2 Do’s, 2 Don’ts for Direct Mail Gift Offer
With the economic forecast cloudy for prospects and mailing costs downright gloomy for direct mailers, the direct mail gift offer is getting the squeeze. Sometimes it’s being pushed to the Web; other times, once-vital parts of the offer are eliminated altogether, such as for budget reasons or mail processing challenges (lumpy freemiums that cannot take the “squeeze” and are not machinable, thus incurring hefty shape-based surcharges).
However, gifts in the mail aren’t going anywhere. Here’s how they can and cannot be adapted.
Do #1: Do Keep Premiums in Play
When asked if he was planning on testing out of certain premiums because of rising costs, Ted Grigg, principal of the direct marketing company DMCG, based in Lewisville, Texas, answered with an emphatic, “No.” With an insurance company client, for example, DMCG just changes the premium offer. “When we renew our insurance contracts with customers, there is usually a rate increase. We soften the blow by offering them the option to decrease their health benefits, for example, for the same price—or even less—than they were paying before the renewal,” he says.
Of course, Grigg recognizes that rising postage costs leave less money for production and premiums, but that just increases the pressure to get more with less. “Gifts will not go away; [direct mailers] will offer less or find premiums that lift response enough to pay for the higher cost for postage,” he posits. Instead, Grigg recommends the standard cost-cutting move of eliminating marginal or less responsive names from the control list.
Do #2: Do Increase “Virtual” Freemiums
With shape-based rates through the roof and lumpy freemium packages on their last legs, mailers need something other than labels and notepads to use as freemiums, which remain a popular idea with prospects. How about virtual freemiums, such as codes for online discounts? Grigg believes these are good ideas in the current climate, saying such a digital gift “lowers cost for the mailer and gives the mailer an opportunity to upsale during the Internet visit.”
Don’t overdo it, however, recommends Gary Hennerberg, owner of the direct marketing consultancy Hennerberg Group in Colleyville, Texas. “In some instances, I’m already seeing a saturation. I’d watch response carefully only because I wonder if this will become the ‘standard’ or if consumers will tire of it.”
Don’t #1: Don’t Go Crazy With Gift Cards
Do gift cards carry the same weight as actual freemiums? Well, they may actually weigh less, they take up very little room, and customers may prize them if they’re for a relevant store and for a decent amount of money, right? Not necessarily. “Gift cards have less perceived value than product premiums that often retail for far more than it cost the mailer,” explains Grigg, who says that if you decide to go the gift card route anyway, he’s found that free movie theater seats work best.
Don’t #2: Don’t Incentivize the Digital Response
Sure, you could use an additional freemium, special shipping or a deeper discount in order to drive digital replies, but that wouldn’t sit well with a percentage of your prospects. “There’s too much risk of alienating regular customers who aren’t digitally oriented,” warns Hennerberg.
Grigg agrees. “Our analysis shows that there are three types of customers. The customer who still buys primarily through catalogs and direct mail, including inbound calls. The second is the mixed customer who buys through multiple channels, including the Internet. Then a third group that buys exclusively through the online channel. Trying to impact these habits is an effort in futility from what we see at this point.”