Premiums - Freebies from the Financial Side (1,436 words)
Why more credit card marketers ARE using premiums companies spend $23 billion annually on premium, incentive and promotion programs, and the industry continues to grow, it was announced at the Premium Show recently held in New York. Premiums are more than just inexpensive pens and watches—many different types of incentives can be offered and should be tested. A good premium can boost your response and more than pay for the added cost.
Financial service firms are among those marketers using premiums to attract and retain customers. According to Joe Laufer, director of corporate development at Hanig and Co., the company has provided many different premiums for all types of financial service firms to acquire new customers, to motivate customers to activate their accounts and to re-activate dormant accounts. Additionally, premiums are designed to keep people charging at a certain level—with programs such as Citicorp's CitiDollars program.
Besides credit card issuers, Hanig has also provided premiums to insurance companies. The premiums are used to encourage prospects to obtain a quote on auto, home or life insurance. Premiums are also used by banks to entice prospects to open a savings or checking account. Laufer has found that in a direct mail program, a good premium control can beat a premium-less control by 40 percent to 80 percent.
What premiums are currently hot? According to Laufer, one new premium that has garnered a lot of attention is the world's smallest, most powerful travel alarm clock radio. Another successful premium for Hanig has been the three-piece music system, a miniature boombox with detachable speakers. Also popular: his and hers sports watches. One of the larger premiums that has been successful is an old-time radio.
How much will a premium run you? It depends. Hanig has premiums that run from 15 cents to $10. A calculator, for example, can cost anywhere from $1 to $3 depending on the model. The his and hers watches are available for about $1 a piece. The type and price of the premium you offer should correspond with what you are trying to sell—the more you ask the customer to spend, the better the premium should be.