Formulating the offer. (Direct Mail Essentials).

"Make me an offer." That's often a salesperson's favorite way to get the sales process started. And, in direct mail, there are two important variables in the process of creating a successful campaign: First is selecting a list; second is designing the offer.

The list ensures that you are speaking to the right persons. The offer ensures you are saying the right thing--words that will motivate people to respond. The best copywriting and the finest photos will be ineffective if the offer doesn't appeal to your reader.

What makes an offer?

The offer has two parts: One is a benefit to the reader, the other, an action the reader must take. For example, "Pay no closing costs (benefit) if you apply (action) for your home equity line of credit now." Or, "Earn X percent interest on a money market account (benefit) if you deposit $10,000 or more (action)."

Your offer must logically balance the desires of the reader (earn more interest) and the needs of the bank (a profitable interest margin). The offer can be challenging because it is at the core of both the effectiveness and the profitability of the promotion. if you're too generous and generate a big response, the bank suffers a loss, If you're too generous to the bank, you risk getting little or no response. Usually, though, you can use a mix of internal cost analysis and competitive reality to come to an effective compromise.

Your offer typically will include a time frame or deadline: For example, "Apply by November 30 to qualify." The time requirement is important for several reasons:

* It establishes urgency for the consumer to respond now, Consumers receive new offers daily from all types of advertisers demanding attention, As time passes, a consumer can cool to your offer or be distracted by other more immediate concerns. Thus, stating a deadline with your offer keeps it on the respondent's priority list.

* A deadline establishes the time period for the bank's pricing liability, if any, in the offer. For example, you would likely want to limit the duration of a reduced interest rate offer on a loan to a specific time period in which your rate assumptions will be valid.

What makes your offer effective?

Your offer should be stated concisely, and it should always be clearly identifiable high up in the mailer. Effective offers don't typically deal in subtleties.

Structurally, there are many options for building an offer. For example, an offer can be based on fee or price reductions, interest rate bonuses, free gifts, referrals or free trials. And, the offer structure may vary for deposit or loan products:

Loan products. For a product such as home equity credit, your offer might incorporate a discount on fees such as closing costs. Or, you can offer a number of rate incentives, such as a teaser rate: "Apply now and pay only X percent for the first six months, then your rate is at prime." Or, make an extended rate offer: "You can have a fixed-rate home equity loan at only X percent for the next three years if you apply before November 30."

For mortgages, the offer might be stated as "Pay no application fee on your mortgage if you apply now."

Deposit products: Your direct mail campaign for a certificate of deposit might take the form of a postcard with the offer: "Add a bonus of 0.25 percent to our X percent certificate if you also open a checking account by November 30."

When designing your direct mail, state your offer at the beginning and again at the end of your copy--and develop the features and benefits in between. Typically, the offer should be condensed to a single statement and not scattered in pieces throughout the mailer. The reader must be able to see the proposition clearly and quickly without losing interest. Write it as if you were simply talking with a customer, so the reader will quickly understand the benefits and what action must be taken to qualify.

Jim Turner is President of Etra Corp., Naperville, Ill. The company provides advertising and research services. He can be reached at [phone] or at [e-mail].