Limited-Time Offers Encourage Consumers to Take Action

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My mailbox has been full this holiday season — full of discount coupons and special offers from all of my favorite places to shop. I received a $10-off coupon from LLBean, free panties from Victoria’s Secret, free shipping from J.C. Penny, 30% off from Lee jeans and $25 off of a $75 purchase from Express to name a few. The catch, of course, is that each must be redeemed by a certain date. The obvious reason retailers created these promotions is to incentivize consumers into spending money in their stores or online.

I don’t know about the rest of you, but I hold on to many of these “great offers,” sometimes long after they expire, because I always have it in the back of my mind to use the coupon. That is, of course, if they have an item that I am in the market for. This season, I used quite a bit of these offers because I was trying to save money on Christmas shopping. Knowing that I had an offer encouraged me to select a gift from that store. I am assuming many of you are the same.

I was speaking to a client recently about a notable fund-raising raffle that he directed. The raffle sold high-price raffle tickets over a period of four months and culminated with a drawing. There is, traditionally, a spike in raffle ticket purchases with the immediate launch of a campaign (i.e. within the first week). Then the sales slowly drop. Raffle purchases generally drop until the last week when a call to action is made public, reminding folks that it is the last week to buy. Approximately 70% of tickets are sold the last week of the promotion — when people realize they have no more time to buy.

My client told me that his solution to this was to have a promotion mid stream — an early bird drawing that shared a second valuable offer if folks purchased their tickets by the third month into the promotion. Again, this gives a strong deadline, encouraging the public to buy a ticket by a certain date in order for a chance to win. This strategy helped increase sales midstream.

I was thinking about how this strategy could work for our client base. Our clients typically don’t conduct raffles, but they do implement promotions and could create special offers for value-added services to attract new customers. Creating a sense of urgency or a limited time offer may be the way to get prosects to act now!

Examples:

• ABC company is offering a FREE risk-assessment download. This limited time offer is good through Jan. 30, 2010.
• Bring this coupon in for $50 off your next service by Jan. 30, 2010.
• Sign up for our newsletter by Jan. 30, 2010 and receive a free T-shirt.
• Spend $200 with us by Jan. 30, 2010 and receive a $50 rebate.
• Sign up for a free checking account by Jan. 30, 2010 and receive a free tote.

The point is to make a big deal surrounding the deadline! People are procrastinators and need motivation to “act now.” No matter what business you are in, you can use this strategy.

Let me know how this works for you.