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.

Discount, Premiums, or Both?

Earlier in the week we talked about your clients favorite radio station, W.I.I.F.M., or “What’s in it for Me?” Today we’ll talk about the third of the 7 tips for crafting a compelling offer. To review, see my previous blog posts below.

The question is often asked of me, “Travis, should I use a discount or a premium.” A premium is something you give your client as a free gift for taking the action you want. It can include placing an order, accepting a cross-sell or up-sell or even just opting into your marketing and your prospect giving you their contact information.

I say the only real way to know for sure is to test your offers and see which one wins. However, if time is of the essence, I can make a pretty good argument for premiums over discounts.

My mentor, Dan Kennedy, has said many times 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.” The primary reason of offering a premium is to give ’fence-sitters’ a push over into immediately buying
action.

Good premiums can be of practical value to your clients, for example, a free report on 3D Mail. However, sometimes ‘vanity items’ or things that people just want to have can drive sales, and can often out-perform the practical item.

Don’t think people care about a free gift? Are you clients just too sophisticated for such ploys? Estee Lauder Cosmetics is generally credited with creating the “gift-with-purchase” strategy we now see often with cosmetic sales today. Some of the richest, most sophisticated women in the world flock to such offers at malls and retail outlets daily.

Finally, multiple premiums often out-perform single premiums. How you present them is also vitally important. “Choose any 3 of these 5,” is just one way. I personally love this because its moves the prospect from a “yes/no,” buying decision to, “Which do I want?” A subtle, yet very powerful sales technique.

As you may know, we offer some premiums on our website. However, we’re really looking to increase both they quality and quantity of what we offer. That’s where I need you’re help, and I’m willing to bribe you to do it.

I’ve got a quick survey I’d like you to complete on some of the new premiums we’d love to have available. If you complete the survey, I’ll send you my free report, “Why Premiums Out-Perform Rebates & Discounts,” plus I’ll send you your choice of one of the free gifts pictured below:



Here’s the link:

http://www.surveymonkey.com/s.aspx?sm=SFUdVirTmpBy7g3_2bnkrYXg_3d_3d

All you need to do is complete the short, 4-minute survey by Friday, May 29th and I’ll send you the report and free gift of your choice!

http://www.surveymonkey.com/s.aspx?sm=SFUdVirTmpBy7g3_2bnkrYXg_3d_3d

Stupid easy, ethical S&D

I wanted to bring a great job of ethical S&D'ing from a client of ours. I spoke with Scott Seifferlein at the Super Conference about the now famous x-ray letter. Within a couple of hours once we returned from the Super Conference, he had done an excellent job of S&D'ing my original letter. We had his own x-ray letter created, printed and mailed off in just a few short days.

Here you can see my original letter. Here's Scott's letter. Along with his customized X-Ray. See how easy this is!

Here's some more information on the X-Ray letter you saw at the Super Conference.

Now, had I not given permission to Scott to use my letter, this may have been borderline unethical S&D. However, since I was working with Scott and he was getting the x-ray material through us, I of course gave him permission to do this.

If you're using our 3D mail products (or any 3D mail for that matter), put us on your list. We'd love to see what you're doing. And, if we like it and use it either on this blog or on our site, we'll give you a $50.00 credit towards your next 3D mail purchase with us (YES, I will shamelessly bribe you!).

For a great conversation on ethical S&D, read this months Outrageous Advertising article by Bill Glazer in the Dan Kennedy No B.S. Marketing Newsletter.

Don't have the newsletter?? Well, you should. It to, is Stupid Easy. Here's a free gift from Dan and Bill.