Offers are all around us, you probably just don’t notice them.
It’s like when you go to buy a new car. You never noticed how many people drive a Mini Cooper until you’re thinking about getting one. Then you see them everywhere.
Unless you work in retail, you probably never noticed these offer strategies:
BOGO is probably the most common offer strategy. The idea is “buy one, get one free.” Variations are “buy one, get one 50% off” or “buy one, get $X off the second”.
BOGO is so part of common vernacular there is even a wiki page about it.
Another common offer strategy is price based offers commonly known as “save” offers.
Often times save offers are accompanied by a coupon or an online promo code. Customers are instructed to “use promo code SAVE50 at checkout.” A variation on a save offer is “switch and save” targeted at attracting new customers from the competition.
There are also seasonal offers.
Offers that are tied to the season of the year or holidays during the year. Fashion retailers like to use “new arrivals” offers tied to spring, summer, fall and winter clothing lines.
Next there are offers tied to loyalty programs, known as “earn and burn” offers. The offer strategy here is to provide the member with opportunities to earn miles/points and to redeem them for travel rewards or merchandise.
Members who don’t earn enough rewards are unlikely to stay active in the program. Members who don’t redeem enough points don’t reap the benefits of membership and those high points balances are a liability on the balance sheet. An “earn and burn” strategy is critical to attracting new members and making loyal customers out of them.
With the rapid growth of eCommerce, free shipping has become an increasingly popular offer strategy.
Now that we are familiar with the different types of offers, it’s time to look at how they are applied in an offer strategy.
Offers are all about getting customers to take a next action. BOGO makes you feel like you’re getting a good deal, free shipping might entice you enough to get you over the line on purchasing a big ticket item. Learn offers get you into the customer’s consideration set.
A beauty product’s offer strategy could be about about envisioning what you can do with their makeup products. Hence they use “inspiration and how to’s” to give you ideas about their products that you can then purchase – BOGO!
Car companies use a message test strategy to discover more about their cars. In the ads below, they vary the image of the car with the call to action to see which one converts better.
“Find yours” vs “Learn more.” “Find yours” vs “See offers.” Each message/image combination will have greater appeal to specific audiences to improve targeting and conversion.
A grocery chain’s offer strategy can be built around a buyer’s journey.
Messages like “Get inspired” (recipes) or “Learn more” get you started discovering new brands, products, and fresh produce you may not have tried before. “Get deals,” “Shop now,” View weekly ad,” and “View assortment” are progressing you shop. “Get coupons” and “Start ordering” are encouraging you to buy. “Learn more,” Sign up now,” and “Get details” calls to action are to get you into their loyalty program to incent repeat purchases.
Companies who think strategically about their offers plot them out on an offer matrix. They explicitly choose which audience sees which communication treatment, creative imagery, offer, promotion details, into which channel. They track these permutations against banner clicks and sales to determine which offers are best for which audience. Through testing, they optimize the effectiveness of each offer to drive sales.
This matrix looks at loyalty program offers.
Platinum tier members get luxury creatives reinforcing their status with an “earn” offer with 2X the points in a direct mail piece and an email. For Platinum the test is against different creatives, earn offer and 2X vs 3X points. Gold and silver get different permutations to test their effectiveness.
Here’s what the lack of an offer strategy looks like.
The only message is to shop spread across different creative imagery – a missed opportunity to test.
Some key considerations for your offer strategy:
- Think about the call to action – what is the next action you want the customer to take? For some products that are impulse buys it may be a simple BOGO. For big ticket items that typically require research and deliberation it may be to learn more about your product.
- Value exchange – what type of promotional offer can you make to encourage the next step? It might be a deep discount or a limited time offer or both.
- Tracking – how do you set up the offer tracking codes for testing? There are many ways to do this. Online promo codes like “SHOP10” have a meaning known only to the retailer, but is a tracking mechanism. Coupon codes are there for tracking a well. Lastly, tags for digital media have placement slots for variable codes to track audiences, media outlets, and campaign and offer codes.
So now that you know more about offers and offers strategies, you will see them everywhere. When you do, see if you can figure out the intent of the offer strategy…
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