The Basics And Significance Of Limited Time Offer
Consider yourself in a Starbucks store on a cool autumn evening, which latte would you go for, the one that is available every day or the season’s specialty?
The season’s specialty should be the clear winner. The Pumpkin Spiced Latte is one of the most outstanding limited time offers of Starbucks. The reason why Starbucks lovers go crazy for it is the unique taste that they can only enjoy in the fall. This, in turn, makes it one of the most sought after and popular Starbucks products, it also contributes to elevating sales.
So, what is the secret behind this ever-increasing Spiced Latte fandom and love?
Anticipation – a powerful force that is sure to bring multitudes of customers running through the doors. A limited time offer is a perfect tool to maximize this sales-increasing factor by huge numbers.
The power of a limited time offer is undeniable. At some point, all of us have been tempted by a limited time offer and had the urge to get our hands on that exclusive item before the offer expires. A limited time offer is probably the best marketing tactic that helps instill a sense of urgency among potential buyers and customers – a surefire way to increase conversions.
But before you jump on the bandwagon of exclusivity, let’s get a clear idea about the basics and significance of a limited time offer.
Basics 101: What exactly is a limited time offer (LTO)?
A limited time offer is a kind of a gift, reward, or a deal that a buyer gets when making a purchase within a certain period of time. It is one of the most widely-used marketing tools to attract users and customers.
“Last chance to get up to 30% off – the sale ends today”.
Everyone probably knows where this line is taken from – a promotional email. The notable part of this email is the keywords that play a pivotal role in driving sales. The terms “last chance” and offer expiration date are enough to compel the audience and buyers to explore this offer. Terms like these induce an immediate sense of loss which spurs the buyers into action. Limited time offers are a way of keeping your company at the forefront of the customer’s minds and memory.
Let’s bring in the human psychological aspect of the LTO. Anticipation powers the loss of aversion.
It’s simple human psychology that we hate losing be it a valuable possession, argument, or an amazing discount or offer. Coupled with the distress of loss, LTO triggers urgency which plays on the fear of missing out and in this highly-modernized world, no one wants to miss out on something valuable or an incredible experience.
Christmas sales and Black Friday sales are the best examples of this. Every year amazing Black Friday and Christmas sales and deals are rolled out, and such sales are probably the most revenue generating deals of the whole year. Take the example of Amazon, which succeeded in generating a solid $6.2 billion of revenues on Black Friday 2018 as per Adobe analytics.
The working principles of LTO
Every digital marketer and eCommerce manager is quite aware of the importance of bringing the customer all the way to the last payment step. For most eCommerce sites, e-retailers and e-stores, the average cart abandonment rate varies from a surprising 67.4% to a staggering 83.7%, according to Statista. Where many marketers and eCommerce managers work on remarketing and the fixation of funnel leaks, the optimal use of limited-time offers are a promising way to deal with the abandonment dilemma.
From KFC’s Double Down to McDonald’s McRib, these products are known for creating unadulterated anticipation and utter exhilaration. When these sandwiches hit the outlets, they were crowned with being the best-selling sandwich of these food chains. While the KFC double down generated some huge social media activity, the McRib was the chief contributor to increasing the sales of the company by 4.8% in 2010.
The buzz and excitement around the McRib are because of its exclusivity and rarity.
Principle #1: Scarce won’t kill your business
This savvy and intelligent piece of marketing by McDonald’s is commonly known as scarcity marketing. Scarcity is the fundamental element of LTO marketing. The power of limited supply and access can generate rabid demand for products. The entire concept of supply and demand revolves around the idea of scarcity. The principle is quite simple and understandable – making a product difficult to obtain automatically skyrockets its demand.
Principle #2: Cash-in on a customer’s procrastination
Introducing a sense of urgency not only makes your customer think twice before scrolling up the offered deal, but it also generates the immediate need to take the required action. Most online visitors and customers are procrastinators – a harsh word to use. However, in some cases, procrastination is not a bad habit. A study done by Centre De Recherché DMSP shows that 73% of visitors are high procrastinators, unable to make immediate purchase decisions.
Leveraging the power of scarcity and introducing an element of urgency assist these high-procrastinating customers to speed up the decision process. The objective is not to convert the potential customers into rabid buyers; it is to encourage immediate actions and purchase decisions.
The best example of perceived scarcity fueled by a galvanizing element of urgency is Amazon. From amazing gold box deals to various daily lightning deals, these deals and discounts consist of some of the top products in the best price ranges. However, Amazon uses a time restriction for the accessibility of these deals and offers. A time counter labeled as “ends in” tells the user about the validity of the offer.
Key components of an amazing deal
From Starbucks shimmery and festive mugs to Coca Cola’s label bottles, a limited edition product is one of the most effective sales tactics of the current marketing and business worlds. The concept of LTO is quite simple, plus it also provides you with enough room for creativity. However, remember the key rule – don’t make an offer unless you are able to provide it.
Running an LTO marketing campaign on your website is all about offering something in-demand and worthy of buying to your customer. Otherwise, it’s just another product on a shelf. So before you declare a product to be exclusive and enforce the principles of scarcity and FOMO-ism, make sure you have a compelling deal to offer.
Here’s what you need to keep in mind when it comes making a great limited-time offer:
- Lead magnet: Make a great proposition when it comes to making a lead magnet. You could create a quiz, downloadable cheat sheet or checklist as an incentive for email signup.
- Convincing bid: Leverage the benefits and influence of a limited time offer to compel your business prospects to make immediate purchase decisions. Utilize the extra sense of urgency.
- Risk abrogation: Provide your new customers with free trials or money-back guarantees to introduce a sense of security and trust among the newly gathered group of audience and customers.
- A Reward: Customers love free stuff, so providing your customers with buy one get one free is a definite game-changer for your business.
- Not-so-scarce urgency: From a fast-food marketing gimmick to innovative tech-industries and stores, almost every business is benefitting from this advantage of limited time offer.
The key takeaway here is when you make a limited time offer, be honest with your customers and visitors. If you say, the offer expires at midnight make sure that you make it invalid once the clock strikes twelve o’ clock and display the original prices.
Tips for launching a successful limited-time offer
All it truly takes to launch a successful LTO is to make maximum use of it. When you make a product exclusive, set a certain time period for its exclusivity and make it clear and understandable for the prospects.
To make a great offer, you need to understand the customers, business industry, market niche, and most importantly, the potential competitors. The deeper your knowledge is on these topics, the better your offer will be. However, if you are looking for a proposition that will sell smoothly, having a clear understanding of sales funnels, digital marketing strategies, and email sequences are of key importance.
Once the traffic is on your site, your offer will turn the window-shoppers into potential buyers.
Here are a few amazing ideas and tips that might help you in jumpstarting your LTO marketing campaign:
- The landing page is not the only place to provide your customers with LTOs. A hidden surprise LTO could be a transactional email that encourages users to make another transaction. For example, you can hide a surprise offer when you send the purchase receipt.
- Price reductions and discounts are not only ways to provide an LTO. You can also offer free surprise gifts, exclusive services, and free upgrades as an LTO. For example, McDonald’s melting Icy coupons, Virgin mobile’s cinematic mobile rewards, Amazon’s treasure truck, and many more.
- Limited time offers are also a great way to check the need and demand of newly-launched products. Making a new product exclusive not only sets forth the demand for the product, but it also determines the response of potential customers.
- You could also provide customers with incremental price changes rather than instant price variations.
- Highlight the benefits that the user might reap if they use the offer. Don’t just urge them to take a particular action but focus on the benefits to generate immediate action and responses. Don’t just tell them to “Buy Now” instead bring the benefits in focus like “Buy now and get up to a 50% discount”.
The best part about limited time offers is that they actually work well. If implemented properly, an LTO is sure to provide you with increased sales and profits.
Infallible ways to make your audience act on LTO
The fact that a product is available for a certain period of time not only makes it special, but it also makes the audience feel like a part of an exclusive club. However, every high-converting limited time offer has certain attributes, and you can easily leverage them to attract the potential audience and business prospects. Lets’ walk through some of the incredible ways to generate immediate response and action from visitors:
Become a part of the experience economy
Experience is now the most in-demand economic offering that a business can provide. Customers desire to experience more than a high-quality product. From a huge tech company to a small coffee shop, staging experience is one of the toughest aspects of today’s business world. Take the example of Nike town and British Airways.
Determine the factors which make your deal different from your competitors. Focus on how you can use the benefits and usefulness of your product to provide a great experience to buyers and customers. Once you know the differentiating factors of your deal and the new experience the customer might get, launch an enticing advertising campaign to get things going.
Define the offer ending dates
Leaving ambiguity about the validity of the offer might not cause the audience to act immediately. Without a definitive deadline, your audience might think that the offer would be available till next week or day. This opposes the entire concept of LTO – the whole purpose of which is to get the audience to act instantly.
Use phrases like “ends at midnight”, “valid for today only”, or “last chance” to increase the level of urgency among the audience.
Keep it simple
Keep your offer simple and precise. Include only those points which will compel the audience to act immediately like benefits and a deadline. Stuffing marketing material and promotional content in your offer might make it difficult for the audience to understand the offer.
Start by composing a simple deal, write the offer in the simplest words and include only the necessary information. It not only makes the offer easy to comprehend, but it works well in grabbing the attention of the audience.
Honesty is the best business policy
Being completely honest with your customers and visitors plays a great role in developing trust. Be honest about the offer expiration dates and the stock supply. This also includes false claims; if you say that everything is on sale, then it means that everything should be on sale. Don’t put your customers through the hassles and troubles of figuring out which items are on sale and which are not. It not only causes a loss of loyal customers, but it drives away new customers as well.
To sum up, there are a number of ways and tactics you can use to compose and gain success through your limited time offer.
Here are a few incredible ideas that might come in handy for your next limited time offer campaign:
- Build and develop a well-structured landing page for your limited time offer.
- Since text is not as attention-capturing as video content, employ a well-composed video to convey the limited time offer.
- Where video content is a surefire way to grab attention, words remain a crucial element of the limited time offer. Get creative and clever with your text.
- The reason mango is the most loved fruit of numerous fellow countrymen is that it’s seasonal. You want to hit record sales, include a seasonal product in your limited time offer.
- Nothing excites customers more than free stuff and giveaways, provide a gift card or a free item in exchange for a particular purchase.
- Use emojis to keep your emails interactive and engaging.
- To increase the engagement of a particular audience group, offer sales and discounts on a certain product category.
- You know why the last fifteen minutes of an examination goes faster than the rest of the hours, it’s because the ticking clock induces a sense of urgency and the need to act quickly. Now employ the same phenomenon in your limited time offer, place a time counter at the top of your page to instill an added sense of urgency and prompt action.
The bottom line
Limited time offers are probably one of the smartest marketing tactics available. They not only drive sales; rather, are a way of gaining new customers and expanding the reach of your business. However, time constraints are not the only things that conjure your audience to act, but the way to compose your offer is also of key importance. Use this guide to define not only the success rate of current LTOs but also future ones.