When is a FREE offer a BAD offer?

"When consumers suspect that an offer is TOO GOOD TO BE TRUE, they shy away.
Marketers should know the rules of making really good offers really believable. Here's
a perfect example of what NOT to do and how to make your offer convincing."

By Grant A. Johnson, Johnson Direct

This program's objective: generate consumer calls for its FREE Energy Efficient Services and Products that are designed to reduce energy bills, preserve resources and create a more secure future.

Making A Free Offer Irresistible
How Can "Free" Be A Bad Offer? That's what Ted Vallis, president, Energy Discoveries, wanted to know when his coupon mailing promotion and local newspaper advertising campaign weren't generating as many leads as he'd hoped.

"The ad plainly stated our free offer and the benefits of calling for our service, one of which was to save money," he explained.

To meet its aggressive contract goals with utilities such as Wisconsin Electric and Wisconsin Gas, Energy Discoveries was under pressure to bolster consumer responses.

Vallis turned to Johnson Direct with his "free offer" dilemma.

"I wasn't surprised to hear about the less-than-acceptable results from this type of advertising," said Grant A. Johnson, president, Johnson Direct. "Coupon promotions and newspaper ads can be effective for brand name discounts and nationally-recognized retail deals, but free offers often don't work."

What's Wrong With "Free?"
Johnson said it's hard for free offers to come off as credible. The average consumer reads the headline and immediately thinks, "This sounds too good to be true."

Bringing Credibility To The Table
Now that Vallis understood why his past program wasn't working, it was time for Johnson Direct to create a campaign that would work for Energy Discoveries.

The challenge: "TGTBT" syndrome ("Too Good To Be True").

The solution: using direct marketing techniques that instill confidence in the consumer.

"Our goal was to state clearly that Wisconsin's gas and electric utilities are paying Energy Discoveries to help conserve resources," explained Johnson.

A Convincing Package
Johnson Direct proposed a campaign that would target 20,000 energy consumers over a three month period. The campaign involved creative development and printing of a traditional direct mail package, list acquisition and mail fulfillment.

When the number 10 windowed envelope reached its destination, it contained:

• a personalized letter (utilizing accurate name and address information),
• and an easy-to-digest but attractive brochure.
  

The Letter
A direct mail package accompanied by a personalized letter will nearly always out-perform those without.

Personalization techniques involve using the recipient's name, discussing topics that are important to him/her and identifying specifics that are relevant to his/her situation.

The Energy Discoveries letter addresses the customer by name and states the offer up front. Immediately, the letter acknowledges that the offer is in cooperation with the local utility and lists the benefits of calling today.

The Brochure
The tri-fold brochure cover instantly addresses the credibility issue. "How do I know my FREE Energy Efficient Products aren't too good to be true?"

Inside the brochure are answers to consumers' seven most frequently asked questions. Each answer is designed to say to the reader, "Here's what's in it for you!" The brochure clearly states what action the consumer should take to benefit from the offer.

Response Results
Because Energy Discoveries didn't want to waste any time getting its message out, Johnson Direct scheduled the first 10,000 to mail first-class. Within five weeks Energy Discoveries generated more than a five percent response rate.

During the remaining six through ten weeks, the mailers were sent standard rate, allowing Energy Discoveries time to service the first round of calls.

To control Energy Discoveries' ability to respond to the calls for the free service and products, Johnson Direct rented a list by carrier route. The mailings were sequenced to ensure that certain geographical areas received the package at the same time, allowing service personnel to group home visits, making more visits and saving time.

Back to Marketing Know-how