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3 Gift Ideas You Can Use Right Away to Increase Sales
3 Gift Ideas You Can Use Right Away to Increase Sales
How premiums and freemiums can boost response
It's always nice to get a gift. But as an entrepreneur it's even better to do the gift giving - if you do it right!
The most important thing in gift giving is to offer something that has a high perceived value for your prospect.
I'll tell you how in a moment, as well as how you can use gifts to double your marketing response.
But first, it's important for me to explain the two types of gifts I'm talking about:
1. Premiums. These are gifts you send only after a customer purchases something. For instance, a t-shirt with your favorite NFL team's logo on it when you subscribe to Sports Illustrated is a premium. Chrysler's $2.99 gas guarantee for 3 years when you buy or lease a Chrysler vehicle is another example of a premium at work.
2. Freemiums. These are gifts that you send even though the prospect never purchased anything. A refrigerator magnet with helpful energy-saving tips sent to prospects who never requested it is an example of a freemium. A set of return address labels from the World Wildlife Fund that's sent to potential donors is another example. A freemium can also be used when someone simply takes an action on your website or calls you. For example, you can give an ice cream scoop to every prospect who calls to 'get the scoop' on your product of service.
Here are three of my top gift ideas that include premiums and freemiums you can use right away to increase sales.
Top Gift Idea #1:
AAA calls it the best premium ever!
One of the best premiums you can give is a rebate. A $40 rebate on a $90 product, for instance, is a great incentive.
But here's the dirty secret that no one in the industry will talk about: About 40% of all rebates never get redeemed because consumers fail to apply for them or their applications are rejected, according to analysts at the consulting firm Vericours.
So does that mean you shouldn't offer them?
No. Just the opposite. The rebates get consumers to focus on the discounted price of a product and still pay full price so they can get the savings afterwards. And if only 60% of buyers are taking advantage of the rebate, the rest is free money to you.
Gas rebates are one of the most popular right now. Everybody is worried about high gas prices, which is why this premium is a sure way to get prospects to respond.
Why use a gas rebate as a premium offer? Because it has everything you want in a premium: high perceived value, low cost and something everybody needs ' cheaper gas! What's the catch? Some people won't redeem the rebates more than several times so you can give a card worth $40 for a fraction of the price.
AAA says that the gas card is the best premium they've ever used. General Electric has gone through over 100,000 gas rebate offers every month for 3 months in a row! Their customers, sales people, board of directors and customer service people love them.
Top Gift Idea #2:
Everyone can use a free getaway!
Free vacation certificates are another terrific premium. Just add the words 'FREE vacation ' 3 days and 2 nights' to your next promotion. I've worked with packages that have a $200 perceived value but only cost around $5! Clients choose the dates they want from national hotel chains (Marriott, Ramada Inn, Holiday Inn, etc.) in prime locations and because the hotels would rather have the rooms used and not sit empty they're willing to give them away as a 'loss leader.'
Many travelers choose to stay an extra 2 or 3 nights once they are there. But there is no pressure or obligation to stay extra nights.
Be careful because there are a lot of sleazy 'free vacation deals' that you don't want to subject your clients to. It will only make you look bad if you send them on a bargain basement vacation. By the way, Orlando is the # 1 most requested destination. For the vacation certificates I use, go to www.LumpyMail.com.
Top Gift Idea #3:
A Franklin always grabs my attention!
If you're looking for a 'wow' factor that will grab your prospects' attention, try adding a $500 'money slip.' At first glance, it looks like a $500 bill complete with Ben Franklin's picture on it, just like on today's $100 bill. Look closer and you'll see it's a coupon redeemable for $500 in FREE groceries. By adding this 'irresistible bait,' I've seen response rates double.
Everyone can use $500 in free groceries. Here's the catch. Give the $500 grocery slip to everyone you send your promotion to, but they can't redeem it for a 'live' grocery gift card until they call you to take some sort of action, such as fill out an application or come into the store. They only get the free gift once they take an action.
I'm not a big fan of drawings. People want to know for sure whether they're a winner. Lately, I've seen a lot of drawings for an iPod. But most people ignore those offers because they don't think they're going to win. I'd rather offer something that prospects know they'll get.
One way to do that is to offer what I call the 'Nifty 50.' This is where you offer an expensive item to the first 50 people who respond. People are more likely to respond because their chances are better of winning and you overcome one of the biggest barriers to responding to an offer, which is procrastination.
You can also use freemiums to continually remind your prospects about your product or service. For instance, send them a jar gripper with your logo and a message on it that says, 'Hey, it's time get around tuit.'
How one freemium boosted response to 21% from 1.0%
Another classic example of a freemium is a free pen. Royal Bank gave away free pens in their mailings and it increased their response rates from about 1.0% to more than 21%. That's a 2,000% increase in their response simply because it invoked the Law of Reciprocity: I give you something and you give me something in return.
The idea behind a freemium is that you want to stay in front of your prospects. You want to be in their car, on their wall, desk, kitchen, refrigerator, hands and pockets, as many places as you can be. If you have a B2B company, you want to be on your prospects' desks.
If you're involved on a personal level, you might want to be in your prospects' kitchens. Offer to send them a pizza cutter when they respond to your offer to give them 'a larger share of the pie.'
Which type of gift performs better?
It depends. I've seen both premiums and freemiums work well. The important thing is to test the approaches to find out what works best for your market. In the past, Kiplinger's relied mostly on offering premiums with every newsletter subscription, but recently found promotions with freemiums performed better.
Included in each promotion is a 4-color insert called '12 Grade-A Ways to Build a Nest Egg for Retirement.' The freemium doesn't cost much, yet provides a value-added benefit that discusses the most popular finance issue among its prospects.
Generally speaking, freemiums work best in a competitive market where you want to build brand recognition. They also work well as a lead generation tool. Premiums, on the other hand, work best if your goal is to get more upfront payments for your product or service. But again, test them.
The secret is to offer something at high perceived value and low cost to you
The most important thing when offering a premium ' and especially a freemium ' is to offer something that's inexpensive for you, but is still valuable to your prospects. Otherwise, the offer is useless.
Examples include inexpensive electronics made overseas or the free vacation offers (which has a perceived value of more than $200 but only cost about $10 or $15). The $50 gas cards and $500 worth of groceries on a card also have a high perceived value at a relatively low cost. These are things in the golden quadrant in the upper left corner of the matrix to the left.