Are You Losing Money With One Time Offer?

one time offer

You most likely know what OTO (one time offer) means.

Just in case you don’t know, OTO is a marketing technique used to increase our revenue at the point of sale. An OTO (one time offer) is typically offered cheaper than the regular price and the offer is good for one time only. It the regular price for whatever is in the offer is $100, the OTO might be priced at $50.

It’s simpler to illustrate with an example, so here it goes…

John clicks the link to buy Premium Squeeze Page Templates and is hit with a $27 OTO offering the PSD files for the templates. The regular cost for the PSD files is $47. This means John is offered a 42.6% discount. If John takes up my offer I’d make $74 in revenue as opposed to only $47 (if there isn’t any OTO). That’s an increase of 57.4% in revenue!

You can see that it’s EXTREMELY profitable to use OTO in your sales funnel and that’s why you see so many marketers doing it.

The One Time Offer Process

But what most marketers do is they present the OTO IMMEDIATELY after the buyer clicks the buy link for the original product he wants to purchase.

A SMARTER way is to let the buyer pay for the product FIRST, and only after that you present the OTO.

You might think there’s no difference between the two scenarios above. There actually is if you pay careful attention…

Some people just don’t like OTO, and these people are going to be turned off and they might change their mind about purchasing your original product SIMPLY BECAUSE they don’t like the OTO you present them. Result = no transaction. You lose money that you would otherwise have earned.

Now, if you were to ask for the payment FIRST before presenting the OTO, you’d at least get the sale (for your original product). After payment is successfully received, then you present your OTO. Even if they don’t take up your OTO, that’s cool because you still got a sale.

Is One Time Offer Evil?

Some people think that the use of OTO in the sales process is evil. I think not. It’s just a way of presenting SPECIAL OFFERS (reduction in price; and in many cases as high as 50% discount) that they wouldn’t otherwise have gotten.

If we as marketers can give customers a special offer deal and save them some money without buying at the regular price, I seriously think they should thank us instead of saying we are evil money mercenaries.

Even though this is the case, we can’t deny the fact that there are people are who are going to be turned off by our OTO (as mentioned above), which is why I advocate you present the OTO after you received payment from them for the original product they wish to purchase.

2 Tips For Increasing Your Profits Via One Time Offer

1. Attain a high sales conversion for your OTO

The way to do this is to offer something that is VERY RELATED to your original product. In my example above, my OTO is the PSD source files for the Premium Squeeze Page Templates, which is very related to the original product.

2. Use two or three OTO instead of just one OTO

This will maximize your visitor value because you’ll get more money out of every visitor you bring into your sales funnel. Again, remember to get the payment for your original product first before presenting the series of one time offer.

10 Responses to “Are You Losing Money With One Time Offer?”

  • Krishna Papan on July 16, 2011

    Interesting that you found that some people changed their mind about purchasing because of the OTO. I would have guessed the opposite because now the customer has to go through the purchase process again. There is one way to know what works best for sure and that is to TEST everything. I appreciate you sharing your insight.

  • Dev on November 26, 2010

    Well! In my personal view OTO is good if it is at reasonable price and having bundle of best products. The newbies who doesn’t know anything about webmaster and product creations, get chance to buy bundle of products at low cost and sell them at reasonable price.

    This way, they can make some real cash.

    Thanks guys.

  • The Income Blog on July 26, 2010

    a make money blogging carnival – July 23, 2010…

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  • mukoma.com on July 26, 2010

    One Time Offer…

    Are You Losing Money With One Time Offer?…

  • Yvonne Anderson on July 24, 2010

    Great post… Personally I love to offer OTOs. As a marketer I am definitely a fan off one-time-offers because I am able to make more money. But it really irritates me when people put up OTOs for products unrelated to the product I am looking to purchase. Or if the OTO is outrageously priced. I want my OTO to be a good offer that people will be happy to take me up on, instead of making them feel obligated or trapped.

    Yvonne

  • I hate those OTO pages where a several javascript window pop up. It is annoying.

  • website visitor on July 21, 2010

    hmm.. o.t.o the subject has been a very captivative one and , unfortunately, exploited by bad guys… lets face it, 97 out of 100 websites that claims O.T.O are truly scam.. but five fingers are not equal.. there are good people.. all you have to is to search for them, get information as much as you can, keep your self motivated and put your guards on when it come to your personal data and always see the light at the end of the tunnel… wish you all the best…

  • Din on July 20, 2010

    I never like OTO.It looks like a trap to me.Sorry to say that but OTO never gets my attention at all.

    • Welly on July 20, 2010

      That’s an understandable perspective, especially if you’re coming from a consumer standpoint.

      Just know that if you’re not using OTO (as a marketer), you’re making a lot less profits that you can potentially.

  • Marcus DeVries on July 20, 2010

    Hi Welly,

    I do not like the way some people present their OTO, however, there are times where it can be considered useful and ultimately profitable.
    After, and only after, someone has purchased something from you and they are happy with that product, and ,that it is related to the original purchase.
    A little patience goes a very long way, that is relative to any given situation. I think too many marketers suffer with impatience, mainly because they are told that with XYZ amount of clicks of the mouse that they will become overnight successes……absolute BS.

    Keep ‘em Rockin’

    Marcus

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