What is a compelling offer?
An offer in the advertising world is to present to someone a perceived special that will encourage them to buy or use something you either have or provide. There are only between 1 to 5% of all people that are probably in the market for what you are offering. This is less for some industries, like insurance, retirement planning or investing. You must make your offer as low of risk to the prospect as possible and attract even those that are only mildly interested in finding out more about you and your offer.
A compelling offer is one that brings in between 2 to 10 times more prospects because of a GREAT offer. Let me explain:
I had a customer that needed to double his restaurant volume in 60 days. He said anything goes.
His current ad used 16 coupons (small ones at that) that discounted the most popular items on the menu. He averaged 100 coupons per month redeemed.
I took his ad and changed it to two coupons. I then asked him about his business. He had an average ticket per table of just under $26. His lunch crowd was about 15 tables with an average of 3 persons per table. His dinner crowd was about 50 tables per night with just under 4 persons per table.
30 days later: he had received over 300 coupons the first week. He had an average of 30 tables for lunch and 75 tables for dinner. His average ticket was $35 with both lunch and dinner at over 4 persons per table average.
Lets look at how we did in the first 30 days. Before, his average day was $1,690. After, his average day was now $3,675.
What makes one offer more compelling over another?
This is a great question. In the real life restaurant that I used above, I changed his regular offers to two great offers. His normal coupons were great for just getting the same crowd in (remember that these prices were from a few years ago): Tostadas 2 for $1.49, Chimichunga $4.95, Beef Taco Salad $4.99, Beef Tacos 3 for $1.49, Beef Enchilada Combo $4.95 and so on. One coupon was great for the person with a huge appetite – Grande Mexican Platter (two meals worth of food) as a Buy one at $15.95 get one free. He averaged over the last 3 years just 5 of these last coupons per month.
There were only two offers for the new ad. The coupons were huge compared to the ad that used to have 16 coupons. They were the same Grande Mexican Platter at $15.95 Buy one get one free. The other coupon was for a FREE Cheese Enchilada with beans and rice. Only one coupon per person, per visit could be used. No other purchase was necessary the first month.
The customer complained and I reminded him that he needed to double his business and anything goes. His objections to the more aggressive offers are obvious. He would go broke giving them away or so he believed. I told him the best thing he could do was get his servers to ask to bring chips, more great food and desserts were offered to everyone.
He told me that he only made a little bit on the big platter but why make the cheese enchilada plate Free? I said to get people in to try his great food. Besides a cheese enchilada isn’t going to fill up most people. He will make extra money on the drinks, chips, additional food and desserts he will now sell.
The compelling offer did the trick. 430 people enjoyed a free cheese enchilada plate and bought more chips, other items and desserts like never before. While his food costs went up by an average of $3.00 per ticket, his tickets went up by $9.00 per ticket with 62% increase in people coming in. By-the-way, he had 20 of the Grande Mexican Platters coupons used that month.
Who should use compelling offers and who should not?
Another good question. This is not something you should take lightly. I don’t recommend this to just everyone. Some companies don’t have the right product or service to do this. What, for example, would an insurance agent use for a compelling offer. A doctor shouldn’t offer a Free hip replacement with every heart bypass.
The key to this is to offer something that is too good to resist that ties into your business. I saw an ad for FREE Gasoline for your car (up to 20 gallons) when you stop by a certain gas station that was offering free tastes of a new product. The offer only lasted for an hour. I have no idea how much gas was given away but the company promoting the new product went from car to car giving free samples to everyone, especially those they knew wouldn’t get the free gas (because of the time constraints).
A compelling offer can really build your business. Two things I would say here: Make it a GREAT offer and make it something many people will want.
Next time I will discuss low risk offers. How they can get people who aren’t ready to buy, to pay attention to you now. Also watch in coming weeks for my list of six coupon offers and how they rate – what is best and what is worst to use.
Best Wishes,
Boyd Petersen