The Creative Process

COMPLEXITY KILLED THE JC PENNY $10 OFFER

September's issue was about the perils of disclosure copy…especially lengthy disclosure copy.

But it was also about the importance of your offer.

When it comes to your offer...simplicity is mandatory.

While the JC Penney/MasterCard® co-branded offer featured in September appeared to be a model of simplicity – bring in the coupon for $10 off – it was ANYTHING BUT simple. The 199 words of disclosure copy turned a simple offer into a very ugly, complex offer.

A simple offer would have been: "$10 off any one item in the store…no exceptions." And little or no disclosure copy.

But the actual offer was: "Use your MasterCard® card & receive $10 off a single in-store purchase of $10 or more."

The first hint of complexity can be found in the wording – "receive $10 off a single in-store purchase" versus "any one item." Exactly what do they mean by "a single in-store purchase"?

Like a flag in a hurricane, the big red complexity warning flag waved furiously in the smaller type immediately following the offer. It read: "See details on Savings Certificate."

Aha! The devil's in the details…all 199 words.

And the details appeared in very small type on the back of the $10 Savings Certificate.

"Simplicity is the ultimate sophistication"
— Leonardo da Vinci

To maximize response, keep your offers simple!

YOUR OFFER – THE SIMPLER THE BETTER!

First, you need an offer.

Second, you need a good offer.

Third, your good offer must be a simple offer to be effective.

Here's what two direct response experts have to say about the importance of your offer.

In his out-of-print book, The Complete Idiot's Guide to Direct Marketing, on page 32 veteran copywriter, prolific author, and direct marketing expert Robert W. Bly defines the offer as: "What your prospects get when they respond to your ad or mailing, combined with what they have to do to get it.

"Note that the offer has two components:

"1. What the prospect gets.

"2. What the prospect has to do to get it.

"There is one simple reason why offers are so important: They can have an enormous effect on the responses your marketing campaign generates.

"The presentation of the offer – the copy used to describe it, the graphics, the emphasis it receives – is also of critical importance. The more you emphasize and stress the offer in copy and graphics, the higher your response rate. The clearer and more understandable your offer, the better your response. The lack of a clear, distinct offer can significantly depress response." [Emphasis added]

Bly is talking about simplicity in the last two sentences.

Why should we listen to Robert Bly? Because he's written marketing copy for over 100 clients and is the author of over 70 books on marketing and copywriting.

Direct response expert and agency president Lois Boyle covered the offer in the very first question of her twenty question article, “Perfect the Postcard,” which appeared in the September 2005 issue of Target Marketing magazine.

While Boyle addresses the postcard, her advice is just as appropriate for self-mailers and newspaper ads...as both are abbreviated marketing formats when compared to traditional envelope packages, magalogs, and catalogs.

Boyle writes, “As consumers, many of us appreciate the efficiency and ‘quick read’ that a postcard provides.

“As marketers, we appreciate the cost-effectiveness of a postcard, especially when it works! The postcard format, unfortunately, must work especially hard to compete with its sister formats, the more elaborate solo mailings and catalogs.

“You literally have seconds to grab a recipient’s attention and explain your offer – and that’s no easy task with the limited space a postcard provides. So, how can you create a postcard that will stand out in the mail and motivate customers to respond?

“To answer this question, ask yourself the following questions:

“Offer – The Most Important Component

1. “Is your offer simply stated and easy to understand? Complex and multiple offers can dramatically depress response."

After covering an additional 19 questions, Boyle wrote, “When developing your next postcard effort, remember that ultimately there are three goals you must achieve with your design: grab attention, quickly explain an offer, and get a response.”

Actually, Boyle's comments about offer simplicity apply to any marketing piece.

To repeat:

First, you need an offer.

Second, you need a good offer.

Third, your good offer must be a simple offer to be effective.

OFFERS – SIMPLE GOOD…COMPLEX BAD

We've all heard the old expression: "There's a lot to be said for simplicity."

And nothing could be truer when it comes to determining your offer for any marketing campaign.

As you'll discover in the examples below, a simple offer is not only easy to communicate, it is crystal-clear to your customers and prospects. And if your offer includes a premium, free gift, or other incentive, it, too, must be easily understood and easy to get.

And, most importantly, your simple offer should be free of lengthy disclosure copy...and ideally, void of any disclosure copy.

Okay you're probably thinking, what are some examples of good and bad offers?

OFFERS – THE GOOD, THE BAD AND THE UGLY

From our perspective, offers fall into one of three, basic categories. An offer is either good, bad, or worst case – ugly. At this point we want to thank Sergio Leone and Clint Eastwood for implanting these categories into our young minds years ago.

Based on our experience, the majority of offers we come across on a daily basis fit into the bad category.

The examples presented below should provide a clearer picture of what qualifies as a good, a bad, and an ugly offer.

THE UGLY OFFER

The JC Penney/MasterCard $10 Savings Certificate offer is an excellent example of an ugly offer. Not only is it complex, it actually is misleading in that too many store items are excluded from the offer.

Unfortunately, for most consumers receiving this offer, they do not learn of all the exclusions until they are at the checkout counter.

Why?

Because the long list of excluded items – twenty one item categories to be exact – appears only in the very small, 199 words of disclosure copy placed at the bottom on the back side of the $10 Savings Certificate shown in the sidebar. A complete list of the excluded merchandise is available in the September issue of the newsletter here.

Sure, the copywriter on this project followed some legal or compliance advice to add the disclaimer "See details on Savings Certificate" immediately after the offer which read: "Use your MasterCard® card & receive $10 off a single in-store purchase of $10 or more." BUT WE ALL KNOW THAT VERY FEW CONSUMERS ACTUALLY READ DISCLOSURE COPY.

Hiding the many exclusions in the lengthy disclosure which appeared in small type in the least conspicuous place on the self-mailer turned what could have been a very simple offer into a misleading, complex offer…an offer that could be viewed by some consumers as a "bait and switch" offer.

The "bait" was the possibility of getting $10 off almost any item in the store. The "switch" occurred in the store when many of the coupon shoppers discovered that their $10 coupon was good only on a limited amount of merchandise they didn't want or need.

In our opinion, this offer qualifies as an ugly offer.

Be very careful when making what appears to be a straightforward, simple offer and then seriously diluting it in a lengthy morass of disclosure copy.

Remember…

“The large print giveth and the small print taketh away.”
— Tom Waits, singer-songwriter from his 1976 album Small Change

THE BAD OFFER

"Get up to $100* when you open a free checking account" read the subhead on a recent Bank of the West newspaper ad.

Sounds like a great offer.

It seems like a simple offer.

But wait…there's that dreaded asterisk next to the $100*.

Unfortunately, the asterisk directs you to the 283-word disclosure copy at the bottom of the ad. Carefully reading the 283 words of mice type you quickly discover there are a number of things required in order to receive the entire $100.

Here's what you must do in order to receive your $100 when you open a Bank of the West free checking account:

1. Open a new personal free checking account with a debit card and receive a $25 bonus.

2. Use your new debit card for 10 point of sale transactions and receive a $25 bonus. But wait, there's a catch…eligible debit card transactions must be signed for and posted to your account within 45 days of account opening.

3. Establish a monthly direct deposit of at least $100 to your new account and receive a $25 bonus.

4. Use eTimeBanker® to pay a minimum of 3 bills each month for 3 consecutive months with the first 3 paid within the first 60 days of account opening and receive a $25 bonus.

For the $100 offer to be simple, instant gratification would require the bank to give you the entire $100 at the time of account opening. Not deposit it into your new checking account, but hand you a crisp, new $100 bill.

Instead, someone at the bank made the decision to dangle the $100 offer as a carrot to persuade you to help the bank improve its fee income, cross-sell ratio, and share of wallet. By doing so, they turned what could have been a simple offer into a complex offer.

In our opinion, this qualifies as a bad offer.

First, it requires 283 words of fine-print disclosure copy to clarify the offer.

Second, we know from experience that very few people read the tiny disclosure copy at the bottom of ads and direct mail pieces. This often leads to disappointment – and possible confrontation – at the point of sale when the new account is being opened and the "strings attached" are discovered.

Third, it ignores the value of instant gratification – allowing the new customer to walk out of the bank with the free gift or premium in hand. In this case, the money is paid as a bonus deposit to the account and takes several months before the entire amount is received…assuming the customer meets all the requirements listed above.

Fourth, it eliminates some unknown number of prospective new customers who would love to open a free checking account at the bank but do not like using a debit card, may not qualify for direct deposit, and have no interest in online bill paying.   

What prevents this from being an ugly offer is that any prospective customer who qualifies for a new checking account has the ability to actually get the entire $100 by simply meeting all four requirements.

Again, be very careful when making what appears to be a straightforward, simple offer and then seriously diluting it in a lengthy morass of disclosure copy.

THE GOOD OFFER

Or, in this case, excellent offers!

The best offers are those that make a big promise while remaining extremely simple and delivering instant gratification.

Some of the best examples were discovered in checking account self-mailers from First Federal Savings Bank and First Place Bank.

Their simple offers:

Open a new Simply Free Checking account and get a free $50 FiveStar Gas Card!

Open a new Free Business Checking account and walk out with $50 free cash!

And let's not forget the thousands of banks who delight new customers daily by allowing them to walk out of the branch with their free gift for opening a new FREE Checking account.

Another example of a simple offer is where some banks offer customers a free Home Depot Gift Card when they are approved for and open a home equity line of credit. We've seen these gift cards in the $50 to $200 range. Keeping the offer simple, there are no strings attached to the use of these gift cards.

Among the traits all simple offers have in common is the lack of lengthy disclosure copy. In fact, many of the simple offers require NO DISCLOSURE COPY to explain how they work.

Why are simple offers so critical to the success of your marketing campaign?

Perhaps this sobering statistic tells the story:

"The average American sees three thousand ads a day."
— Professor Barry Schwartz,
The Paradox of Choice: Why More is Less

Bottom line…today's busy consumers have only a few seconds to glance at billboards, newspaper and magazine ads, watch TV spots, listen to radio commercials, and scan your direct mail packages. YOUR OFFER HAD BETTER BE UP-FRONT AND SIMPLE OR THEY'LL SIMPLY MOVE ON!

What they WON'T do is take precious time to read your lengthy, mice-type disclosure copy.

SPEND MORE TIME ON YOUR OFFER

If you want to open more new accounts and have more satisfied customers…make them a simple, easy-to-understand offer.

An offer free of complexity, free of disclosure copy, and free of exclusions, onerous requirements, and hidden fees.

"Don't complicate the terms of your offer. The simpler the commitment, the higher the response."

This sage advice comes from veteran copywriter and author Michael Masterson. Masterson is the author of the 457-page copywriting text, Michael Masterson’s Accelerated Program For Six-Figure Copywriting, available from the American Writers & Artists Institute.

Paradoxically, it generally takes much more of your time to create a simple offer than to create a complex offer.

Why?

All offers must be approved by your chief financial officer, your compliance person, and your legal people.

CFOs love complex offers that minimize financial risk to the bank (e.g., the offers from JC Penney and Bank of the West).

An offer with strings attached can be quickly approved simply by creating a bevy of words that become your disclosure copy. Slap this disclosure on every marketing piece and you're done. Who cares if the type is so small most people won't read it.

On the other hand, a very simple offer, free of all sorts of exclusions and requirements – and the resulting disclosure copy – takes time not only to create but to be approved by your CFO and your legal and compliance folks.

Have you ever been in a marketing planning meeting when someone suggests offering a $50 cash gift on the spot to every prospect opening a new free checking account? Almost immediately someone jumps up and reminds the group of the cost of this free gift. He or she will voice concern: "What if we get 5,000 new checking customers? It will cost us $250,000 for the free gift alone."

As the meeting progresses, the majority of the time is spent trying to figure out how to add complexity to the offer so that either fewer prospects will qualify for the $50 or that the prospects establish a number of fee-based relationships to justify the $50 cost.

The goal of the meeting started out to be finding a way to generate a significant number of new checking customers and quickly evolved into a discussion on how to make a simple offer complex to save some marketing dollars.

You've been there…you get the point.

If you want to maximize response, maximize revenues, grow market share, have satisfied customers, while minimizing the hassles at account opening, keep your marketing offers simple.

One final note: This month's article should not be considered comprehensive coverage of the offer topic. For example, seven articles about creating and presenting your offer appeared in the March 20 – May 1, 2006 issues of this newsletter under the Ask ACTON subhead.

And an update: Since our August newsletter on marketing during recessionary times, an excellent article on this topic appeared on pages 52-55 in the September 29, 2008 issue of BusinessWeek. Here's an excerpt from the article titled: "Best Global Brands: Gutsy marketers spend into the teeth of a recession. Several of BusinessWeek's 100 Best Global Brands are doing exactly that."

Burt Helm, the article's author writes, "History shows that a recession can be an auspicious time to invest in a brand. Some of the most successful brand campaigns in the past six decades began during economically challenged years. Of Advertising Age's 'Top 100 Ad Campaigns of the 20th Century,' fully a quarter that got underway after 1945 did so during recession years. Several of the most effective were launched in the ugly years of 1974 and 1975, when consumer spending tanked and gas and commodity prices soared (sound familiar?)."