tanTALK - View Single Post

gripmarketing · 03-29-2005, 10:15 AM

No need to wonder!...just ask.

You’ve invested in equipment, a sign out front, lotions, employees, and build out. And you expect to get a Return on Investment (ROI). But you can’t stop there and just hang out your shingle. You must buy the market, too. And you expect to get a ROI on that purchase as well. Let's talk about offers that buy the market...

3 Tans for $25
3 Tans for $15
3 Tans for $9
3 Tans for $6
3 Tans for $3
3 Tans for $1

1 Free Tan
3 Free Tans
Free Tan Weekend
Free Tan Week
10 Days of Free Tanning
2 Weeks of Free Tanning
Free Tan Month

In the example offers above, you’ll notice that the first offer in each group won’t buy anywhere near as much of the market, nor nearly as fast as the offer below it.

It is also true that offers such as “Two Months of Free Tanning” or “30 Tans for $1” do sound irresistible but are also unbelievable. Consumers figure there must be a catch and response rates will suffer as a result. So, yes you can go too far.

It’s risky to test offers. But test you must to find that happy medium between going too far or not far enough. Far enough to garner good response rates, not far enough so that you make money.

Using the least risky and safest approaches, such as creating huge markdowns with more aggressive offers does boost response rates dramatically. An overnight sales increase will result.

To dramatically improve response, dramatically improve your offer.

Over time, though, companies continue to avoid risks and the risky testing of offers by using the safest approaches, the consumer becomes numbed by these big offers that she sees as having now become commonplace and mediocre and doesn't buy. So companies maintain or increase the markdowns and 'round it goes, as they sink into risk aversion addiction and continue with unprofitable sales. So avoiding risk with guaranteed sales can, quite simply, ruin your business.

As you read this, every company out there is trying to find a new way to "break through" with their advertising messages. They're increasing their budgets. Taking more risks. It's a nonstop whir of activity. At Grip we share your goal -- results: More traffic, more frequency, more sales, and more margins.

That’s why we recommend that you test, test, test.

But I think what you are asking, JCL is about that very small but highly-vocal group of anti-free offer salon owners (who will no doubt blast me and call me names here) who incorrectly assume that free offers 'devalue' the industry, or worse make it more difficult to earn a profit. This simply isn't true. I've examples too numerous to mention that refute such notions.

Why do they feel this way? Most likely, IMHO because they 'tried' free offers and failed with them. Therefore, in their minds, anyone else who succeeds with free offers is bad, a moron, devalues the industry, and any other name-calling device they can think of.

Obviously if they'd have succeeded with free offers, they'd feel differently.

What they should do instead is revisit the HOW, WHERE, and WHEN they failed. And then try again. Homer to Bart, "Well, son you failed. So never, never try again."

It's best to do a post mortem on the living. Since the word "free" is one of the 13 most powerful words in the English language (according to landmark Yale study years ago), every retailer everywhere in every industry must try to make use of it and learn how to make a profit from it. Some can, some can't. In the tanning industry, it's been proven overwhelmingly and conclusively that you can. When a retailer can't, they must go 'back to the drawing board' and try again.

Remember how bad free offers are ...While a similar very small group of anti-free offer people in the ISP industry were highly vocal against offering free internet service and were busy dissing AOL's free offer campaigns over a 10 yr period, meanwhile AOL with their "750 Free Hours" offer did so well against these foolish competitors who refused to copy the offer, it enabled AOL to buy Time Warner with it. Duh-oh!

As Dennis said here previously, The Trojans gave away a horse and got a city. Wise words.

03-29-2005, 10:15 AM	#5 (permalink)
gripmarketing Join Date: May 25 2002 Posts: 1,257 Rep Power: 7	No need to wonder!...just ask. You’ve invested in equipment, a sign out front, lotions, employees, and build out. And you expect to get a Return on Investment (ROI). But you can’t stop there and just hang out your shingle. You must buy the market, too. And you expect to get a ROI on that purchase as well. Let's talk about offers that buy the market... 3 Tans for $25 3 Tans for $15 3 Tans for $9 3 Tans for $6 3 Tans for $3 3 Tans for $1 1 Free Tan 3 Free Tans Free Tan Weekend Free Tan Week 10 Days of Free Tanning 2 Weeks of Free Tanning Free Tan Month In the example offers above, you’ll notice that the first offer in each group won’t buy anywhere near as much of the market, nor nearly as fast as the offer below it. It is also true that offers such as “Two Months of Free Tanning” or “30 Tans for $1” do sound irresistible but are also unbelievable. Consumers figure there must be a catch and response rates will suffer as a result. So, yes you can go too far. It’s risky to test offers. But test you must to find that happy medium between going too far or not far enough. Far enough to garner good response rates, not far enough so that you make money. Using the least risky and safest approaches, such as creating huge markdowns with more aggressive offers does boost response rates dramatically. An overnight sales increase will result. To dramatically improve response, dramatically improve your offer. Over time, though, companies continue to avoid risks and the risky testing of offers by using the safest approaches, the consumer becomes numbed by these big offers that she sees as having now become commonplace and mediocre and doesn't buy. So companies maintain or increase the markdowns and 'round it goes, as they sink into risk aversion addiction and continue with unprofitable sales. So avoiding risk with guaranteed sales can, quite simply, ruin your business. As you read this, every company out there is trying to find a new way to "break through" with their advertising messages. They're increasing their budgets. Taking more risks. It's a nonstop whir of activity. At Grip we share your goal -- results: More traffic, more frequency, more sales, and more margins. That’s why we recommend that you test, test, test. But I think what you are asking, JCL is about that very small but highly-vocal group of anti-free offer salon owners (who will no doubt blast me and call me names here) who incorrectly assume that free offers 'devalue' the industry, or worse make it more difficult to earn a profit. This simply isn't true. I've examples too numerous to mention that refute such notions. Why do they feel this way? Most likely, IMHO because they 'tried' free offers and failed with them. Therefore, in their minds, anyone else who succeeds with free offers is bad, a moron, devalues the industry, and any other name-calling device they can think of. Obviously if they'd have succeeded with free offers, they'd feel differently. What they should do instead is revisit the HOW, WHERE, and WHEN they failed. And then try again. Homer to Bart, "Well, son you failed. So never, never try again." It's best to do a post mortem on the living. Since the word "free" is one of the 13 most powerful words in the English language (according to landmark Yale study years ago), every retailer everywhere in every industry must try to make use of it and learn how to make a profit from it. Some can, some can't. In the tanning industry, it's been proven overwhelmingly and conclusively that you can. When a retailer can't, they must go 'back to the drawing board' and try again. Remember how bad free offers are ...While a similar very small group of anti-free offer people in the ISP industry were highly vocal against offering free internet service and were busy dissing AOL's free offer campaigns over a 10 yr period, meanwhile AOL with their "750 Free Hours" offer did so well against these foolish competitors who refused to copy the offer, it enabled AOL to buy Time Warner with it. Duh-oh! As Dennis said here previously, The Trojans gave away a horse and got a city. Wise words.