Is It Time to Test a Freemium? (815 words)
They shouldn't do this to me! My mother did it to me when I was little. I'm grown-up now. It shouldn't still be happening. And yet, they still make me feel guilty. Who? The direct marketers, that's who. I didn't ask for all those cards and labels, but I keep using them. So I have to keep sending them money.
A freemium is a little something extra in a direct mail package. Its purpose, of course, is to lift response. It does this by involving the reader or giving the reader guilt. It gets its name from the fact that it's free (in other words, it's a front end premium).
Who among us has not received a mailing from a non-profit institution with greeting cards enclosed? "Keep the cards" and send us some money. Does it work? As Denny Hatch says, if it didn't, you wouldn't keep seeing it. Fund raisers are the biggest users of freemiums, but some for-profit mailers also have found including a freebie to be an effective response booster.
More popular than greeting cards are personalized return address labels. How they work: If you keep and use them, you feel guilty if you didn't send a contribution. They used to always come as a little pad, sometimes two or three pads in a mailing package. Now they also come on a pressure sensitive sheet.
There are other freemiums as well. Covenant House and Agora Publishing (not a nonprofit) both send out books. Agora has found that it is better not to even mention the book in the package because it reduces response by drawing the reader's attention away from the offer.
Don't confuse freemiums with other free things you get in the mail. Those disks from AOL are part of the product being sold. Video tapes from mutual fund or travel companies are really brochures.
Refrigerator magnets are a good freemium because they can be machine inserted and won't stop your package from getting automation discounts in the mail. The magnets can be printed with any kind of message: reminders like the local pizza parlor phone number or emergency medical and help information. These are therefore used as profit and nonprofit freemiums.
Stickers and stamps are a great freemium in offers to children and are used by Highlights and Kids Discover.
Also consider a magnetic postcard, which can convey your entire message, and can be printed in four color, laser personalized and sent through the mail like any other piece. The magnet is a keeper that usually contains a phone number needed to order the advertised product.
Slide charts are also used as effective freemiums. They can convey useful information about a product or fun things like baseball schedules. Slide charts can be formatted as slides in sleeves or wheels. They also can go through the mail as part of a package without having any implications on postage costs.
Other freemium ideas used lately are:
• A red Ribbon from Mothers Against Drunk Driving.
• A small (32-page plus cover, 4˝x 6˝) book from Salesian Missions.
• Remy Martin Gift Tags for the recipient to use on bottles that will be given as gifts to others.
• Decals from the Animal Legal Defense Fund and Amnesty International.
• Seeds from World Vision.
• Wall Calendars.
• Wallet Calendars.
• An Angel Pin from the St. Labro Indian School.
What is really exciting about these freemiums is that almost all of them can be machine inserted into your outer envelopes and most will still allow your mail to go out as "Standard A" letters. The additional cost is therefore only the cost of the production of the freemium and the inserting of an extra component.
In reviewing the above list, you will also note that most can be produced rather inexpensively since they are printed paper products.
Many freemiums are consumable. People will use them and want to get more of them. This increases the freemium's desirability to the recipient.
The creative thinking that goes into selecting a freemium and ties it to the product or cause you're promoting is also of great importance. Test your freemium before you roll out to be sure it'll pull.
Important Note to Nonprofits: If you mailing at non-profit rates, be sure that the value of the freemium and/or premium does not exceed 25 percent of the requested contribution. If it does, you will lose your non-profit mailing rates. The postal service is currently auditing mailings to make sure these rules are adhered to.
If your freemium increases your sales and still does not "break the bank," it could well lead to breakthrough response and profitability for your organization. Good luck!
DICK GOLDSMITH is president of The Horah Group, a direct marketing production agency located in New York, NY. He can be reached at (212) 684-1615 or by E-mail at firstname.lastname@example.org.