Getting consumers to `act now’

Premiums and incentives have long been accepted by advertising executives for having quick-hit tactical strengths, but the question arises: do they erode brand image and loyalty?In this special report, eight direct marketing experts give their perspectives on the issue.Among other things,...

Premiums and incentives have long been accepted by advertising executives for having quick-hit tactical strengths, but the question arises: do they erode brand image and loyalty?

In this special report, eight direct marketing experts give their perspectives on the issue.

Among other things, they explain how to determine the choice and value of a premium or incentive and how to build a promotion congruent with the brand. The report continues to page B-16.

Even novice direct marketers know that the list is the number one factor in driving response.

But what’s number two? The envelope design? Letter copy? Reply device?

They are all important, but the classic number two response driver is the offer – that something extra over and above the basic product that encourages consumers to act now.

Good offers overcome natural human inertia to generate incremental response.

Really good ones get immediate results and help you build the brand.

Offers come in all shapes and sizes, from free trials, to free gifts, to price deals, to easy credit terms, to mind-bending sweepstakes.

Here are a few options available and some ideas on how to separate the winners from the losers.

- free gift for responding

- free gift whether you respond

- pay no interest or reduced interest

- sweepstakes

- special price discount

- points

- free trial

- pay over time

- special price break

- two-for-one

- mystery gift

- money-back (or double-your-money-back) guarantee

- discount or gift for quantity purchase

- status offer (special handling of your response)

- charitable donation in your name

Control Free Free Free Champagne

(No Offer) Glasses Key Chain Stopper

Response index 100 327 157 179

Cost per

response index 100 186 81 90

There are a number of things one should keep in mind when considering the options.

1. It doesn’t have to be big or complicated.

An Ogilvy & Mather Direct client in France just achieved a response rate of over 40% in a business-to-business questionnaire mailing.

The offer? A unique, collectible plastic pin which cost less than 30 cents a unit.

Our London office achieved a similar result in response to a free offer for a 25-cent roadmap.

2. Watch for offer burnout.

If you find a winner, always keep testing fresh new alternatives because some offers have a short but glorious life span.

Some years ago, American Express tested a branded calculator offer to boost its direct mail card acquisition response.

The test and early roll out were excellent – lifts of 50% and more to a $3 or $4 premium.

But within a few months, the offer’s uniqueness and pulling power were burned out. In subsequent tests, the calculator offer actually depressed response compared to no offer at all.

3. Balance image and response.

On image-sensitive brands, the offer has the dual responsibility of building response and respecting brand image.

On issues of what’s ‘on strategy’ or ‘off strategy’, there’s no substitute for good judgment.

However, before rejecting a controversial offer, it’s smart to test to find out what you’re really walking away from.

Given the offer variable’s impact on response, you may find yourself lopping 20, 30 or even 50% off your response rates over a nuance of image.

Conversely, you might find that the offending item doesn’t have its reputed response power any more and isn’t worth taking the image risk.

4. Analyze effectiveness and efficiency.

On a recent direct marketing program for Mumm Champagne, we worked with the client to source three strategically-compatible premiums to help lift response: champagne flutes, a key chain and a champagne stopper.

We conducted a four-way in-market test, pitting these three premiums against an identical package with no extra offer (see chart, previous page).

The results have been adjusted slightly for confidentiality reasons.

On a pure response basis, the champagne flute offer was the decisive winner, but on a cost-per-response basis, the key chain option came out ahead.

If there was a small, fixed universe of prospects, the marketer may elect to go with the champagne flute offer to maximize immediate response.

In most cases, the marketer would go with the most efficient cost-per-response and invest the efficiencies in beefing up quantities.

5. Don’t reject sweeps as an option.

What about the much-maligned sweepstakes offer? Does it really work?

Sweepstakes have appeal to marketers because of their fixed liability and relative ease of execution. And they continue to work with surprising consistency.

Cash and travel are proven performers.

In the past year, we’ve seen them work superbly in categories from financial services to publishing to agriculture.

It’s quite possible to turbo-charge a marketing program with a simple, motivating, strategically compatible offer.

And it will have a lot more impact on sales than re-cranking a monthly forecast or sweating over revision number 17 of that brochure copy.

Brian Fetherstonhaugh is president of Toronto-based agency Ogilvy & Mather Direct.