Direct Mail in the Digital Age. Lin Grensing-Pophal
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a discount can be structured in a number of ways, such as “Buy one, get one free,” or “Half-price sale.” Be careful, though, that you don’t use discounts too often. There are two reasons for this:
Offering discounts makes a statement about your product. A product which can never be purchased at a discount acquires a certain status.
Customers can become accustomed to receiving discounts from you if you do it too regularly. They may come to look at your discounted prices as your “regular” prices and the effectiveness of the offers will wane.
• Quantity discounts. When creating quantity discounts, carefully consider where to place your price breaks. Don’t make the first break too large. You want to choose a point where it will be easy for the customer to say: “Oh, what the heck, if I add $5 more to my order, I’ll get $x off.” Effective quantity discounts can help you to dramatically increase your average order size. For instance, “Take a 10% discount when you buy 10, a 20% discount when you buy 20.” “On orders more than $100, we’ll take $10 off.” “Call about quantity discounts for bulk purchases.”
• Cost per week. You’ve probably seen this technique often with advertisements for magazines: “Only 43 cents a week will bring you timely issues of Our Magazine!” Breaking down the price of your product can be especially effective if you’re selling a high-ticket item with a price that might put off prospects. Framing it in a weekly or even monthly time line can make the purchase decision less risky.
• Free examination. The easier you can make it for your customer to order, the more likely you are to get the order. How much easier could it be than to simply check a box and toss a business reply card into the mail? If you decide to use this technique, monitor your returns and all the costs associated with those returns and the order processing very carefully. With a strong product, this technique can work very well. With a marginal product, you may find that the costs of handling returns (and your final back-end results) don’t justify a “send no money now” offer. Note that the final back-end results are the overall results of the campaign after returns have been taken into consideration. In other words, you can’t just consider the overall number of orders that have been received; you also need to take into consideration any returns so that you have an accurate reflection of the results.
• Free trial. The free trial offer is a good way to get your product into the hands of your customers, and because it’s “free,” response can be increased. For example, “Try our product for 30 days. If it doesn’t do everything we say it will do, send it back. You’ll owe nothing.” As with the free examination offer mentioned in the point above, back-end results must be monitored very carefully.
• Money-back guarantee. Minimize risks for your customers by offering a generous guarantee — ordering through the mail, or online, can be risky. The customers haven’t seen the product and have only your copy and graphics, perhaps a photo, to judge the value of their purchase. If they aren’t given a guarantee of their satisfaction, they may decide that the risk of ordering is too high. In direct mail, guarantees are a must. They are by far the most important part of your offer. Don’t neglect to include one.
• Special offers for new customers. We’ve all been on the receiving end of an offer inviting us to become a new customer of some business or other and promising us a great discount or enticing bonus to do so. That’s great if we’re a new customer. But what if we’re an existing customer? What’s in it for us? While offers like this can certainly be effective in attracting new business, marketers need to be cautious that in the process of wooing new customers they don’t inadvertently upset their existing loyal customers.
• Last chance offers. A last chance offer attempts to prompt a purchase from respondents who may be motivated by the thought that they won’t have another opportunity to buy. This can be effective, but only if the last chance is real. We can all think of organizations that use the “going out of business” sale over and over again. Eventually, the effectiveness of this technique, and the credibility of the organization, will suffer.
• Varying payment options. Marketers may use a variety of payment options to influence the purchase decision. By offering quantity discounts, for instance, marketers may be able to sell more of a particular product than they might have sold at a single unit price. Consumers will feel as though they are getting a special deal and may be prompted to add on “just one more” item. This concept is quite common online, where retailers will offer free shipping for purchases over a certain dollar amount. Consumers may spend more than they might have otherwise to take advantage of the free shipping — even when the shipping costs may be less than the additional purchase.
Which offer will work best for you? It depends on a lot of things — your product and your market, for starters. Direct mail is once again beneficial here because we can test offers to determine what might work best for us.
Pew Research Center’s Home Broadband 2010 survey: www.pewinternet.org/~/media//Files/Reports/2010/Home broadband 2010.pdf. Accessed March 18, 2011.
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