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 –EachTwo 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

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

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