "your business" have joined forces to help the homeless this winter..." Or some non political charity. Your prospect gets a free sandwich, you and Bob help a charity, and it gives you a reason to follow up with the prospect and say "we raised $X for charity with your help".

Just a late night idea??

[vangogh]

Mark the coupons so you know which prospect used it. Next mailing, just use the ones that used your coupon?

That's a good way to really start targeting your list. You might need to send out to everyone more than once, since some people who might be interested may still not respond to your first offer, but tracking who has responded after a few mailings is a great idea.

I like the charity angle too. We talked in another thread about how it could backfire on you, but I think if you pick the right charity it can be a win-win situation.

[cocoy]

20% off is just an example. It doesn't have to be a discount.

Even things like, "Free Estimate" would be considered an offer.

[Remipub]

I recently read a book called "Instant Advertising" by a business coach by the name of Bradley Sugars. In so many words, he said that an advertisement without some kind of compelling offer is like throwing money away. And not just any offer, but one that really grabs the reader's attention. The fact is, we are inundated with ads every day and the ones that truly motivate us to act are those that will yield results. Many worry about cutting their margins too much - but an advertisement's goal is to get a customer in the door who maybe wouldn't have done so otherwise. Even if the margin is tiny, you (hopefully) made more money by making the offer than you would have had the customer not come in at all. And beyond the initial sale, you benefit from repeat business if you met the customer's expectations.

Then I think of all the companies that put out coupons or other specials routinely. Sandwich shops and pizza places come to mind. You might think - I only go there if there's a coupon so how much good can it do? Then ask yourself, if they didn't put out the coupon, but someone else did, who would get that business? Again, the margin may be smaller, but the alternative is the customer spends their money somewhere else.

[vangogh]

I'm not sure I completely agree. Some advertising messages could be for branding in which case there may not be an offer at all. You might just want to get your name out more or associate your name with something positive in the minds of potential customers. Take a local business. They might send something out to let you know about work they're doing on some local cause. There might not be any offer, but it could lead to community support in response for supporting the community.

Another thought is an ad campaign where there are offers along the way, but maybe not every ad contains an offer.

[Remipub]

Yes I completely agree vangogh. Not all advertisements are intended to sell something. The book I'm referencing was geared to sales oriented ads.

I once did a mailing series for a mortgage broker. The first piece was an informational piece dispelling some of the myths associated with mortgages. The next piece was more selling oriented, but soft sell then the 3rd piece had an offer and was more specifically about converting a sale.

Funny thing is, they got no calls from the first 2 pieces, but enough from the 3rd to make the mailing profitable. Maybe it was the repitition, maybe it was the offer - or maybe some of both.

[vangogh]

Makes sense given what the book was geared toward.

With the campaign you describe the result was likely tied to all three ads even if there was no response to the first two. By the time people received the 3rd ad they may already have been sold. All they needed at that point was the offer.

I think a lot of people see a mailing campaign in a short sighted way and focus on each mailing as having to do all the work. You really have to look at it from a campaign level. Not every thing we do marketing will lead to direct results, but each can contribute to the whole.

Branding generally doesn't lead directly anything tied to a specific message, but if you can build a brand all of your marketing messages will see a greater return.

[Ad-Vice_Man]

Bear in mind that an offer needn't be a discount....

An service technician non discount offer could be on time or we'll pay you $100 Cash. If you do what you'll say you'll do (which is clearing the bar with room to spare with service technicians) there's no cost.

For a service providor, it could be an upgrade in service level... ie not paying less but getting more. So buy a silver package and get the gold level service...

Think of the concept of a bakers dozen. A dozen is 12 but when you go to the baker it's 13.

There are all manner of ways to make promotional offers that don't involve reducing your prices... you just need to get creative... and do something your competitors can't, won't or don't think to do.

[vangogh]

Good point. Another option is to offer something free with a purchase. You could take old inventory that's simply filling up storage space and offer it as a giveaway in combination with a purchase.

There really are an endless supply of offers you can make that don't involve a direct reduction in price.

[Vivid Color Zack]

I think every ad or piece should have a call to action of some kind, but not necessarily a promotion or an offer.

Most of you have been hitting on the variance in industries for effectiveness and I completely agree. There are a few services that I choose specifically because of their coupons in an ad. Smog checks for example, I ONLY go to the cheapest place I find in the pennysaver because it's just a smog check. I don't need to trust them to do it right or worry about them doing shotty work. They can't even unfairly charge me 'cause I have a coupon right there with the price on it.

Dry cleaners - I usually will give one a try when I find a good coupon initially, but I'll keep going back if they're friendly and do good work quickly.

Restaurants that often offer buy one get one free cards - I pretty much only hit these places when I have a coupon. If the mexican place next to my house stopped sending me great coupons I'd never eat there because their prices are really high without their amazing coupons.

Bed Bath and Beyond - I get a 15% off coupon weekly in the mail, why would I go there without the coupon? At the same time why would I go to any other home store and pay full price when I can get 15% OFF AT BB&B?

Most of my customers that come in with their first order I give discounted design rates to. They then expect those discounted rates in the future, even though I specifically say it's a first order discount. So I often just charge the regular rate and call it the new customer discount rate, which I continue to mention on all invoices so they feel like they're getting a great deal every time.

I try to avoid the word FREE whenever I can too. I think there was a thread/topic about this a while back talking about how people view free as having no value, or being of a lesser quality that is not worth charging for.

[vangogh]

I think every ad or piece should have a call to action of some kind, but not necessarily a promotion or an offer.

That's a good point. The call to action on your print ad might be to get them to visit the website. It might simply be to get someone to view the next ad in the series.

I'd say not every add needs the promotion. Some could be the first in a series of ads and the goal might only be to prime people for the offer that comes next week or next month.

[graphic designer]

Discounts sounds like you are desperate...but on the other hand if you gets you leads why not ?

<Please set up a signature through your control panel. Thanks.>

[Steve B]

I agree with Huggy. I've done both types of advertising and there was zero difference in the results. When I got calls from the advertising with coupons the vast majority of them never mentioned the coupon and I found myself reminding them about the discount.

My competitors offer a $100 coupon - printed right into every brochure they ever hand out. The disclaimer says that you must tell the salesperson about the coupon before they give you a quote ... hmmmm I wonder why?? There regular prices are always several hundred more than mine - with or without the discount.

Anyway, I don't offer coupons anymore.

[KristineS]

It is funny. You think that coupons would make a difference, particularly with a lot of people focusing on reducing expenses right now, but they really don't seem to do so. We've offered coupon codes for things like free shipping and such, and I've seen customers that I know have the code place orders and neglect to use the code.

Given that, I'm not sure how much of a motivator a coupon can be.

[vangogh]

It might depend somewhat on the details of the business and the coupon. As a consumer a coupon generally doesn't get me to buy, though it might if the discount is for something I was thinking of buying and the discount was enough to motivate me. 10&#37; for something I wouldn't otherwise buy isn't going to get me into the store. 30% off might if I was even slightly inclined to buy.

I think coupons work better toward getting people to take action now. Say someone is thinking about buying your product or hiring you for your services. For whatever reason they haven't. A coupon could get them to finally make that decision.

A number of years ago I worked in a picture framing shop. The owner used to run coupons every month in two coupon books in the area. They were usually 30% off your frame or 15% off your entire order (both worked out to be about the same amount of money in the end). Easily half of all the people who walked into the store had one of the coupons in hand. They definitely worked for that shop.

[Steve B]

"They definitely worked for that shop."

Or, perhaps the owner was giving 15&#37; of his revenue away for no reason. Maybe he would have gotten all (or most) of those sales anyway. Seriously, I'm sure it worked for him, but it's hard to say to what degree since he would have gotten some percentage of those sales anyway.

[vangogh]

No. Every so often he would stop the coupon and business would slow up. I'm not sure why, but those coupons did work. Other things he did to advertise never brought a customer in.

The 30&#37; sounded great, but it wasn't a lot of money, particularly if you didn't buy an expensive frame. I also know how much things were marked up above cost so I know he was making good money.

I'm not suggesting coupons will work for everyone in every business. As a consumer they hardly every work on me. But for some reason they did work for this business. It wasn't like business was non-existent when the coupons weren't running, but even then we'd get people coming in and asking if there were coupons out and if not they'd hold off on their order. And it really wasn't a lot of money for the shop. The discounts through the coupons were less money than some of the other advertising he tried that didn't bring in any customers.

[Steve B]

"if not they'd hold off on their order"

It's sounds like he had them well trained. That's the fear that a lot of businesses have - once you start using coupons you will train the public not to pay full price. I'm sure it was overall positive for him - but there is a potential downside that is hard to measure.

[vangogh]

I disagree. The coupons worked as advertising for him. They worked to bring people in the store and the cost of the discount was a lot less than the cost of other advertising that didn't bring in anyone and that he was able to drop.

You're generally going to have to spend some money to get people in the door and turn them into customers. In some cases you're spending that money on a phone book ad. In another it could be a radio spot. Obviously there are lots of different ways you could advertise. A coupon is essentially the same thing. It's giving out some money to take in orders. For whatever reason that's what worked best for this business. As someone who worked there I can absolutely say they worked and brought a lot of money into the shop.

Would those same coupons work in another business? I couldn't say. I do think it depends on the business. But overall I think the coupons are an expense just like any other kind of advertising.

[KristineS]

I shop at several online clothing stores, and most offer at least a monthly coupon if not a weekly special. Have they trained me to wait for the specials or the coupons? Yes, in a way. The reality is, however, that some of these stores are a bit pricey and the coupon, which is usually either free shipping or a percentage off, gives me enough motivation to buy. True, they might be losing 20 or 30&#37; on a sale, but it's a sale they wouldn't otherwise have gotten at all. Do that with enough customers and your business will be doing fine.

Coupons don't work for every business and with every person. I know people who swear by coupons for grocery shopping, they don't motivate me at all. That doesn't mean they won't work for some people, and it doesn't mean that some people won't use them to save a ton of money. They're just not something that particularly motivates me. That's why good Marketing Plans have multiple motivators in them. What works with one group might not work with another.

[vangogh]

Some of this depends on the nature of the coupon too. We've all seen so many coupons now that 5&#37; is meaningless. We know it's not a real savings and we know the company will likely offer a similar coupon next month or next week. But a 50% off coupon is special. That should get people in the store. Sure you're losing half the price of each sale, but if the coupon brings in enough people you make it up in volume.

Would you rather make $50 profit from one sale or $25 profit from each of three sales? You don't make as much per sale for the latter, but you do make more money overall.

[cocoy]

But overall I think the coupons are an expense just like any other kind of advertising.

Good point. I've never thought of it that way.

I've had both types when I include a discount.

Some mention it and some don't and they don't really care if they get one or not.

[vangogh]

Based on whether or not they ask for the discount you should begin to get a feel for how well the coupon is working as an advertising vehicle. Some people will forget to bring them or ask about them, but odds are most people who were motivated by the coupon will have it with them.

[Spider]

This is what has been said already in numbers instead of words (numbers being a little more graphic)....

1 radio ad spot - $500 - brings in 10 customers. Each new customer costs $50.

1 coupon run (printing, mailing) - $500 - brings in 50 customers. Each new customer costs $10 plus the coupon discount, say $40 Off - Each new customer costs $50.

The same? No! 50 new customers has to be more valuable that 10 new customers considering the lifetime value of each new customer. Even if customers learn to wait for the coupons, they still have a lifetime value, and that lifetime value is likely to be higher if the customer is truly trained to return with each new coupon issued.

[vangogh]

Thanks for the numbers Frederick. Obviously a business would have to try both and measure how many new customers each form of advertising brings in and then figure the cost per customer, but you show a good example of how the coupons could work.

I think the main thing is to understand that coupons can be one way to bring in new and existing customers and maybe the cost ends up being less than other forms of marketing. I'm not endorsing coupons as a must do, but as a possible do.

[Steve B]

You need to re-read my post. I said "I'm sure it was overall positive for him".

The potential downside of the coupon is he had some customers that held off on their order. Which is what you told us in your post. The only point I made that didn't come directly from you is that I said the downside would be hard to measure. Did he have some way to measure how many customers would have paid full price and not waited for the next coupon?

I order regularly from a catalog that sells hard to find work clothes and gadgets. The first order I placed was at full price. Then I learned that I just need to wait a couple weeks for a free shipping or other similar offer. They would have earned a lot more money from me over the years without those discounts because I would have bought the same amount of stuff from them. There is no possible way for them to know how many people like me are out there. I realize they have enough margin built in to still make a profit on me, but they could have made even more.

[vangogh]

Steve, sorry if I misinterpreted anything. The part I disagree with though is this:


I realize they have enough margin built in to still make a profit on me, but they could have made even more.

In the specific case you mention with you and the catalog it might be true that they could have made more money on you specifically, but I think the company has to look at the overall picture here. Otherwise by the same logic you should always raise your prices until you reach the maximum any single individual will pay. Anything less loses money on that one individual.

I understand what you're saying about the coupons and how for some people it costs the business money. Obviously some people that would have bought without the coupon will now buy with the coupon. And I agree that's hard to measure since you only know who bought the coupon in and not how many of those people would have bought anyway. I just think this is one place you have to look at the overall more than the specific cases.

My bad for any misinterpretation and again I'm not suggesting coupons are a must. Simply one thing some businesses might try.

[Remipub]

Of course it depends on the business, but let's consider a pizza place as they are famous about putting out coupons.

Assuming all other factors are close to equal, Pizza Company A puts out a coupon for $5 off, Company B does one for $3 off and Company C has an ad with no offer. Most people will go to Pizza Company A, plain and simple. If they decide they want pizza two nights in a row, they'll probably hit up Pizza Company B the next night. Pizza Company C will only get business if there are no other options (in this scenario).

If you're in a business where competition isn't that tight (or when expertise is more important than price), an offer probably won't matter. But when a consumer is bombarded with several viable options, they will go with what they consider the best value. Pizza Company C may have a higher profit margin than the other two but the other two will get all the business. Margins mean squat if you don't get the sale in the first place.

[vangogh]

If you're in a business where competition isn't that tight (or when expertise is more important than price), an offer probably won't matter

Good point. It probably does make more sense to offer a coupon when your business competes on price to a degree. Though I'd suggest the coupon could still work as advertising even if it's not what drives the sale.

But definitely agree that success or failure will be based in part on the type of business.

[Spider]

What I tried to show using numbers was that a business must advertise and the coupon discount given is not a reduction of profit, it is a re-allocation of advertising cost. So, by training your customers to wait for your coupon, you are training them to wait for YOU, and come to YOU when you have a coupon out - rather than think of trying some other business because they haven't been trained to wait for your coupon.

In my example, customers from both advertising methods cost the same, so my profit would be the same on the lower couponed price as the regular price from the radio ad.

Radio ad - cost of new customer - $50 - item sold $200 - less ad cost = $150 revenue.
Coupon ad - cost of new customer - $10 - item sold $160 ($200 less coupon $40) = $150 revenue.

The gain (if it so transpires for your business) is the repeat customer, not the price markup on a single sale. A customer who comes to you once a week is going to be more profitable than one who shares his weekly business between you and another business. If you can train them to come to you, you have a winner.

The initial gain or loss is never the final result for your business. You must follow the money through your entire pricing/cost process to determine the final outcome.