A Marketing Gambit That Almost Never Fails

“The basic rule of free enterprise: You must give in order to get.” – Scott Alexander

In the late 1970s, when I worked at my first marketing job 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. The first time I saw it, my immediate thought was, “Who would want this cheap crap?” 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.

We once sent each of our 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 cufflinks. 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 doctors to symposium on diseases that were treated by his clients’ products. To see whether he could increase attendance, he decided to offer a free pocket diary to each doctor who accepted 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, a free information premium — a booklet, a white paper, a special report — can perform well. If your prospect is not a reader, use a merchandise premium. The possibilities are almost limitless: coffee mugs, T-shirts, golf caps, tape measures, mini-tool sets, pens, key chains, luggage tags, and calculators, just for starters.

The cost of the premium may depend in part on what you can afford to spend to acquire a new customer. But in most instances, we’re looking at premiums that cost $5 or less. To improve your response rates for a high-end product, you need to offer a premium that has a high perceived value. A CD-ROM, for example, 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, I remember a promo, done for an expensive publication, that bombed because they offered a premium with a very low perceived value: a deck of playing cards with the famous editor’s photo on them. (Everybody knows that a deck of cards costs about 89 cents at the drugstore.)

In addition to high perceived value, look for premiums that are unique. The Sovereign Society, a newsletter on offshore investing, had great success offering each new subscriber his own Swiss bank account. And Advertising Age magazine did very well with a personalized coffee mug that had 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 Ad Age.

(Ed. Note: Bob Bly is the editor of Mailbox Millionaire, ETR’s program to help you start your own successful direct-mail business. For information, click on http://www.agora-inc.com/reports/700SCBMO/W700E418/.)