Secondary Offer Increases Response Rate!

As someone who is responsible for creating the marketing campaigns that drive new prospect’s through the club’s doors, I am always looking for ways to increase the response rate from an advertisement. Let’s face it regardless of the medium (newspaper, direct mail, flyer, radio, television, door hanger, etc.) for every additional person an ad draws, the “lead-acquisition cost*” is driven down. Assuming the sales department does their job in selling the memberships to those prospects, this will ultimately mean a lower “customer acquisition cost,**” which refers to the amount it costs to acquire a new member. Obviously, every dollar saved in acquiring a new member adds to your bottom line. The key, therefore, is finding ways to improve the response rate of all your ads.

Newspaper Frustration!

One particular area of marketing frustration in recent years has been newspaper advertising. Specifically, the trend has seen the response rate from newspaper ads dwindling. Gone are the days where you placed one ad and received 100 phone calls. Certainly, the larger the ad the more responses one typically gets—and that rule applies today as it did a decade ago—but the reality of the situation is that most club operators can’t (nor did they ever) place full or half page ads on a regular basis. More likely than not, the average club operator finds themselves placing 1/8th and ¼ page ads.

Generally speaking, when creating smaller ads, two design pitfalls emerge. First, smaller ads can looked cramped as a result of trying to say too much in a small space and the text blends in with the rest of the newspaper. Second, if the ad uses eye-catching larger fonts and graphics, it usually means the primary focus is an offer to buy; therefore, readers often don’t get enough information to compel them to call. The result is that these smaller ads usually don’t have the same “wow-effect” of lager ads. Combine these things with the fact that fewer and fewer people receive the paper and those that do have less time to read the paper and it is understandable that response rates have suffered.

Regardless of the reasons “why” newspaper advertising has become less effective, reality is that newspaper is still one of the more affordable means of advertising—especially if you are a single club operator and/or live in a smaller town. Therefore, in this month’s marketing case study I embarked on a journey to improve the response rate of a newspaper ad.

The Case Study Ad

By the time I needed to begin working on the material for this article, no club operator had contacted me to take advantage of being one of the case studies in this series. (I still need two more volunteers for later in the year.) As a result, I assessed the recent newspaper advertisements we had run for our HEALTHY INSPIRATIONS Weight Loss & Lifestyle Centers. I found a 3 column by 5 inch ad that had run in February, which had gotten a much lower than normal response rate. As always, it had run in our local newspaper, which has a total circulation of about 8,000. Normally with an ad that size, we will get anywhere between 12 and 18 phone calls; 80% of callers will book and we enjoy a 63% closing ratio on first time visitors, not including be-backs.

The offer on this particular ad was for a free $99 Wellness Kit for the first 25 people who joined that month. In the kit was a variety of goodies for the new member, including an educational audio program on sticking with a new exercise program, a facial, aromatherapy treatment and a club T-shirt. The ad ran on the same day of the week that we usually pick, which is Monday because that is when the paper has a health section. We had ran an almost identical ad the year before with great response but this time the ad only generated 8 phone calls.

The Assessment

When assessing any marketing effort, the difficulty is in trying to ascertain what might have been the reason it didn’t work—especially in a case where it had enjoyed success in the past. Could it have been the sluggish economy? Perhaps. Could it be attributed to the anxiousness of a possible war? Maybe. Or might it have been because last year we were also running a radio campaign at the same time, hence greater top of mind awareness? That too could have contributed BUT none of those things overrides the fact that at any given moment in time in the U.S. 64.5% of Americans are overweight and spending billions of dollars on weight loss products! Bottom line is that I refuse to “buy into” an excuse about why something didn’t work. Instead, the key is finding a way to make it work.

Creating the New Ad

The key to truly “testing” any display ad is to make only one modification at a time and then measure the results and compare; test more than one variable at a time and you’ll never know what made the difference. The more influential variables to test are typically the headline, the offer or the call to action (the deadline or incentive). Since the headline we used, “Local Women Are Losing—You Can Too!” has been working for three years, I quickly discounted changing that. The offer for the $99 Wellness kit had also worked in the past so I wasn’t convinced that would be the best element to change. In the end I decided to change the call to action. Because I didn’t believe an expiration date difference would be compelling enough, I decided to add an incentive.

Adding A Secondary Offer As the Incentive

Remember that the original ad’s offer was for the $99 Wellness Kit, which in and of itself is an incentive—but it is strictly an incentive for those ready to buy. In an effort to boost the response rate the barrier to entry would have to be lowered somehow, but we didn’t want to lower the price or give away a more valuable gift so as to not de-value the brand. As a result, it was decided to add a secondary incentive offer that would be given away free to anyone who called. The goal was to get the phone to ring with individuals interested in losing weight. In order to get their free gift we would need their address, which would allow us to build a data base of people we could follow-up market to.

Much by chance, we had recently produced a booklet that was to be used as a lead-generator at wedding fairs, which are common in later winter and early spring. This small 60-page booklet entitled, “Ready, Get-Set, Go; Looking your best for special events,” was a comprehensive educational piece helping readers to understand the basics of nutrition, weight loss, exercise, lifestyle factors and aesthetic treatments. Because of its’ attractiveness, we were able to place a $9.95 value on the booklet. We added an inset into the old ad, picturing the booklet, and placed an “offer” box, which stated that the first 50 callers would receive the booklet for free, no purchase required.

The good news is that the response rate for calls was 28, almost four times greater than the first ad. Of those 28, 16 actually booked in for an appointment. Unfortunately, at the time this article went to press it is too early to report actual sales numbers. Even without proof of additional sales, the result was tremendously successful in terms of marketing. Not only did the new ad result in twice the number of appointments but also resulted in another 12 names and addresses of people who have an interest in weight loss. Adding them to an active mailing list and targeted direct mail campaign will likely produce more sales in the future.

Theory

Although someone might try and argue otherwise, since the only thing that changed with this ad was the secondary offer, it is probably fair to say that it was responsible for the increase in response. The bottom line is that people like free stuff. Therefore, placing the offer for a free booklet “lowers the barrier” to calling because such an action doesn’t require the person to buy. As a result, people who would not have otherwise responded actually called.

How to Create A Strong Secondary Offer

For many people reading this article, the next logical question becomes, “How does one put together a strong and effective secondary offer?” There are really just a few steps to follow.

Answer the question, “What is the customer we are trying to attract interested in?” For example, seniors are interested in finding ways to prevent falls.
Once identified determine what could be offered for free to entice these individuals to call. Following the earlier example of seniors, either locate through an organization or create some educational piece that can provide seniors with quality, meaningful information on simple exercises and daily tips to maintain strength and balance.
IMPORTANT: The more specific the offer as it relates to the market, the better the lead and vice-a-versa. For example, if you simply offer a T-shirt to anyone who calls, you will get less qualified leads.
Strategically place the secondary offer in your ad, ensuring that it grabs the reader’s attention AND has either a deadline or limited offer.
Accurately track the response rate from the new ad, ensuring that forms and policies are clearly understood by the entire staff.
Get the information out to callers immediately to establish credibility.
Follow up with additional, targeted direct mail pieces—both educationally and offer based—in an attempt to get these interested prospects into the club.

Follow Up is KEY!

Although steps 5 & 6 to creating a strong secondary offer seem short, their importance can’t be stressed enough. Remember the whole point about a secondary offer is to get people who wouldn’t have otherwise called you to call. These are people with interest in your product or services but, for some reason just aren’t ready to buy. By getting them on your mailing list you are given an incredible opportunity to educate them, gain their attention and trust and ultimately be in their “top of mind awareness” if and when they decide to join a club. If you simply send out the free materials and don’t follow up, you might as well not create the data base at all.

Wrap-UP

Certainly creating a secondary offer isn’t a new marketing technique. Businesses from education to pharmaceutical products to real estate to commodities all use “free” products or materials to establish a data base of qualified leads. To date, however, this strategy hasn’t been used often in the health and fitness industry. Perhaps now is the time to try something new?

The most compelling reason to give this strategy a try isn’t just the statistics provided in this article but rather the fact that a secondary offer can be added to ANY ad without increasing the cost of the advertising piece! Certainly there may be expenses in giving away the free materials or products but given that the average customer acquisition cost for U.S. clubs is $128, spending a dollar or two more to actually obtain the name and address of a qualified lead is nothing.

* “Lead acquisition cost” is calculated by taking the total marketing dollars spent on a specific promotion and dividing it by the total number of responses the club receives. This includes any calls or walk-ins.

** “Customer acquisition cost” is calculated by taking the total marketing dollars spent on a specific promotion and dividing that number by the number of new sales.