Everybody talks about your “offer”, but what does it actually MEAN? In today’s episode, I explain the difference between a product or service and an offer, and the three potential components of an offer – deliverable, price, and timing.
What do you look at if your offer’s not converting? How do you increase perceived value when you’re offering intangibles? And what can you get for 20 bushels of grain and three goats? All this, and more, will be revealed. Give me less than 10 minutes, and I’ll explain… your offer.
Just click play, and I’ll meet you there.
Transcript & Shownotes
Welcome back to Naomi Explains Marketing, the show where I help coaches, consultants, experts, authors, and other associated nerds, geeks and misfits sell the contents of their brains for cash money. I am your host, Naomi, and today we’re talking about your offer.
Let’s do this.
You’ll remember that earlier in this series, I talked about a bunch of toothpaste in front of a customer, and I said that those little tubes were not simply products, but offers. I also promised to explain that to you later. Later is now, baby. I shall explain.
When we think about buying toothpaste – or pretty much anything else – it seems like a simple matter, or a one-part question. The question we think we’re being asked is… wait for it… “Do you want this toothpaste?” I know. Deep, right?
Now, the question can change somewhat based on circumstance.
It can be “Do you want this toothpaste or that toothpaste?” It can be, “Do you want this toothpaste, that toothpaste… or no toothpaste?” But regardless of the number of choices, we tend to think it’s a pretty simple question. Want, or don’t want? This one or that one?
That’s how we tend to think about it. But when it comes time to actually do it – when we’re in the proverbial toothpaste aisle – we quickly find out that we’re only considering half of the equation.
As a customer, when we go to buy anything, we’re never asking ourselves, “Do I want this thing?” Never, ever, ever, ever. Ever.
What we’re actually asking ourselves is, “Do I want this thing… for this price?”
And that’s where a product becomes an offer.
In all cases, where anything is for sale, ever, anywhere… if we buy a product or service, what we are actually doing is accepting an offer.
So what’s in an offer?
An offer contains at least two components, with an optional third.
The first component of an offer is what’s for sale, or the deliverable. In internet marketing, we refer to this as “what’s in the box”. The box, for most of us, is metaphorical.
The second component of an offer is the price.
The third, optional component is time.
Let’s do examples.
First, the deliverable. If we put this in question form, we might say, “Would you like a 90-minute Vedic astrology reading?” “Would you like four bedtime yoga videos?” “Would you like to marry my daughter?” That’s “what’s in the box”.
Next, we add cost, the price we will accept for what’s in the box. We expand the question, so it becomes, “Would you like a 90-minute Vedic astrology reading… for $225?” “Would you like four bedtime yoga videos… for 19 Euro?” “Would you like to marry my daughter… for 20 bushels of grain and three goats?”
Most offers, in most cases, stop there. They don’t need to add the third component. But frequently enough, we’ll add that third component during a timed promotion, more commonly known as a sale or a launch.
When we add a time component, we take the original offer and change the price, the deliverable, or both.
Then the offer becomes: “If you buy a 90-minute reading by Friday at midnight Pacific time, it will cost $225. After that, it will cost more.” In this case, we’re changing the price.
“If you buy four videos today for 19 Euro, I’ll throw in a bonus desk yoga video on the house.” In this case, we’re changing what’s in the box.
“If you marry my daughter before she gives birth, don’t worry about the grain. I’ll just take the goats.” In this case, again, we’re changing the price. Buy one, get one free isn’t really an appropriate choice here.
Sometimes, marketers will get really fancy and/or desperate, and change both. This is usually what you see on infomercials. “Normally, the videos are 49 Euro. But right now, they’re 19 Euro. And if you buy by the end of the day, you’ll get THESE BONUS VIDEOS for free!” This is very effective, and very difficult to pull off without looking like an infomercial, so you probably want to ignore it for now.
So. Offer. Two things, plus an optional third. Deliverable. Price. Maybe a deadline.
Let’s move on to a few more things and I’ll let you get back to being amazing.
First, seller bias. When our products or services are not selling as much as we’d like, we each tend to have a bias as to whether the problem is the deliverable or the price.
Pricing people want to tweak their price to death, and don’t even consider whether the thing in the box is compelling, or wantable. Deliverable people want to keep messing around with what’s in the box, and the price is a sacred cow, never to be discussed.
So if your offers aren’t converting (more on conversion in a future episode), your first step is to separate the components of that offer into deliverable AND price and look at them separately. That’s how you’ll get a balanced look at what might be tweakable.
Second, and this one is particularly true in service professions… if you’re in service or coaching or consulting or teaching or healing, and if you think you have a pricing problem, you probably have a deliverable problem. Not in all cases, but most.
Assuming your business is basically respectable, unless your pricing is outlandish for your market, it’s probably fine, or fine enough. But in these professions, the deliverable is often abstract and hard for the prospective client to conceptualize. $200 per session. $125 per hour. $1500 per month.
Price per invisible unit is difficult for our primate brains to ever truly grasp. Changing the price doesn’t change that fact, so we change our price and nothing gets better. Conversion stays the same.
X / hour or Y / session or Z / three months sometimes isn’t a compelling enough offer, regardless of the price, especially when you’re selling a nice-to-have as opposed to a necessity. But throw a few more of the right things in the box, and all of a sudden it IS a compelling offer. This is not because they’re getting more stuff, although that does help. It’s actually because it’s easier to understand.
So if you’re in service and you’re thinking about modifying your pricing, consider modifying your deliverable instead. Add an audit. An audit is a thing, not a concept. Add a reading. A reading is a thing, not a concept. Add monthly reports, or a workbook you’ll go through together, or hell, even just a book.
Even adding structure to the deliverable can be the difference between a sale and a pass. In month one, we’ll do X. In month two, we’ll do Y. Anything to make the abstract more concrete, and you’ll probably see an uptick in conversion.
So that’s your offer. Now, how do we get more people to buy your offers? Well, you’re going to need a marketing strategy, and that’s what we’re going to talk about in our next episode.
Until then, treat yourself well, and thanks for stopping by. See you soon.
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