Most offers are developed for demand or inquiry generation. This makes sense, as the primary role of marketing communications is to drive inquiries into the lead-qualification process. Therefore, it’s typical for everyone involved to try to come up with offers that will uncover indi- viduals who are at the beginning of the buying process. The false assump- tion is that anyone who responds to an inquiry generation offer is at this beginning stage. The fact is that approximately 10 percent or more of those responding are in more advanced stages of the buying process. It’s just that they happen to see the marketing communications and respond, since their interest is already high. This issue is dealt with in the next chapter.
Soft offers have two traits in common:
• Low risk. This means that if I respond, there is no commitment on my part to do anything more, such as attend a web seminar or hear from a salesperson.
• High perceived value. This value can be either personal or busi- ness. The value is in the “eyes of the beholder” and not yours. As an example, your new, very expensive brochure may have high value to you but probably not to the responder. The higher the perceived value to the responder, the greater the response.
One of the debates in the area of soft offers regards the inclusion of premiums. A premium in B2B is defined as something for personal use such as a calculator, book, or travel alarm clock. Just go to the many cat- alogs of sales promotion items and pick your premium from the hundreds available. If the response goal is high quantity, then premiums will cer- tainly work. We found that out in spades at IBM when one of the direct marketing campaigns offered three golf balls to a target audience of CAD/CAM manufacturing engineers. The response rate exceeded 8 per- cent, and the campaign manager was initially a hero. The response was so great that we had to order more golf balls to meet the demand. Of
course, everything started to fall apart when the inside sales group began to follow up and found out that what we had done was to identify a group of golf-playing manufacturing engineers who were not really interested in our hardware/software solution. So, in the end, there were very few leads from a campaign in which the fulfillment cost for the golf balls busted the budget. We should have sold the names to Golf Magazineto help pay for it!
Do you or do you not use premiums? Well, it all depends (as do most things in life). One guideline that may help is to ask yourself: Is the pre- mium somehow relevant to the unique selling proposition or benefits of the product or service? If so and you want higher quantity, then use a premium. I’m assuming that the value of the sale and customer is high enough to justify the higher cost of the inquiries and leads that will result.
A good example of a premium that can be highly relevant to the product and of high interest to engineers is slide charts. American Slide Chart of Wheaton, Illinois, can customize almost anything technical. Engineers truly enjoy this type of premium, and the best news is that they can’t bring themselves to throw it away—so it hangs around for years in their desks.
Slide charts also carry valuable information for the engineer, and their use will reinforce the product positioning.
By the way, for soft offers the word “free” still works wonders. You may think it is overused, but all direct marketers know that inserting
“free” will bump response rates—guaranteed. So even if the premium is without any cost, say “free slide chart” in bold type and you will always obtain a higher response rate.
A few years ago, we conducted a campaign for a software product called RapidWriter. The major benefit of this product was that it saved time for typists who had to enter the same words or phrases repeatedly—
for example, in medical transcription. We used hourglasses as the pre- mium in two ways. First, we bought really cheap hourglasses filled with sand that matched the color of the logo and included them in the out- bound direct mail piece to create a package that went “bump in the mail.”
Second, we offered a brass hourglass for response. Not only did the hour- glass fit the benefit of saving time, but we found that the promise of a brass hourglass pulled better than a cheap plastic one in the hand.
This finding underscores the second guideline that I recommend when you’re deciding about premiums—test. Tests can be constructed in mul- tiple ways:
• One premium against another
• A premium versus another type of inquiry-generation offer
• The premium in the outbound package versus offering it for response
The expense of the premium and fulfillment cost should be carefully factored into the campaign. Not only does it cost more to include a pre- mium, but the associated higher response rate and lower quality of the inquiries will result in a higher cost per inquiry and lead. If the sale is worth the investment, everybody is happy, but the payoff needs to be sold, as frequently management will question why we’re “sending out these books to unqualified inquiries”—or so the critics will crow. The best use of premiums is for inquiry-generation offers. I do not recommend that premiums be used for the next two levels of offers, as they lose their rel- evance to the buying process.
There are many other and most likely better inquiry-generation offers, and depending on your product or service, one or several of the follow- ing may strike just the right chord with your target audience:
• White papers written by a creditable third-party author
• Case histories
• Subscriptions to a newsletter or E-newsletter
• A sample of the product or service—in software this is the free CD
• Brochures and catalogues—make them sound valuable
• Something else “free” (still one of the most powerful words we can use)
• Opportunities to attend a “free” seminar or webinar
• Competitive comparisons or charts/graphs demonstrating benefits
The core question to ask when developing inquiry-generation offers is: what would most interest the target audience and cause someone to act now? Acting now is key to response, since if the direct mail package or E-mail message is not acted upon quickly, there is little chance that the recipient will return to the communication at a later date and respond.
That’s why all offers should have some form of accelerator. Simply, the offer should carry an expiration date. This is particularly important if you’re using a premium or something else that has to be kept in inventory.
Without an expiration date, the offer is open-ended and may have to be kept around for a longer period of time than desired.