Know-How Exchange : E-Marketing

You have to test the offers!

Perveived value is truly important, but I think of it differently. When I market a seminar, I price test, e.g, $295, $395, $495. More often than not the higher price wins. That's my take on what vevolution was talking about. That's quite different from a free trial offer, which is often a winning practice.

Free is still a magic word, and your first offer is what we call a soft offer in the publishing world. This kind of offer will bring in a higher number of responses, but a lower net conversion. Lower does not mean failure.

The "hard" offer equivalent, your #2, will likely bring in fewer sign ups but a higher conversion rate.

There are more factors in the equation, but the best way to do this is to test the offers. Split the list, 1/2 gets the free offer, 1/2 gets the money back guarantee

Then, wait until the 3 month period is over, measure your conversions. The winning strategy will then be obvious.

Arther gave you the best advise, do A/B testing. It’s not that difficult to execute and the pay off can be substantial. For example, in many well published case studies the A version offer: “Buy One, Get One Free” produced significantly higher revenue than the like offer B version: “Get a 50% Discount”. A/B testing always produces a winner.

But here ‘s the key. Once you have a clear winner from the two initial approaches, you continue to do A/B test, always trying to bet your winner. You will have a constantly evolving, refining money machine.

Hope this helps,

Steve

Frankly if you can test out both hypothesis among your customers nothing like it- Offer Option 1 for a month & then switch to Option 2- Measure stickiness of customer post 3 months of either promo & you will know what works in your cust segment.
Shd that not be possible I wd say go for Option 2.
Hope this helps.

Studies have shown that people respond better to hard figures ($50 off) offers vs. percentages (30% off) or FREE offers (sounds to good to be true or maybe there are strings attached). With a FREE offer, you've already the lowered the value of your product/service in the mind of your prospect. I've worked in the online service industry and have found that FREE offers attract people who are specifically looking for FREE offers. These people won't be your best customers and will drive you crazy. My vote is for Offer #2. Sometimes FREE means that you can't sell your product so you have to give it away. Establish value and collect some money while doing it. Once you have established whom your best customers are you can then go back and offer them a free month of service or a free "whatever" might appeal to them. If they love your service and you provide them with a premium when they lease expect it, they will love you for the rest of your business life or at least until a bigger company comes in and buys you.

Thanks again for the time people put in to answer my inquiry.