gripmarketing

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 your shingle out. You must buy the market, too. And you’ll expect to get a ROI on that purchase as well.

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.

MATT A

Great post Gary.

COCONUT

yes ,very good Gary, thank you!

gripmarketing

You're welcome! Oh, gee guys, thanks, blush, blush :blush face

You've also got to take into account other variables for your offers:

Seasonality
no need to run 30 Tans for $20 in April, but could be viable in October

Irresistibility
This takes into account consumer expectation levels in your area - which can be different from one area to another. Remember that every offer isn't 100% exportable.

Competition
Also effects expectation levels and takes into account what you and your competitors have done in the past to raise awareness and expectation levels.

Match Your Pricing
You don't want to have a complete or wild disconnect between your offer and your in-store pricing.

Low Hurdle
Consider your salespersonnel's selling skills. Are they killer closers or order takers? Getting from 3 Tans for $10 to a $25 close is easy, getting from a FTWE to a $100 close is difficult. Consider the difficulty level and provide a stretch - a hurdle for the sales staff to jump. Otherwise, it's too easy.

Intrinsic Value
Not only do you have to offer extrinsic value (monetary value), but whenever possible try to offer intrinsic value (the 'I gotta have it' value) too. Not saying that you could...but if you could offer that everyone who buys during your sale event gets the chance to win a FREE Dinner with J-Lo, you'd have people who don't even want to tan buying from you just to get that chance.

Value Added
Whenever possible, use 30% more tans with purchase instead of 30% off pricing. 30% off pricing is 'cash out-of-pocket' whereas VA is free service that costs much less. Beware: we've found repeatedly that VA doesn't work in the Detroit market and a handful of others. Test.

Breakthrough Offers
You don't have to offer more, you just must make it SOUND like more to breakthrough the clutter and sound irresistible.[ This Message was edited by: gripmarketing on 2005-02-09 15:01 ]

gripmarketing

Coconut: your tagline sums it up! To which could be added: How does one know how far is too far without testing?

JeffinKC

I'm going to really buy the market this year. I'm not doing a FTD or FTWE or even a FTM. Thats right folks I'll be doing a FTS......thats Free Tan Spring. Everyone tans for free March, April, and May. I can't wait for all the $$$ to start rolling in.

Dennis

THERE IS NO DOLLARS IN KANSAS,ONLY DORTHY
DENNIS

DWhite6872

I think this has been debated to death. I am sure you are not having a free spring quarter. I understand you both have issues with one another but lets stick to the topic.

I tested an offer in October that bombed it was 30 tans for $30.00 we direct mailed it to our customer base and only received only 1 postcard back....so it was not an offer that worked for our market. We have tried a bunch of different specials and have had really good response but that on offer tanked. We did not give up and say "direct mail" dosen't work but knew it was the offer we had out in the market.

sparkie

Quote:offer in October that bombed it was 30 tans for $30.00

It wasn't the offer that bombed. Run that one in Feb and you'd get a completely different response.

You can't give it away to those that are not tanning in October. But this is a learning experience on time of year offers, also. Off-season advertising should be for co-op uses, Tans for Cans, Breast Cancer Research, etc...


Still won't drive tons into the salon, but name recognition and community good will go a long way as you get into season.






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[ This Message was edited by: sparkie on 2005-02-09 19:13 ]

tantootx

Excellent points, both of you.