Offer and Merchandise

Factors to consider when selecting merchandise and making direct & e-marketing offers

Offer Considerations

• Price: – Reasonable markup, competitive, test several • Shipping & Handling – General rule: do not exceed 10% of product cost – Free attracts attention, or even expected in some categories • Unit of Sale – Each Two for $ Set of X • Optional Features – Colors, odd sizes, personalization

Offer Considerations

• Future Obligation – Auto renewal, “Get 10 for $1 and buy 5 more at regular club prices over the next year”, Volume 1 free & others will be shipped each month • Credit Options – Usually increase average order size by

15%

or more (not really an OPTION anymore) • Incentives – Usually increases response, but may not get good

repeat

customers (unless you continue incentive)

Offer Considerations

• • Toll-Free Ordering (800) or (888) Numbers – Increases response by about 15%, customers expect this

easy to use

“shopping cart” for website • Time and Quantity Limits – Adds “urgency” if logical, but be sure to stick with it.

– The auction approach for the web (ebay) • Guarantee – ALWAYS offer a satisfaction guarantee and DO IT !! But, make sure you can live with it.

Checklist of Basic Offers

Free Info Discounts Time Limit Samples Till Forbid Get a Friend Free Trial Yes or No Contests

Checklist of Basic Offers

Lifetime or Charter Secret Gift Load-Ups Free Gift Add-Ons (call)

Good/Better/Best

Bounce Backs Upgrade Downloads Buy-Back

Short Term vs Long Term (

front-end vs back-end) • Emphasizing the “free” or incentive aspect of the offer will usually increase initial response rate ( front-end ) • Emphasizing the actual merchandise and/or the total price to be paid will reduce initial response, but usually results in much better conversion or purchase rates ( back-end ) • Test to see which is more profitable

Merchandise Selection Criteria

Need/Practical Originality Profit Margin Market Size Exciting Copy Shipping Safe/Legal Traits Supplier Exclusivity Traits Repeat Orders Price/Value Visual Appeal Personalize Packaging Too Many SKU

Web Suited Products

• Information • Not available in stores/unique (long-tail) • Story rich (see information above) • Updates and add-ons • Overcomes geographic limitations

Expanding an Existing Business

• Broaden your market definition – Ex: “executive planners” to “executive business gifts” • Ensure new products are consistent with customer’s image of your firm • Ensure new products fit the characteristics of your customer list – Pricing, past offer styles, lifestyles, recent purchases