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Offer Construction Project
MAGIC FORMULA: THE RIGHT AUDIENCE,
THE RIGHT PROMISE, THE RIGHT TIME =
OFFER YOU CAN’T REFUSE
BASICS
What are you selling? ______
How much does it cost? ______
Who will take immediate action on this offer? ______
BENEFITS
The primary benefit is ______
An important secondary benefit is ______
OBJECTIONS
What are the main objections to the offer?
1.
2.
3.
How will you counter these objections?
1.
2.
3.
TIMELINESS
Why should someone buy this now?
What can I add to make this offer even more compelling?
3. Provide a nudge.
The very best offers create a “You must have this right now!” feeling
among consumers, but many other offers can succeed by creating a less
immediate sense of urgency. Providing a gentle nudge to encourage
immediate action separates a decent offer from a high-performing one. Let’s
look at a few examples.
EXAMPLE 1: THE YOGA STUDIO
Jonathan Fields, a hedge fund lawyer turned fitness entrepreneur, owned a
Manhattan yoga studio that sought to be at the top of the market. A single
class cost $18, and membership cost $119 a month. Toward the end of
summer, the studio saw a significant drop-off in business, but when October
rolled around, people got back to their routine and started coming in more
often.
Jonathan wanted to find a way to inspire people to come back earlier than
expected and get as much commitment from them as possible. He had an
idea for an offer they couldn’t refuse: Starting September 1, first-time
members could get unlimited classes through the end of the year for $180.
This was essentially four months of yoga for the price of 45 days, or 62
percent off the normal price. Two additional factors were added to make it
even more interesting: First, the sooner a new member signed up, the more
classes he or she could attend, thus creating instant urgency. Second, the
offer could be withdrawn at any time; if someone came in on September 3
and wasn’t sure about committing to the rest of the year, the staff made sure
to let that person know that the offer might not be available later in the
week.
Thanks to New Year’s resolutions, most fitness centers take in the bulk of
their new members in January. Jonathan’s strategy helped his business gain
a big increase in September, traditionally a difficult month. Also, September
was close enough to January that by the time the new year rolled around,
many of the members were committed enough to transfer to a monthly plan
—at the regular price.
EXAMPLE 2: THE INEFFICIENT BUSINESS MODEL
(MARKET INEFFICIENCY = BUSINESS OPPORTUNITY)
Whenever something is more complicated than it should be or any time you
spot an inefficiency in the market, you can also find a good business idea.
Priceline.com
took advantage of hotel inefficiencies by creating a system
that allowed consumers to book rooms at name-brand hotels for much less
than the retail rates. Then other companies took advantage of Priceline’s
lack of transparency by creating a business model that allows travelers to
know which hotels Priceline works with. Each of these models includes a
compelling offer:
Priceline’s compelling offer: Save 40 percent or more on name-
brand hotels, guaranteed.
Third-party compelling offer: Learn exactly which hotel you’ll get
with Priceline … and save even more when you know exactly how
much to bid.
You can also derive a powerful business model from traditional systems
that lack transparency. If you want to make a traditional real estate agent
mad, ask the agent about Redfin, the Seattle-based service that splits
commissions with home buyers. I learned this lesson when one agent told
me that Redfin “should be illegal” and that I was doing a disservice to
hardworking people by endorsing it. Why are (some) agents so testy, and
why should it be illegal to save consumers money? Oh, because the money
is coming from the pockets of real estate agents, who are used to receiving
full, hefty commissions regardless of the amount of work they perform.
Redfin has succeeded by challenging gatekeepers and addressing a huge
inefficiency in the marketplace.
Speaking of home owners, the DirectBuy franchise was started in order
to offer “ordinary people” (i.e., non-contractors) access to retailer pricing
on appliances and home electronics. To get around the concerns of retailers
and manufacturers, DirectBuy structured its business model on charging a
flat fee for consumers to join. The compelling offer is: Invest in our
membership, and you’ll save thousands on home remodeling.
†
EXAMPLE 3: THE GRAPHIC FACILITATOR
I’ll invite you to meet Brandy Agerbeck in these pages, but you can “meet”
her first by examining the mindmap she made for us below.
‡
Brandy runs a business of one, with the philosophy “never have a boss,
never be a boss.” Creating graphical representations of ideas—usually those
expressed in meetings, retreats, or conferences—is Brandy’s full-time work.
Over the last fifteen years, she’s worked with hundreds of clients at all
kinds of events. It’s a beautiful business model from a talented artist, but it
also raises a question: How do you nudge or win over executives who don’t
get it at first?
From countless interactions about the valuable service she provides,
here’s what Brandy learned. She starts every initial conversation by saying,
“I have a fantastic, strange job.” This creates curiosity and also serves to
make the other person not feel bad if he or she is unfamiliar with the world
of graphic facilitation. Next, Brandy learned that her target market may be
the executives or meeting leaders she serves, but they aren’t necessarily the
ones who hire her. “I am most often hired by facilitators, acting as their
visual silent partners,” she says. “They can focus entirely on their client
knowing their process, and progress is documented.”
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