In general, offers can be used effectively to:
- reactivate previous buyers;
- convert buyers (one-time purchasers) into customers (multibuyers);
- convert prospects to buyers; and
- convert inquiries to buyers.
Notice I haven’t included the core RFM (recency, frequency monetary) housefile segments, such as zero-to-12-month buyers, in our list. A large percentage of this group will purchase regardless. Yes, an offer will cause the response rate and/or AOV to increase, but you’ll end up giving away profit dollars to the largest percentage of your customer file: those who would’ve made a purchase with or without the offer. The incremental dollar increase as a result of the offer won’t be enough to offset the cost of the offer to your best customers.