Special Offers and Slippage

From time to time, you may offer your Customers some kind of discount or other special offer by means of some type of coupon, etc. Here are a couple of rules regarding offers of this type that no one seems to follow, and which end up costing you more than the coupon is worth:
The whole point of this type of offer is to make sure that as many Customers as possible know about it. Make certain that you send it out on a day that it will be seen (if via email, Tuesday or Thursday are best; if via social media, try Wednesday just before lunch in your target markets; snail mail, use an unusual envelope or arresting graphic on postcards).

Especially today, when Customers are barraged by marketing messages in literally hundreds of mediums, the best way to keep your message from getting lost in the howl is to send it to your Customers more than once, and in a variety of mediums. Post it ahead of time on your company's website, send snail mail the week before, do an email or newsletter blast the day of, have your reps call key Customers the next day to make sure they got the flyer/email/etc... The squeaky wheel really does get the best results and, if you do it in several mediums instead of hitting Customers multiple times using just one, your opt out rate is far less likely to spike.
Make sure that your employees - especially support and sales - know about the offer before it goes out. Nothing is more unprofessional than a Customer who knows more about your marketing efforts than your employees.

You have enough competition, right? So make certain that other departments don't have competing offers going out at the same time. (How dumb is it to compete against yourself? Yet I can't count the number of times that I've seen this happen, simply due to a lack of communication between departments and/or managers.)

Now let's talk about a key component of any special offer: slippage.

Let's say that you send your special offer out to 1,000 Customers. The offer should require that Customers validate the offer in some way - bringing in a coupon, entering a code into a web form, etc. This serves two purposes:
  • It allows you to count the number of conversions so that you know the response rate. Without this, you have no idea whether or not the offer was successful. Remember: This is a business, not a club; guesstimating is for hobbyists. 
  • It allows us to exclude Customers who did not actually respond to the offer - a practice known as 'slippage'. The worst thing that you can do is allow employees to push your offer to Customers who have never heard of it (and they will, believe me, unless you order them not to). 
There are two reasons for this:
  • Your metrics regarding the actual response rate go out the window. 
  • Your employee is offering a discount to a Customer that was willing to pay full price! Don't get me wrong - you want as many Customers to respond to your offer as possible. But you don't want to offer a discount to a Customer that was willing to pay full price, or you'll go broke, because it becomes habit and then 'the way we do things' overnight.

I can already hear you: "But Dave, if our Customers find out afterward that we had a discount and they didn't get it, they'll be mad at us!"

Bullshit. They may take it out on you, but they'll actually be mad at themselves for missing your offer. And we even have a way around that: Have a second offer available for exactly these Customers, not quite as good as the first offer, and let them know that you are doing this one time only and only because they are such a good Customer. (This will only work if everyone in your chain of command holds the line.)

You want everyone to hear about your offer, but you only want a certain number of people to cash in. That's how offers work: They drive additional business your way without you having to give up revenue. Of course, you honor the offer for everyone who complies with your terms, but for no one else. And from then on, your Customers will watch for your offers, and make sure they save them.

Out of the 1,000 Customers that you sent your offer to, you'll likely get 20 to 30 who convert and comply - 2% to 3%. But your traffic should bump at least 10%. That's a 7% to 8% uptick in business without any discount beyond what you would normally give a Customer without a special offer.

Ain't slippage grand?


No comments:

Post a Comment