Five Ways to Use Premiums to Close the Deal for Good
The thought of receiving something for nearly nothing is seemingly irresistible—after all, we’ve built entire holidays around the thrill of getting gifts—and because of this, the addition of a premium to your offer can boost response to your direct mail campaign. However, many mailers overlook the fact that premiums have the potential to lead less-than-desirable prospects to your offer. It’s sad but true; “Some people respond to direct mail offers just to get the premium, then they cancel their order,” says Alan Sharpe, president of Sharpe Copy, a direct mail copywriting agency based in London, Ontario. And there lies the rub.
The hidden issue with premiums is that of quality vs. quantity—if mailers aren’t prepared for the masses who are just in it for the iPod, tote bag, cake pan or clock radio, the negative impact on the bottom line can be considerable, and that’s not just in terms of dollars and cents. According to Dean Rieck, president of Westerville, Ohio-based copy and design firm Direct Creative, “If all you do is boost response, then have returns and cancellations and a poor customer list, the premium is counterproductive. … The real issue is boosting response among customers you want.”
Read on for a few ways to employ premiums that will help you increase your net profit without sacrificing the integrity of your customer pool.
• Promote the product, not the premium. According to Sharpe, “Your premium is the bribe for saying yes now … not the reason to act.” And although this is a rather elementary rule, it’s often broken by mailers too enamored with a popular or particularly desirable gift. Should the premium overshadow the product, Rieck says, “[it] can lead to returns and fickle customers. If your premium is better than what you’re selling, maybe you should be selling the premium instead.”
• Use a premium to drive traffic to your Web site. Try offering the freebie as a back-end premium, one that customers specifically have to request online. Sharpe suggests using copy such as: “Receive your [insert premium here] now by ordering online at www.store.com,” as an example of how to encourage your prospect to take the next step. “You avoid front-end premium collectors because you only mail the premium to people who buy,” he explains. Plus, you’ll increase traffic to your Web site, where the products rule the roost.
• Ditch your premium altogether. While adding a premium can have a positive impact on your bottom line, don’t count out testing your package without it. When your cost-per-lead becomes too high, or your competitors start offering the same premium, it’s time to test your package sans premium, Sharpe says. Rieck agrees, “You should always test ditching a premium, just as you would test ditching other elements of your direct mail package. … The goal is to have the leanest and most economical package possible.”
• Use a fast fifty offer. One way to increase your ROI on a pricey premium is by testing a fast fifty offer. Rieck suggests using copy such as: “Be one of the first 50 callers and get a bonus digital camera free,” to compel a prospect to respond and respond quickly. You’ll be able to capitalize on a luxury premium, without having to send it to every person who responds. But keep your eye on the bottom line, Rieck warns. “Boosting revenue $100 at a cost of $120 doesn’t make sense.”
• Create a parallel between the premium and the product offered. You almost always will increase the volume of your orders with an extremely attractive premium—but by creating a parallel between the premium and the product offered, you’ll improve the quality of those orders, Rieck says. “Anyone can boost response by giving away free things, but the question is, do you make money? Do you acquire a good customer?” He recommends slow-moving products, pamphlets or literature as places to start looking for an appropriate premium. “If you’re selling a gardening book, a specific premium offer would be a pair of canvas gardening gloves or packets of flower seeds. … The more related it is to what you’re selling, the better,” he adds.