The Offer Is King Ep 530

Abstract
Summary Notes

Abstract

In this marketing-focused discussion, the host emphasizes the power of an irresistible offer, using Domino's, Sony, and FedEx's successful strategies as examples. The host, alongside the affirming interjections of the second speaker, outlines the importance of believability, high ROI, and the strategic use of 'free' in offers. The host details seven methods to ethically leverage free offers to attract high volumes of leads and convert them into paying customers, stressing the significance of knowing your metrics and the long-term value of customers. These tactics are framed as essential for outperforming competitors and driving business growth through smart, compelling marketing.

Summary Notes

The Importance of a Strong Core Offer

  • A strong core offer is essential for business growth.
  • A compelling offer reduces the need for hard selling or exceptional marketing materials.
  • Businesses should be founded on an exceptional, irresistible offer.

"So if you have a good enough offer, you don't have to sell hard. You don't have to have amazing copy or amazing creative. You just get a lot of people to sign up for your thing."

This quote emphasizes that a powerful offer can significantly ease the selling process and attract customers without relying heavily on marketing tactics.

Examples of Successful Offers

  • Domino's pizza delivery guarantee: Delivered in 30 minutes or it's free.
  • Sony's music promotion: Ten CDs for a penny with a continuity program.
  • FedEx's delivery promise: Delivery by the next morning.

"Three of the greatest offers of all time were Domino's offer... Sony way back in the day... and that is FedEx."

This quote lists three historical examples of offers that were highly effective in attracting customers due to their compelling value propositions.

Components of a Great Offer

  • Believability: Offers must be credible to be effective.
  • High ROI: Offers should be perceived as valuable and easily communicated.
  • Business Model: The structure around the offer, particularly when using "free" as an incentive.

"Each offer has a component of believability... a high ROI offer... and so the third piece is kind of the business around it."

This quote breaks down the three essential components that make up a successful offer, highlighting the importance of customer perception and the underlying business strategy.

The Challenge of Believability in Offers

  • Offers that are too good to be true are often not believed by consumers.
  • Providing a reasonable explanation ("reason why") can enhance an offer's credibility.
  • Examples of believable reasons include inventory clearance due to impending expiration or overstock.

"That is a crazy offer, but it's so good that it's not believable. And literally no one responded to the ad."

The quote illustrates the failure of an unbelievable offer, no matter how good it seems, due to lack of consumer trust.

The Role of Value in Offers

  • Offers must be valuable to the customer to be effective.
  • The value proposition should be concise and clear.
  • An offer's success depends on the perceived value from the customer's perspective.

"You can give offers, but if people don't find it valuable, it's not going to matter."

This quote underscores the necessity of creating offers that resonate with what the customer deems valuable, reinforcing the idea that customer perception is key to an offer's success.

Utilizing 'Free' Ethically in Offers

  • The ethical use of "free" in offers can be a powerful tool to attract customers.
  • "Free" should be part of a strategic business model, not just a gimmick.
  • The discussion includes seven ways to use "free" ethically, though details are not provided in the transcript.

"And so what I want to walk you through is three really good offers, the three components of those offers, and then seven ways to ethically use free."

This quote indicates the upcoming discussion about ethical strategies for incorporating "free" into offers, suggesting that it is a nuanced tactic that requires careful consideration.

Free as a Marketing Tool

  • Using "free" in marketing can lead to high lead volume, low customer acquisition cost, and potential massive growth.
  • Offers structured around "free" can be compelling, leading to word-of-mouth spread.
  • "Free" offers need to be irresistible and easily understood to be effective.

"And so understanding how to use free as a marketer is probably, in my opinion, the single most valuable thing that you can learn how to do."

This quote emphasizes the importance of understanding how to effectively use free offers in marketing to attract customers and stimulate growth.

Free Bribe Offer

  • A free bribe offer involves giving something of high value for free upon the purchase of another product or service.
  • This type of offer leverages the attractiveness of "free" to incentivize a purchase.
  • It serves as a price anchor, setting the perceived value high while offering something else at a lower cost.
  • Example: Frank Kern offered all his courses for free with a subscription to his continuity program.

"So Frank Kern, way back in the day, did a, he had all of his courses that he'd ever made. So high value offer, probably like $12,000 in value. He said, I'll give you all of the courses that I've ever made absolutely free if you sign up for my $397 a month continuity, right."

This quote illustrates an example of a free bribe offer, where a high-value product is given for free with a subscription, enhancing the perceived value of the subscription.

Limited Free Offer

  • A limited free offer provides a taste of a service with the option to upgrade to a more comprehensive package.
  • It is commonly used in gyms, where a basic service is offered for free with the option to pay for enhanced features.
  • This strategy can lead to upselling a significant portion of customers to a paid offer.
  • Example: Offering a basic 28-day trial with an upsell to a more intensive program with additional benefits.

"And so then you upsell, right, as american as apple pie, a 28 day challenge or 28 day intensive or whatever you want to call it, accelerator, where they pay 199 or 299 or whatever for the enhanced version that has three workouts a week, or unlimited workouts and personalized nutrition and an accountability coach."

This quote details the limited free offer strategy, demonstrating how a basic free service can be used as a stepping stone to upsell customers to a premium paid service.

Free Trial Plus Penalty

  • A free trial plus penalty involves a conditional free offer that incurs a penalty if certain conditions are not met.
  • This model is a downsell strategy that can be used if a customer does not take the initial upsell offer.
  • It introduces a commitment device by requiring a credit card to ensure accountability.
  • Example: A gym membership where missing workouts results in a charge.

"So if someone doesn't take the AB close that I just mentioned, say awesome. If you're going to stay, then you have to put a card down because you want to be held accountable."

This quote explains the free trial plus penalty approach, where a customer is offered a free trial with the caveat that they must provide a credit card and adhere to certain conditions, thus creating a sense of accountability and a potential revenue stream.

Motivational Pricing Strategies

  • Pricing strategies can significantly impact customer motivation and retention.
  • Financial penalties for missed commitments encourage customers to engage with the product or service.
  • High conversion rates on the back end are likely when customers are more invested.

"charge you for the missed workouts. And you have to attend a feedback session and a transformation picture session and a nutrition session." "If, you know, show any of those, it's $50."

These quotes illustrate a strategy where customers are charged for missed commitments, such as workouts or sessions, which acts as a motivator for them to consume the service being offered.

"So the likely they convert on the back end is significantly higher."

This quote explains that when customers have a financial stake in the service, they are more likely to become regular, paying customers after the trial period.

Importance of Word of Mouth for Podcast Growth

  • The podcast relies on word of mouth for growth, eschewing traditional advertising methods.
  • The host encourages listeners to share the podcast in the same way they learned about it.
  • Sharing the podcast is a way to support the entrepreneurial community and generate good karma.

"The only way this grows is through word of mouth. And so I don't run ads. I don't do sponsorships. I don't sell anything."

This quote emphasizes the importance of organic growth through listener recommendations, as the podcast does not use ads or sponsorships for promotion.

"So if it was a review, if it was a post, if you do that, it would mean the world to."

This quote is a call to action for listeners to promote the podcast through reviews or posts, highlighting the value of their support.

Free with Deposit Offers

  • Offers that are "free with deposit" are contingent upon meeting certain goals or conditions.
  • Customers can get their deposit back or credit towards a service if they hit a goal.
  • These offers require clear stipulations and compliance with advertising regulations.

"The old six week challenge that we ran for a very long time, it was probably the most popular fitness offer in the last decade, was a free six week challenge."

This quote refers to a successful "free with deposit" promotional strategy used in the fitness industry, indicating its effectiveness and popularity.

"So it's free with a contingency. So it's like you put x dollars down. If you do X, Y and Z, you can either get it back or you can get it towards program whatever, right?"

This quote explains the mechanics of a "free with deposit" offer, where the customer's deposit is contingent on completing certain requirements.

Free Forever Model

  • The "free forever" model involves offering a service for free while monetizing through other channels.
  • This strategy requires a deep understanding of the business model and alternate revenue streams.
  • High-margin products can be used to subsidize the free service, leveraging customer appreciation for physical products.

"I will train you for free, for legitimate free. Like I will give you free training straight up. Your membership is free forever, right? As long as you just do the things that I tell you to do, which may include buying supplements from us."

This quote describes a business model where training is offered for free, but revenue is generated through the mandatory purchase of supplements, illustrating a "free forever" approach.

"But you're bolting on a different revenue stream. So that's where you can offer multiple services and monetize a different service than the one you're giving away for free."

This quote highlights the strategy of offering one service for free while monetizing another, allowing for a diversified revenue stream.

Free Giveaway Strategy

  • Free giveaways are a method to attract a large number of potential customers.
  • Even if only one person wins the giveaway, others can be offered the service at a discounted rate.
  • This strategy creates interest and can lead to increased sign-ups and sales.

"The 6th way is a free giveaway. This is a classic. You run a free giveaway, let's say meals for a month, right? I'll pay for all your food for a month. I'll pay for your whatever, right?"

This quote introduces the concept of a free giveaway as a promotional strategy to attract customers, using the example of providing meals for a month.

"And so you get. Tons of people are going to opt in for that. And you say like, well, we picked one person, but if you still want to do the program, it's this, and we'll give you a discount since you signed up"

This quote explains that while a free giveaway may have only one winner, it can lead to additional sales by offering participants a discount on the program they showed interest in.

High-Value Giveaways

  • High-value giveaways related to the core offer can generate cheap, qualified leads.
  • Example provided is a $25,000 transformation challenge with a $300 sign-up fee.
  • Giveaways must comply with regulations to avoid being considered gambling.

"A good friend of mine just started running a $25,000 transformation challenge, and he's getting people to buy without even doing phone calls straight on the page because it's a $25,000 challenge and it's like $300 to sign up online."

This quote illustrates the effectiveness of high-value giveaways in attracting customers and emphasizes the importance of the perceived value of the giveaway.

Free With Commitment Offers

  • Offers where the initial period is free with a commitment to a longer contract.
  • Marketing 'free' still requires compliance and clear contingencies.
  • This strategy typically results in higher average contract values due to the back-end perceived value.
  • It is crucial to sell the service continuously, not just the trial, to avoid chargebacks and cancellations.

"So that's where you say your first 28 days or your first month is free, as long as you commit to a nine month contract or you commit to a whatever."

This quote explains the strategy of offering something for free initially but with a commitment to a longer-term contract, which helps in converting leads into paying customers.

Continuous Selling

  • Continuously selling to customers is necessary even after they have signed up for a trial or a service.
  • It is important to ensure customers are aware they will be billed and agree to it to avoid chargebacks and cancellations.
  • Selling the trial is different from selling the continuity; the latter ensures long-term customer retention.

"Make sure they know they're going to get billed. And if it were me, I'd probably only bill the people that I knew had been sold and had kind of at least verbally agreed to it."

The quote emphasizes the importance of transparency and agreement in billing practices to maintain a good customer relationship and reduce financial disputes.

Monetizing Free Offers

  • Learning to monetize free offers is a crucial skill set for business success.
  • Competitors who can monetize effectively can acquire customers at a lower cost.
  • Knowing the conversion metrics, average ticket size, and customer lifetime value (LTV) is essential for effective marketing.

"Learning how to monetize free is one of the biggest tools in your skill set, in your toolbox."

This quote stresses the significance of mastering the monetization of free offers as a competitive advantage in business.

The Importance of a Clear Offer

  • The clarity of the offer is paramount; it should be explainable in one or two sentences.
  • A clear and concise offer can significantly increase revenue.

"If you get the offer right, someone should be able to explain to someone else in like one sentence or two sentences what it is that the offer is."

The quote highlights the necessity of having a clear and easily understandable offer, which is critical for successful marketing and sales.

Conclusion of the Podcast

  • The podcast ends with a closing statement from the co-host.

"Close our channel."

This quote signifies the end of the discussion and the podcast episode.

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