It’s All About the Offer: But Wait, There’s More
Offers that drive response to DRTV spots
The offer presentation in a direct response television (DRTV) spot is a careful orchestration: The marketer wants to build up perceived value for its product with value-added deals, while also convincing prospects that the price is nowhere near the actual value of what’s being offered.
In fact, says Ron Perlstein, CEO and executive producer of Infoworx, a full-service direct response television agency in Boca Raton, Fla., often you want the premiums to look more valuable than the core product.
Establishing a market price for each product and premium and then presenting your reduced deal is the basic way to generate excitement and drive response. But it’s not the only way. A variety of offer tactics are being employed successfully in DRTV spots at the moment. Can one or more of these ideas work for you?
Trial offers have become more popular in the past four years, notes Tim Hawthorne, chairman and executive creative director of Hawthorne Direct, a full-service direct response television advertising agency in Des Moines, Iowa.
An example of a trial offer is giving prospects the option to test a $300 exercise machine for 30 days for a trial fee of $9.95, explains Hawthorne. When the 30 days are up, the prospect returns the equipment, or is charged the full price.
This offer is proving to be a good way to overcome consumer reluctance to purchase large-ticket items, regardless of the moneyback guarantee.
2. Easy Payments
A natural extension of the basic offer presentation that attempts to minimize price is installment billing. Multi-pay offer structures allow you to present a workable price point, says Hawthorne.
A good way to leverage multi-pay offers to drive response, says Perlstein, is to reward prospects for calling within a certain timeframe by knocking off one of the installments.
Depending on your program goals, you might want to consider deferred billing. Perlstein points out that while you experience more returns with this type of offer, you also get to build a database of customers/inquirers for future contact.
3. Soft Sells
For products on the more expensive side or that have a complex value proposition, the soft-sell offer is becoming more prominent.
This approach delivers product detail but no price, says Hawthorne, to generate leads that skilled telesales representatives will attempt to close. The basic call to action asks prospects to call for more information.
Soft-sell offers get a lower conversion rate than other DRTV pitches—about 20 percent. Generally, you want to secure a 50-percent to 85-percent conversion rate on DRTV offers, says Hawthorne. But soft sells can be made to work when the price point is considerably higher than the average DRTV product that falls in the $19.95 to $39.95 range.
4. Free Shipping
Born largely out of the e-commerce arena, free shipping has become a hot button for consumers. This offer can be used successfully to drive fast response, says Perlstein. Since the viewer knows she can go online and find free shipping offers and still not pay sales tax, this approach helps put DRTV offers on a level playing field with promotions in other channels.
The most dramatic challenge facing the DRTV industry is the rocketing costs of media. Both Hawthorne and Perlstein point to media costs as the reason one-step offers have become nearly extinct in DRTV. When a consumer calls in to order a product from a DRTV spot, she is likely to be solicited to purchase a host of add-on products or upgrade to continuous service.
Hawthorne adds that the need for strong back-end sales puts pressure on marketers to develop DRTV spots that present good deals to allow room for upsells on the phone order.
The key to successful upsells is selecting the right products and offering them in the most effective order. You want to look for products related to the main item promoted in the spot. For example, if you’re selling an exercise videotape, you could offer other tapes in the series or exercise aids, such as balance balls.
The order of the upsells is important, too. The first upsell needs to have the closest tie-in to the main product and should be the most expensive of the upsell items, says Hawthorne. Your take rate should start high on the first item—about 20 percent—and then taper off to anywhere between 5 percent and 15 percent on the following upsells. He adds that the average number of upsell pitches made per customer is between three and four.
Presenting so many add-on offers increases the length of time customers are on the phone with sales reps, say Perlstein, so you want to be careful not to turn a positive response into a negative one with upsell after upsell. He finds that a maximum of three upsells can be pitched without aggravating callers.
But not all upsells have to be products, states Perlstein. Another form of an offer upgrade is to convert a customer from installment billing to a single payment.
And the big kahuna of upgrade offers is to persuade a single-order customer to sign up for a continuity that delivers automatic shipments.
Make your offer sweet enough up front, and the back-end results could produce a continually replenished honey pot.