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NMOA Direct Marketing Article
The Power of Premiums
By Bob Bly

In the late 70s, when I took my first marketing job in Baltimore with Westinghouse, we had a secret marketing weapon we referred to as the "junk cabinet." It was filled with all sorts of advertising specialties - favorites were golf balls and golf tees - all imprinted with the Westinghouse "circle W" logo.

My first thought was, "Who would want this cheap junk?" Turns out, everybody.

Whenever a salesman was giving a high-ranking general a tour of the plant (our biggest customer was the military), he'd invariably ask us for golf balls and tees. It was fascinating to see that the presentation of these items - which only cost a few bucks - thrilled the customers to no end. Once, we sent Westinghouse customers a single cufflink with an invitation promising they would get the matching link when they came to our exhibit at a major trade show. We barely had enough room in our giant booth to accommodate those who came - almost all asking for their free cufflink.

Fast forward a decade or so. I am at a meeting of a marketing club. A man who works for a pharmaceutical advertising agency tells me an amazing story. His agency regularly used direct mail to invite medical doctors to a symposia on diseases treated by his clients' products. To see whether he could increase attendance, he decided to offer a free pocket diary to doctors accepting the invitation. Cost of the item: a buck or so. In an A/B split test, mailings offering the free pocket diary outpulled mailings without the free gift offer 6 to 1!

The conclusion: people love to get free stuff. By offering a small free gift to your prospects, you can significantly boost the response to your marketing efforts at minimal cost.

If your prospect is an information seeker, then a free information premium - a booklet, a white paper, a special report - can perform well.

If your prospect is not a reader, then use a merchandise premium. The possibilities are almost limitless: coffee mugs, golf balls, T-shirts, golf caps, tape measures, mini-tool sets, pens, key chains, luggage tags, and calculators, just for starters.

The cost of the premium depends on what you can afford to spend to acquire a new customer. But in most instances, we're looking for premiums that cost $5 or less. You can improve your response rates by offering a premium that has a perceived value much higher than its cost.

A CD-ROM can be a great premium, because the value of its content - whether images, video, audio, or software - can be extremely high (software sells from $19 to $500 or more per program), but the duplication cost is a few bucks apiece. On the other hand, a publisher did a promo that bombed where they offered a deck of playing cards with the famous editor's photo on them. Perceived value is low: everybody knows a deck of cards costs about 89 cents in CVS.

Advertising Age magazine had a spectacular success offering a personalized coffee mug with the subscriber's name on it. What made it work was that the name was incorporated into a headline, "Bob Bly Wins Marketing Genius Award" - that was laser-printed on a facsimile of the front page of an Ad Age issue on the mug.

In addition to high perceived value, look for premiums that are unique. The Sovereign Society, a newsletter on offshore investing, had great success offering new subscribers an unusual premium: their own Swiss bank account. I advise every direct marketer to offer a premium, whether you're generating sales leads or selling a mail order product. By doing so, you can legitimately work the word "FREE" into your headline or envelope teaser -- and in doing so increase your chances of catching the prospect's attention and getting an inquiry or order.

About the Author:
Bob Bly is an independent copywriter and consultant with more than 25 years of experience in business-to-business, high-tech, industrial, and direct marketing. He has written copy for over 100 clients including Network Solutions, ITT Fluid Technology, Medical Economics, Intuit, Business & Legal Reports, and Brooklyn Union Gas...and has won numerous industry awards. Bob is the author of more than 70 books including The Complete Idiot’s Guide to Direct Marketing (Alpha Books) and The Copywriter’s Handbook (Henry Holt & Co.). Visit:
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