Have you ever been browsing in a store and ended up buying something you didn’t plan to because it was such a great deal?
Welcome to the world of the “compelling offer” – a key ingredient for any successful online business, but one that many newbies ignore.
In this post I’m going to describe exactly what makes an offer compelling, and how you can develop offers that will fly off the (virtual) shelves.
So What Makes a Good Offer?
Before getting into the nuts and bolts and what makes up a compelling offer, let me define “offer” for you.
If you look around the Web you’ll find many definitions of the word “offer” as it relates to marketing, most of them along the lines of “what a company offers for sale to a customer”. But that misses the point.
When a customer gives you money, they’re actually buying a bundle of benefits.
Always think of an offer in terms of the bundle of benefits that it represents, not the tangible product itself.
Think about it for a minute: when you pay $200 for a pair of Nikes, you’re not paying for two sewed up pieces of leather and rubber, which is what the physical product is. You’re actually paying for the expected benefits of the sneakers – greater speed and agility when playing sports, higher status among your peers (because you’re wearing an expensive pair of shoes), and so on.
So a compelling offer – one that your niche audience will gladly pay for – is one that represents a bundle of valuable benefits in the mind of your audience.
How valuable does the bundle of benefits have to be? In the mind of your customer, the value of your offer/bundle of benefits must exceed what you are asking for in exchange.
This concept relates to exchange theory, a theory that was developed by Philip Kotler, one of the founding fathers of modern marketing. Here’s what exchange theory says:
In order for an exchange to take place, target markets must perceive benefits equal to or greater than perceived costs.
In other words, for you to pay $200 for a pair of Nikes, you have to perceive more than $200 worth of benefits from those shoes.
The same goes with $27 e-books, or $97 software, or any other product or service.
So how does this apply to you, and your online marketing business? Let’s get into it.
The Biggest Mistake That Marketers Make in Developing Their Offers
Have you heard the statistic that 95% of businesses fail in their first 5 years of existence?
There are a lot of factors that contribute to the failure of new businesses, but I believe the single biggest mistake that business owners make is “trusting their gut”.
Many businesses have been launched when someone gets an idea for a service or product – usually through their own experience – and convinces themselves that their idea is the best thing since the iPad. Then they support this belief through confirmation bias. In other words, they actively seek out evidence that supports their belief that their idea is a great one. And they ignore evidence that their idea might be full of holes.
What is the antidote to “trusting your gut”?
Doing niche research. It’s only through good research that you’ll be able to deeply understand the problems, challenges, needs, and desires of your target audience. (You’ve heard the saying that you need to “get inside the mind” of your customer, right?)
And by intimately understanding the problems of your niche audience, you’ll be able to develop offers that have benefits that your audience values highly.
Components of a Compelling Offer
So what are the components of a compelling offer?
Quite simply, they’re the benefits that your niche audience has been looking for, but hasn’t been able to find!
Okay, I can hear what you’re thinking: “There must be some things that all good offers have in common.” True enough. Here are three components identified by Mark Joyner in his book The Irresistible Offer:
- High return-on-investment. This relates to the “benefit must be higher than cost” principle I mentioned above. Bottom line: whatever product you’re promoting, you have to convince your prospect that the value they’ll get will far outweigh the money they’ll be paying.
- A touchstone. Joyner describes this as something that quickly conveys your offer and its benefits.
- Believability. We’ve all seen offers that seem too good to be true (here’s my favourite: the sales pages that say “Buy our traffic-getting software and cash will be flying into your pockets…overnight!!!”). Most of us have heard the saying, “If it’s sounds too good to be true, it probably is”. So, while you have to make your offer outstandingly valuable, the benefits or outcomes it promises have to be realistic.
So that’s my take on how to develop a compelling offer. What are your thoughts?