Especially For E-commerce Stores
(With lessons from Steve Jobs, Tim Ferriss, Russell Brunson)
It’s no secret that having a Great Offer is the key to scaling on FB with high ROAS.
This is why we always see a spike in results during promotions like the 4th of July.
But the downside is sales tend to drop drastically after it ends.
And the problem with constantly giving a discount is it actually trains the customers to only buy whenever there’s a discount. Not to mention that it lowers your profit margin and cheapen the brand in the long run.
But the good news is it’s possible to create a great offer even during the non-promotional periods and without constantly giving too much discount
To make it easier to digest, I’ve broken this ultimate guide into 3 parts: What, Why and How
What Makes A Great Offer
“Make Your Offers So Great That Only A Lunatic Would Refuse To Buy.” – Claude Hopkins
Great offer = (Higher than expected perceived value) ÷ (lower than expected perceived cost) x Urgency
An offer is whatever the customers are hoping to get when they buy.
A great offer makes your specific audience wanting to buy immediately. Gotta-have-it-now emotion.
Many people think that creating great offers is about giving massive discounts. Or charging very cheap prices.
But the truth is: It’s about the “perceived cost” in relative to the “perceived value”
For example, instead of giving a discount, you can also increase the perceived value. (The emphasis here is on “perceived”)
One of the best ways to increase the perceived value is: don’t sell the product, sell an idea/concept/goal/dream instead.
“The Four Hour Workweek” book by Tim Ferriss is a great example.
If you’ve actually read the book, it’s mostly about systemization, optimization and delegation.
These concepts are nothing new or groundbreaking. He’s not the first person to come up with it.
But it became so popular and successful because of the concept and idea that he’s selling: the ability to work for only four hours a week.
Damn Brilliant Offer.
Another great example is the iPod.
Instead of selling an MP3 player, or a “disc-less walkman” music player, Steve Jobs sold the idea of the “thousand songs in your pocket.”
– Instead of a perfect white teeth, sell the idea of having the perfect Hollywood Smile
– Instead of selling an anti-aging cream, how about a $100,000 stem cell in a bottle for only $100?
– Instead of selling a face mask, sell the idea that it’s an every day acne/blackhead defence
Don’t sell the product. Sell an idea (more on this later)
5 Reasons Why Having A Great Offer Is So Important For Scaling
(Skip to the next section if you know this already)
1. Great offer gives you high conversion rates (CVR)
This is important because:
If you were to break it down:
E.g. If your CVR increases by 30%, your CPA dropped by 30%.
Since ROAS = AOV ÷ CPA,
If CPA dropped by 30%, ROAS increases by 30%.
E.g. from ROAS of 3 to 3.9
Don’t get the math? Here’s a free calculator. No opt-in needed
2. Great offers allow you to charge higher prices
When done right, you can even INCREASE PRICE and CONVERSION at the same time – A double whammy effect on ROAS.
Think about it, which offer are people willing to pay more:
– Learn how to systemize and delegate their work
– Learn how to work only four hours a week
Another great benefit is by charging higher price (and therefore higher AOV), you can afford to pay higher CPA to acquire more customers.
Great for fast customer acquisition.
3. Get Much Higher Profit Margins Even As You Scale
When you have higher AOV and lower CPA, your ROAS and profits will skyrocket dramatically
4. Great offers get a lot of attention and social shares
The most amazing thing about the 4HWW book is the idea became so popular that many people became strong advocates of it… even though they have never read the book before.
Great offers get people to share and tag their friends and turn them into loyal followers.
5. Great offers can help you to stand out in a highly competitive industry and can even disrupt an industry
Apple’s iPod was not the first MP3 player. It was also not the best. Sure, it looks really nice and cool.
But the core marketing idea of 1000 songs in a pocket helped propel them to the top.
How To Create A Great Offer
Recap: A great offer is about having a high perceived value and low perceived cost.
Having a high perceived value is all about perception and positioning of the product.
Here’s a quick example to show you what I mean:
If you look at the two orange circles in the image below, which circle is bigger? The left or the right?
On first glance, the right one seems bigger.
But taking a closer look, both circles are actually the same size.
What made the difference?
Answer: The grey circles surrounding them influence your perception of its size. The way they are positioned and framed.
The same principle applies to creating a great offer: Position and frame the offer in a way that creates a higher perceived value in relation to other solutions.
3 Quick Tips To Have Higher Perceived Value:
- Don’t sell the product. Sell an idea/concept/outcome
I’ve talked about this above already.
But here’s a few more examples:
– Instead of selling an abs workout machine, sell a 7min flat tummy machine
– Instead of selling 100% pure cold-pressed essential oil, sell an instant mood reliever. Or a daily sleep enhancer
– Instead of selling a mini makeup kit which you can put in the handbag, sell a 30sec Camera-Ready Makeup Kit
- Make it unique and exciting.
If everyone is selling similar or the same product, position it with something new or different offer.
If your competitors have already used that positioning, find something more exciting.
- “Stack” on more values
If you’re familiar with Russell Brunson’s Value Ladder, essentially, it’s the same idea:
Add on more value, gifts or bonuses to make it more attractive
(Pro tip: for the bonuses, use something that has low actual cost but high perceived value to the target market)
All Great Offers Must Be Supported With Great Demonstrations
It’s not just about giving it a cool fancy name. Or just focusing on the benefits.
Having a great demonstration not only give it credibility and proof, it also fans the flames of desire and get people to act immediately.
This is where the creatives become a really important aspect.
Our agency has a 5V Formula for creating strong product demonstration – Visual, Vivid, Visceral, Valuable, Viral.
How Ecom Stores Can Scale Fast On FB By Creating Great Offers
Instead of constantly giving a discount or a sale, find ways to create new offers every month.
First, put all the major sales periods like Black Friday, Christmas, Mother’s Day, 4th of July, etc in the calendar
For those months or period where there are no promotions, put together different offers (concepts) or packages that have high perceived value.
Use scarcity to create FOMO and get them to act now.
Plan for the rest of the year and schedule them accordingly.
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One Final Point:
Here’s the thing: Creating a great offer is not as difficult as it seems. You don’t have to be Steve Jobs in order to create one. Or spend millions of dollars in research to invent one.
The most important thing is to come up with an idea that is unique, valuable and have higher than expected perceived value to your target market.
We’ve helped several agency clients to grow from zero to $1mil in 1-2 years after creating great offers for their brand. Even though they started out without any brand awareness, many of them went on to become the dominant players in their industry.
That’s the power of having a great offer.
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Important Disclaimer: While Having A Great Offer Can Make You A Lot Of Moolah, It Does Not Give You The Permission To SCAM Your Customers. Always Make Sure That You Can Deliver What You Promise
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