Why do Premiums out Perform Discounts and Rebates?

We're going to start a new series of tips on premiums. We briefly went over them last week, and based on the responses I got, you guys want more! So we'll start with a quote from my marketing mentor, Dan Kennedy:

“Too many marketers deal with premiums almost as an afterthought. This is a huge mistake. I know for a fact that premiums can and do drive sales, and that a change of premium, with no other changes, can dramatically alter the results of a promotion. For this reason, just as much careful thought should be given to the premium as to the main offer.”
– Dan Kennedy, Power Points #34

Research has shown that a direct mail letter with a premium offer can out pull a sales letter alone by as much as 300%! Before we get too far into why they work so well, some of you may be thinking, “What is a premium?”

A premium is anything of value your prospect/client/patient receives for taking some action that you want. Often, the best premiums are not even tied to whatever it is that you’re offering! It’s often an unrelated item for the personal use of the buyer and not even for their business (if you’re selling B2B). The key is that is has perceived high value. It may not cost a lot, but it should look like it cost a lot.

When offering premiums, a picture is worth a thousand words. Always include a picture of the item, as this is much more effective than simply describing the item.

There’s a reason why for years Sports Illustrated gave away a sneaker phone. There’s a reason they now give away your choice of any of the 32 professional football team shirts. Why? Because Sports Illustrated knows that premiums work! They’ve be doing it for decades now.

The Estee Lauder Company set the standard with their “Gift-With-Purchase” strategy that is now rampant in the cosmetics industry, and others. The allure of ‘something for nothing’ has always enticed consumers. Doesn’t it make sense to appeal to this very basic, controlling emotion?

Stay tuned for later in the week when we discuss why premium offers improve direct mail response. Have a great week.

Looking for ways to increase your response rates, or reduce returns? How about you offer a free gift! We have many premiums (free gifts) in a wide variety of price ranges.

From inexpensive kitchen shears that cost $1.04 each, to elegant table top clocks for as little as $31.29 each.

We’ve recently added dozen’s of new premiums to our product line, and are adding more every week. Don’t see something that sparks your interest? Reply to this email and tell me what you want, and I’ll find it! We can source 1,000’s of different premium items.

If you have a product or service with a large transaction size, or you know you have a very large long-term value in a new client, go with something a littler nicer, and sometimes a little more expensive.

If you have a smaller transaction size, consider using one of the more inexpensive options. Free gifts are always a good way to increase your response and your ROI.