Offer Testing Proves an Essential Strategy for Retailers

By Carol Worthington-levy

10 Great Offers … And 10 Not So Great Ones

A lot depends on what YOUR business is, but here are examples of offers that work. In fact, often these cost less than a discount, but the perceived value is higher. These offers will work even better if they have your company name and/or logo screened on in some way, with your URL.

• A “hot” inexpensive toy that your market covets.

• A gift card or credit for a national chain like Starbucks or an online store such  as Amazon.

• Something collectible or a set, so that if you continue promoting gifts in your offers, consumers will want the latest one to “complete their collection.”

• A handy tool for the garden or to keep in the car; make sure it’s good enough quality to be dependable.

• Something consumable, as long as it doesn’t spoil en route. For example, a box of candy for the customer who’s just ordered candy as holiday gifts for friends. It’s a way to treat the customer to a little bit of what they’re sending as a gift.

• Personalized goods, like yellow sticky notes with the customer’s name on them.

• Apparel, such as a “this offer only” T-shirt. The more original the design, and the more focused it is for your marketplace, the more likely it will work.

• A nice “extra” that creates comfort, such as a small microwaveable pillow for aches and pains.

• A small slide chart with easily accessible information, such as a food-and-wine matching chart, or a sliding health guide for supplements or exercise routines.

• Something consumers can use all the time, such as a nice looking corkscrew, a bottle opener, a computer cleaning kit, a twisty flashlight, a small cooler, or even a nice picture frame.

At the same time offers lure consumers into relationships with your business, they should make you look good, too. Consumers aren’t dumb; they know what they like, and they won’t be impressed if you make them an offer like the following:

• Something that used to be cool or hip, but now it’s not — at all!

• Old trade show toys like spongy balls or magnets that people see as junk even at the trade show.

• Big stuff. It costs you too much to send, and people don’t like getting something they must make room for — e.g., ugly logo blankets.

• A gift where the recipient must actually pay more to use it, such as a $5 gift credit for a site where you can’t buy anything for under $30.

• Something that you weren’t able to sell.

• A poorly made tool, such as Leatherman knockoffs that don’t work, flashlights that take 10 very expensive tiny batteries, knives that don’t hold an edge for more than one cut, a Zip drive that starts falling apart when you use it, and so on.

• A gift that will attract bad leads because of its high value. There are consumers who will go to a lot of trouble if the gift is too enticing, even if they have to sit through a salesman’s pitch.

• A two-year-old whitepaper that everyone’s already seen. And by the way, there has to be a more appealing phrase than whitepaper! “Groundbreaking report on,” “Incisive study about.” Well, you get the idea.

• A gift that may be dead or broken when the customer gets it. I’ve gotten dead plants and broken toys from companies who should know better.

• Any offer for which the customer needs to do math! If you must discount, give them some dollars off — $10 off a purchase of a specific item worth $80, $20 off of a purchase of $100 or more, among others. Low-level discounts like 5 percent to 10 percent off won’t impress most consumers. — Carol Worthington-Levy

Regardless of the channels in which you sell, testing is invaluable to your business. And offer testing, in particular, is misunderstood in both practice and power. Yet testing seems complicated and time consuming. Is it worth it? The answer: You can't afford NOT to test.

Each program you're running has many elements that could be doing their job well — or failing. The ONLY way you'll ever know what works best to help you win customers is to test as many of these elements as possible in a disciplined environment.

Offer Testing Increases Order Sizes, Speeds Up Purchase Cycles
An offer is something you dangle in front of prospects and customers to change their behavior. If you want your average order size to be higher, make them an offer that slightly raises the bar for how much they'd normally spend. Let's say your average first order is $55. If you're prospecting for new customers, develop an offer to get that first order $10 or $20 higher.

Your offer can — and should — speed up consumer response, too. A direct mail offer shouldn't give consumers more than 15 days to respond from the day the piece lands in their mailbox. Since it's a more immediate media, email offers should be five days or less. In fact, same-day promotions or limited-hour deals can also prove quite effective. If prospects have too much time to think about an offer, they'll put it aside and forget about it, even if they were motivated to act at the time they saw the promotion. Push consumers to act when an offer is top of mind.

What Makes a Great Offer?
So often I hear people say, "We don't have an offer because we don't want to discount." The irony of that statement: A discount is usually the last thing I'd suggest as a really great offer, although it still must be tested. The offers I've seen work best have been relevant, interesting or different "gifts," ranging from online-fulfilled gift cards for sister companies to signed, framed, limited edition photographs.

A winning offer has something that reminds people of your brand when they use the product or enjoy the offer. It also must have perceived value, but not so much that someone will order and then return the item just to get the offer. B-to-B marketers should have offers just as B-to-C marketers do, but their offers may be different in scope or purpose.

Offering a whitepaper is a common technique in B-to-B, but that's only effective if the whitepaper covers a current and truly intriguing topic. A whitepaper that just tells consumers about your company isn't a good offer. Sweepstakes and drawings can be effective for some efforts — e.g., getting people to sign up for email. But while sweepstakes typically win in the front end, they often lose in the back end. This isn't always the case, however. If your list is really exemplary, then all your leads may be strong despite the lure of the sweepstakes. This is why you test!

Another concern of B-to-B marketers is offering value. Often, companies won't let employees accept something more valuable than say $10. When New Pig developed offers that included kooky toys and T-shirts, they fit the bill for value — plus, they're collectible and fun. Even in B-to-B, human behavior plays a huge role. My company developed a pizza giveaway for Hewlett-Packard, generating high-quality relationships and sales. Pizza was universal and fun in appeal, and it generated attention because of how unusual an offer it was.

A Powerful Lever for Response
I've seen offers double and even quadruple response in A/B split tests. And I've seen other offers flatline. The bottom line is, if you believe that offers don't work for you, then you haven't tested enough. Measure test results carefully in both the front and back end. Tenacity is a key to successful testing.  Learn and grow with strong testing programs. You may become addicted to the excitement of more rewarding efforts and stronger sales!

Carol Worthington-Levy is partner, creative services at multichannel direct marketing firm LENSER (Carol.Worthington-Levy@LENSER.com).