Having an irresistible offer, is absolutely essential when growing your business. So what exactly is it?
It’s what your client, customer, patient or prospect gets when they respond to your sales or marketing tactic or strategy. It’s created to make it virtually impossible for your target market to resist. Hence, I call it the irresistible offer.
The offer is your attempt to get the prospect to stop in their tracks and take action NOW! Therefore, your offer is the inducement to get this response.
There are two primary types of offers; soft and hard offers. Let’s take a look at each.
Soft offers are so named because they don’t involve any personal communication with the company making the offer.
As a result, soft offers are the most painless, risk-free way for a prospect to respond. Because of this, and if created correctly, response tends to be high.
I prefer FREE soft offers.
Here is a list of some proven free soft offers:
- free special report
- free brochure
- free catalogue
- free newsletter
- free information pack/kit
- free gift certificate
- free coupon
- free video/video series
- Free Book
These types of soft offers are also known as ‘lead magnets’.
Hard offers, on the other hand, require a sale to occur or a personal interaction between the prospect and the seller, or between the prospect and the actual product or service. Here’s a list of proven hard offers:
- Free trial
- Free no-obligation appointment
- Free needs assessment audit
- Free explanatory meeting
- Free evaluation of your requirements
- Free initial planning session
- Free executive briefing
- Invitation to a free talk or seminar
- Free use of service
- Free consultation
- Free survey
- Free phone call
- Free analysis
- Free estimate
- Free problem evaluation
- Free demonstration
If customers make more than one purchase (buying print, accountancy services, legal services, or almost every other type of business) you may not need to make a profit on the first order.
That’s why you often see the following offers: 27-piece luggage sets for £29.95, 4 Books for £4.00, etc.
This type of offer was pioneered in the 1950s by a marketing genius called Maxwell Sackheim when he created the American Book Club. Many book clubs have copied this approach since, but you can apply it to your business, too.
In the next section there’s a more recent example…
Clearly, the book club (or music club, etc.) is losing money on the first sale, but the offer is so compelling that it forces many people to join. Here’s a similar offer from the Daily Telegraph (a UK daily broadsheet newspaper), which is equally impressive…
I want to highlight another big mistake businesses make: they base all their results on the first sale. Here’s what I mean.
Let’s say on the first sale a new customer pays you £1,000. Your gross margin after delivering the product or service is 50%, which means you make £500 per new customer.
However, it costs you £600 to generate this one customer (the cost of advertising), so you actually made a loss of £100. Based on these assumptions, you’d conclude that this approach was not profitable, and you may cease to use it.
That’s how 99% of business people evaluate their success – based on the first transaction or sale. Do you think the book clubs view their customers like this?
In most businesses the customer keeps coming back for more. And even if you sell a ‘one-off’ product or service, you can and should get referrals from the customers, and you MUST start looking to ‘partner’ with other non-competing but aligned businesses so you can offer their products or services (for a commission, of course!).
Working out lifetime customer value
Before looking at irresistible offers, you need to work out the lifetime customer value of your customers.
Let’s say one new customer generates £1,000 per year for five years, and that your gross margin is 50%. That means the average lifetime value over five years is £2,500. Note also that this figure doesn’t include referrals which you should also factor in.
Now let’s say you currently use Google AdWords as one of your lead- generation tactics to generate new customers, and you generate one customer from 100 clicks that cost £200.
This means your cost of acquisition using Google AdWords is £200. If you get two customers from the above scenario, the cost of acquisition would be £100, and so on.
This means you’re left with £2,300 (the gross profit minus your cost of acquisition). That’s pretty good.
Here’s how you can use this in your favour. Listen up, because this will have a huge impact on the business.
First, if you know that every £200 you spend to generate a new customer result in new profit of £2,300, you should do more of it – much more!
Second, in the example above you should test your AdWords campaign,
And finally, the key to success is that now you know how much a customer is worth, you can spend more to acquire them in the first place (an even more irresistible offer).
