"The Four Components of Every Offer" (510 words)

Offers that require a promise to pay are called "hard" offers. "Soft" offers, on the other hand, don't require such a promise.

Because they reduce the commitment required from the customer, soft offers increase gross response by 50 percent to 200 percent. This results in higher gross sales, but also a higher cancelation rate. A combination of the two, however, often produces higher net sales after cancels, which makes the offer pay off for you, the marketer.

One example of soft payment terms is to allow customers free, no-risk trial offers of the product. You promise that they can begin to get trial shipments or services with no obligation to pay. If customers decide not to continue, they can write "cancel" on your bill or call and tell you not to charge their credit cards, and the customers will owe nothing further.

Tip: Emphasize the free trial/no risk terms of this offer in many prominent locations in your promotion. Also remind customers in several places that they can keep their first shipments (or benefit from your services during the trial period) even if they decide not to continue.

Payment Terms

You have a wide range of payment terms from which to choose. Following are some examples, starting with soft terms of commitment. Sample wordings for these offers are at the DM University Web site (see box at right):

• Bill me later/free trial.

• Bill me later (hard offer).

• Free trial converting to negative-option credit cards (see text below).

• Pay with check or credit card before shipment.

A negative-option offer is one in which you continue to ship and charge customers until they tell you to stop. ("You can call us any time to cancel, otherwise we'll continue to ship for your convenience and bill your credit card.")