5 Positioning Ideas When Leading With Price

What works best? Selling product benefits, then revealing the price? Or revealing the price, followed by selling benefits? There are rarely absolute answers, and statistically valid A/B testing in a direct marketing environment will give you the answer that works for your situation. Still, findings of a new study suggest five ways for direct marketers to reveal price

What works best? Selling product benefits, then revealing the price? Or revealing the price, followed by selling benefits? There are rarely absolute answers, and statistically valid A/B testing in a direct marketing environment will give you the answer that works for your situation. Still, findings of a new study suggest five ways for direct marketers to reveal price.

Neuroscientists and professors from Harvard Business School and Stanford University conducted a study to see if considering price first changed the way the brain coded the value of the product.

The focus on the research was on brain activity when the participant saw the price and product presented together. They were most interested in the area in the brain that deals with estimating decision value (the medial prefrontal cortex), and the area of the brain that’s been called the pleasure center and whose activity is correlated with whether a product is viscerally desirable. This pleasure center is called the nucleus accumbens.

Fundamentally, the research indicates there are differences in how a person codes information, based on whether the product has a greater emotional attachment, or whether the product was more practical.

They found that brain activity did vary in the sequence of product versus price first. A conclusion of the report is that when the product came first, the decision question seemed to be one of “Do I like it?” and when the price came first, the question seemed to be “Is it worth it?” Three other points made in the research suggest that showing price first can make a difference:

  • The order of price or product presentation doesn’t matter when the product is desirable and easily understood and consumed (e.g., movies, clothes, electronics), and fulfill an emotional need. If the product is affordable in this instance, then it’s an easy decision no matter how price was presented.
  • When a product is on sale or bargain-priced, showing price first can positively influence the sale.
  • When the product is practical or useful (more than emotional) showing price first prompted participants to be significantly more likely to purchase a product.

“The question isn’t whether the price makes a product seem better, it’s whether a product is worth its price.” said Uma R. Karmarkar, one of the research author. “Putting the price first just tightens the link between the benefit you get from the price and the benefit you get from the product itself.”

For direct marketing, copywriting formulas often dictate that the price comes toward the end of a sales message, after the product has been presented—particularly in letters and longer-form copy. This study suggests an A/B test of revealing price first is in order.

If you are going to test revealing price first, here are five positioning ideas:

  1. When a product is on sale, prominently show the price. Use dollars, not percentages. Percentages aren’t easily calculated in the mind (or worse, they are miscalculated in the mind and you risk losing a sale).
  2. Incrementally break down the price. Show it as the cost per day, cost per use, or some other practical way to reveal increments of the price.
  3. Compare the price to an everyday item. One of my most successful direct mail packages included a letter with a headline that said, “For about the cost of a cup of coffee a day, you can have …”
  4. Compare to your competition. If you have a price advantage, show it. If you don’t, then compare at a different level that includes longer product life, more convenience, or other benefits.
  5. Position the price presentation as a cost of not buying now. In other words, show how the price could increase in the future, or the loss that can happen by waiting. This positioning also creates urgency.

It’s important to acknowledge is that the research didn’t study emotion-based long-copy with storytelling and unique selling positioning of the product. Using emotion, story and a strong USP before revealing price in a direct marketing environment may be more effective to sell your product. Every situation is different. The only way to conclusively know if revealing price first will generate a higher response than presenting the sales message first is to A/B test.

3 Charges for Direct Marketing in 2015

The New Year represents a time to reflect on how to recharge direct marketing approaches and strategies. If 2014 results were disappointing, or worse, a decline from the previous year, here are three charges to examine and consider for 2015. But I should warn you: If you’re a long-time direct marketer like myself, accepting some of these charges might not come easily.

The New Year represents a time to reflect on how to recharge direct marketing approaches and strategies. If 2014 results were disappointing, or worse, a decline from the previous year, here are three charges to examine and consider for 2015. But I should warn you: If you’re a long-time direct marketer like myself, accepting some of these charges might not come easily.

  1. Cultivate Your Platform
    Long-term success is a result of creating a platform of raving fans, prospects and customers. Your platform is your revenue source. You must grow and cultivate it, whether you’re an established organization or a start-up. And you nurture your platform over time by positioning your organization as a trustworthy leader with authority in your market.

    If you haven’t already, reexamine your organization’s persona—how you’re perceived—in the market. You can build your organization’s persona in the marketplace with content marketing tools such as producing videos, writing blogs, and engaging both existing and prospective customers via social media. Even direct mail can include a content writing component with reports, research, and long-form, content-rich letters.

    As direct marketers, we’ve had it ingrained in us for generations that every marketing effort we use must deliver a measurable response. Cultivating and investing in the development of a platform of prospective customers, before making a sale, is counter to the culture of direct marketing. We expect every marketing effort to produce a measurable result.

    A challenge is accepting that content marketing, which normally doesn’t deliver a measurable sales response, does in fact contribute to long-term success. As prospects comb the Internet, you must meet them where they are—whether it’s at their mailbox, filtering through email, reading a magazine, watching TV, or online while checking social media, viewing video, or multi-tasking all of the above.

  2. How Do You Make Them Feel?
    After you meet your customers where they are physically, you must engage them emotionally using a methodical creative process that tracks what is happening in their mind.

    In the first step, you were charged with looking at your organization’s persona. Now, imagine the personas of your prospects and customers. The knowledge of who they are dictates how to stir emotions and calm the mind with your solution’s message. By establishing who you are with your position—your leadership and unique selling proposition—and using storytelling, you can embed new memory grooves. When the time is right, you interpret your offer for the metaphorical “left brain” part of the mind. The tipping point comes when you intensify the desired emotional “right brain” feeling so they give themselves permission to respond.

    As you consider how to create feeling in your selling message, heed this quote from Maya Angelou:

    “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

    Make your customers feel good and connect with them at a level they will always remember.

  3. Strategically Monetize
    With the charge to cultivate your platform and intensify the emotional feeling in your creative processes, never lose sight of the need to strategically monetize. Your efforts to create fans and followers must have an endgame plan that moves them to become paying customers.

    One challenge, for example, is measuring the value of content marketing in the total marketing mix of positioning leadership, establishing authority and building trust. It may mean that you have to look at the total effect of your numbers in a different way. Your budget may have to blend in the cost of marketing efforts you can’t track and average out a cost per order based on all activity. Perhaps you carve out a separate budget for content and other hard-to-track efforts. You might look at those costs as a branding expense or as part of overhead.

    Whatever makes sense in your organization, 2015 may be the time to view some types of marketing activities as contributing to your overall success without specific attribution to a sale. By my own admission, as a classically trained direct marketer this has been a tough concept for me to accept.

If 2014 was a banner year for you, stay the course, but remain vigilant for trends and tools that may prove valuable. But if response was lackluster or declining, consider that the days of profitably casting out a pitch to buy a product that’s unknown, without trust, credibility or authority, have passed for more and more organizations.

Your success includes the charge to build and cultivate a platform. The charge includes communicating a deeper, more cerebral approach that impacts memory and swells the emotional feelings inside your prospect’s and customer’s mind. And the charge for 2015 suggests that to calculate bottom-line profitability, you may have to rethink how you budget and monetize.

3 Ways to Waste Time on LinkedIn, but Feel Good About It

Ever feel like beating down all those bad tips for LinkedIn that we’ve all had enough of? You know, the tips and tricks that give us a week’s worth of satisfaction—followed by that sinking feeling. “Ugh… why did I invest any time in that?!” Well, today is your day to call out those time-wasters and discover what to do instead.

Ever feel like beating down all those bad tips for LinkedIn that we’ve had enough of? You know, the tips and tricks that give us a week’s worth of satisfaction—followed by that sinking feeling. “Ugh … why did I invest any time in that?!” Well, today is your day to call out those time-wasters and discover what to do instead.

No. 1: Share Quality Content Focused on Providing Value
“I have seen little (okay, I’m exaggerating) to no success using LinkedIn,” John Reeb of the Colorado Leadership Institute told me.

“I have tried to add value to anyone who reads what I post … so that they gain some kind of expertise or learning that helps them in their day-to-day work… yet I’ve receive virtually no feedback nor any sales from it,” Mr. Reeb told me in a candid LinkedIn exchange.

LinkedIn gurus claim being seen as an expert in your field is the killer strategy. But it’s not. It’s the reward for having an effective approach.

We’ve been told “share and they will come.” But merely sharing valuable content on LinkedIn won’t help you find clients. Instead, start bold, truthful discussions in LinkedIn Groups. Post updates on issues that competitors wouldn’t dare go near.

Give potential buyers a reason to listen to you, to care about your words-to pay attention to you. Tell the truths your competitors don’t want told. Tell the truths you’re a little scared to tell!

Ask yourself what shocking truth can you reveal that:

  • Gives insight on an idea customers never heard before.
  • Busts a myth your clients have been told is true—that isn’t!
  • Confirms their suspicion that some sellers are telling “white lies.”

Successful social selling often means helping prospects believe in a new, more useful point-of-view-in a way they can act on. That’s where your lead generation offer plugs in. In fact, what to post on LinkedIn updates isn’t nearly as important as how you post.

No. 2: Comment Frequently on Group Discussions and Prospects’ Updates
You can’t throw a cat without hitting an expert espousing this time-wasting tip. Let the truth finally be told. Participation on LinkedIn is the cost of entry. Learning how to apply social media copywriting is the force multiplier.

Success depends less on how frequently you update your profile status, how often you participate in Group discussions or what you say. You’ll get more responses (and leads) by investing time in structuring words to be provocative.

Instead of wasting time patting people on the back, disagree once in a while. Invent ways to make potential buyers curious about your ability to solve a problem, remedy a pain or fast-track a goal.

Don’t get caught up in the popular nonsense: show you’re human, give-give-give before you get and (my personal favorite) tell a good story. As with any relationship in life, having personality and being interesting is the entry fee. It’s essential. Makes sure you know how to write social media posts so they provoke a response.

The key to turning LinkedIn interactions into business leads is following a social media copywriting process.

At the highest level, this process involves:

  • Getting to the point immediately.
  • Having something honestly new (and useful) to say.
  • Not saying too much too fast. Being a little mysterious.

No. 3: Connect With Prospects
Perhaps the most dangerous tip is connecting with prospects you don’t know. Again, self-appointed gurus are the problem, not the good people (you) using LinkedIn.

Have you ever been banned by LinkedIn for requesting connections with prospects you don’t know? Know anyone who has?

Being temporarily banned by LinkedIn for this practice is very common. Yet we never read anything about it or hear anyone talking about this problem at conferences.

Fact: If your connection requests are not accepted often enough, LinkedIn will remove your ability to make requests.

LinkedIn prohibits contacting distant prospects. LinkedIn is not a good place to contact people whom you don’t have (at least) a second degree connection with, and whom you don’t have specific knowledge about.

If you have a new prospect—who you’ve never spoken to-it’s probably not a good idea to request a connection on LinkedIn (outside of an InMail message). That is, until you have better proximity to the prospect … better ability to approach once they know you or have a high probability of accepting the connection request.

From a practical view, here’s why: Because this is not what LinkedIn is intended for. It’s not what the founders built LinkedIn to do for sellers.

In fact, LinkedIn wasn’t originally built with “social selling” in mind. Just like Facebook wasn’t built for marketing.

That said, LinkedIn and social selling are evolving into a great match. In fact it’s the bedrock of their growth plan as a business. But be careful. Connecting with prospects is where a lot of sellers go wrong and pay the price!

Questions about any of my tips? Disagree with my perspective? Let me know. Good luck to you!

How to Create High Performing Sweepstakes for Lead-Gen Efforts

OK, I know what you’re thinking … viable leads typically don’t come from sweepstakes and contests. And when not done correctly, that’s exactly right. However, just as any online direct response tactic, this one is no different. Over the years, sweepstakes marketing has become refined through testing and targeting. And since the boom in social media, sweepstakes are more popular than ever. But before you embark on this tactic, there are a few core concepts to know—as well as best practices.

OK, I know what you’re thinking … viable leads typically don’t come from sweepstakes and contests.

And when not done correctly, that’s exactly right.

However, just as any online direct response tactic, this one is no different. Over the years, sweepstakes marketing has become refined through testing and targeting. And since the boom in social media, sweepstakes are more popular than ever.

But before you embark on this tactic, there are a few core concepts to know—as well as best practices.

The Precursors

It’s important to get to know your list to help determine its value and how much you are willing to give away for a lead, such as:

  • What is your average conversion time (how long does it take someone to move from a lead to a buyer—30, 60, 90-plus days?)
  • What is the lifetime value (LTV) per buyer?
  • What is your average revenue per name?
  • What is your average cost per lead (CPL)?

Conversion Time. Monitor a group of new names (perhaps by campaign) who come on your file and see at what point, at what percent and for what dollar amount your leads convert to buyers. This will help you know how much and how long it takes a lead to convert. Let’s say you have a pay-per-click campaign and, in the first 30 days, 20 percent of the leads convert and the average unit sale is $50. This shows you your time threshold for getting a sale. You’ll know when to anticipate revenues and can manage your budget accordingly.

LTV. You take the total your buyers purchased: Let’s say over five years, this group collectively spent $100,000, and divide that amount by number of buyers (let’s say its 500). Your LTV is $200. This will show you the potential long-term opportunity for a buyer’s worth, as well as the loss (if the customer leaves your list).

Rev Per Name. This is more for the current buyers on your file not long term, as with LTV. Take the total your buyers spend at 30, 60 and 90 days; and at each time point, divide that amount by the number of buyers. So let’s say at 30 days, your newest names bring in collectively $10,000 and there are 1,000 buyers. That is a $10/rev per name. This will show you current buyer worth and your threshold for acquisition costs.

Cost Per Lead. When you’re doing an acquisition effort, how much does it cost you per name? Take the cost of the media buy and divide by the number of leads that came in. This will tell you how much you typically spend to bring in a new name. Ideally, you want to keep you cost per lead much lower than your revenue per name and LTV. I like to hover between $5 and $25 CPL. CPLs will be different by channel. However, if you bring in a lead at $50 and you know, based on your list performance, that name will spend $75 in the first 6 months, you can afford to take an initial loss.

The Offer

What are you going to give away? The value of the giveaway should be something that won’t be viewed as too good to be true by users as well, as one you can earn back (based on the aforementioned list criteria and in a certain time period). So knowing your giveaway threshold is important.

In addition to being realistic and appealing, the offer should also be relevant and interesting to your target prospect.

I’ve seen random sweepstakes offers on the Web, as I’m sure you have. One in particular, a publishing company, featured an offer: “Win a free iPad.”

This makes zero sense to me in so many ways …

Unless this publishing company is uploading an app on the iPad with a free online subscription to one of their publications, I don’t see the relevance for the end-user. This publisher will likely wind up with thousands of leads, but they will be unqualified, irrelevant people looking for a free electronic device and not in the other information products they offer.

Plus there’s an out-of-pocket cost for the product and shipping of the product.

This, in my opinion, is typical of the “old” sweepstakes offers where little strategy and direct response knowledge seemed to go into planning the campaign.

However, one website I discovered in my research for this article seems to hit the nail on the head and offer something synergistic to their leads, as well as qualifies the lead for future potential sales via cross-sell and upsell efforts.

Take skin care company, Dermagist. Their sweepstakes offer is for lead generation, touts a “$200 shopping spree,” and is featured on their website and Facebook page. The tactics they are using can be applied to most any industry.

Leads have to “register” by liking Dermagist’s Facebook page, as well as post on Dermagists’ Facebook page why they love the product. Winners are chosen monthly and given a promo code worth $200 toward anything in their store. No purchase is necessary.

What I Like …

The offer is ongoing, so it’s a continuity of new leads (email addresses) coming in on a monthly basis to help build the list and offset any attrition.

The prize is realistic, targeted and qualifies the recipient based on relevant interest—it’s appealing to those interested in skincare products and is a great way to get repeat and referral sales.

Leads have to “register” by liking Dermagist Facebook page, as well as post on their Facebook wall why they love the product. This strategy helps with social media engagement (boosting page “likes,” visibility and credibility), as well as product awareness.

I also liked that on the website’s sweepstakes registration page, last month’s winner’s name was posted. This helps reinforce contest legitimacy.

Location, Location, Location

Where you promote your sweepstakes is equally important for targeting and relevance.

There’s the obvious, such as having a banner ad, header content or interstitial on the website’s home page mentioning the promotion.

You can also promote it on your business’ Facebook page organically (through fan page timeline and wall posts), through apps, as well as through targeted ads and boosted posts, selecting audiences in the Newsfeed that are like-minded with your target customer.

Tabsite has a variety of Facebook-friendly apps for contests and sweepstakes (photos, trivia and more).

A word of caution: If you are promoting a sweepstakes on Facebook, make sure to follow its guidelines or your campaign may run the risk of getting shut down.

Promoting it organically with search engine marketing is another tactic, such as with free online press releases.

And, of course, if your budget allows, you can promote your sweepstakes through targeted media buys (banner ads, email list rental) and pay-per-click. These costs should be factored into the overall campaign effort and cost per lead.

So when you start thinking about your acquisition efforts and how sweepstakes may be used, know that through the evolution of the consumer and Internet marketing in general, this is not your father’s sweepstakes anymore.

Being a creative and strategic marketer will help you take this strategy to a whole new, high-performing level.