Strategy What You Need to Know About Promotional Offers
- Offers often are made without any testing. It's easy to set up an A/B or A/B/C split to test an offer, but most marketers simply don't do it. It feels like you're doing something positive by making the offer, so why test it? Still, test the offer that works against yet another offer to determine which one works best. And to validate results. Periodically retest what you think is a proven offer.
- Promos can negatively impact your next mailing. Some people order in advance of their normal buying cycle to take advantage of offers. When analyzing a promotion's results, look at the results of the mailing that follows, and then draw conclusions about the promo's effectiveness.
Let's focus on free-shipping offers. While some marketers say such offers have been overused, free shipping still ranks No. 1 in overall effectiveness. While I'm not building a case to use free shipping, I do want to question the use (or overuse) of this particular offer and set some recommended guidelines.
Who Qualifies for a Free-Shipping Offer?
The names you select to get the free-shipping offer should be in specific groups. For example, use the offer to reactivate 24-month-plus buyers, or to convert one-time buyers into multibuyers, or to convert catalog requestors. Don't, however, offer free shipping to your most recent buyers (unless you want to drive traffic to the Web). The chart "12-Month Free Shipping P&L" (below) illustrates the impact of free shipping on a zero-to-12-month housefile and the lift needed to fund the promotion.
12-Month Free Shipping P&L
Lost shipping revenue expressed as an adjustment to contribution