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Marketing lessons from dog biscuits

March 31st, 2013 by Bob Bly

When my kids were little, they would crack themselves up by
preparing strange concoctions in the kitchen, feeding them to
me, and watching me grimace.

My eyes were closed, so luckily, I never knew what I was about
to ingest.

One time, when it was dog biscuits, I was shocked at how
terrible they tasted, despite pictures and copy on the box that
made them look like a gourmet meal at a 5-star restaurant.

I pondered that dogs were willing to do a lot – come, sit,
fetch, roll over, play dead – for really small rewards.

And then it gradually dawned on me that people are the same way
– a fact you can use to good advantage in your marketing.

Example: back in the 80s, a friend of mine worked at a medical
ad agency.

The agency specialized in creating direct mail (DM) that invited
doctors to medical symposia. These seminars were supposed to
deliver content on the treatment of a specific disease, but the
bottom-line goal was to promote the sponsor’s drug.

My friend did an A/B split test with a DM invitation to a
symposium. The only difference between the test cells was that A
offered a free pocket diary as a bonus gift to doctors who
attended and B did not offer the premium.

When the agency mailed the test, mailing A offering the free
pocket diary generated 6 times more response than mailing B
without it. We were all amazed because it was a cheap little
pocket diary that cost the client about a dollar each, and the
audience was doctors earning six-figure incomes.

“Don’t be amazed,” the client told us. “When doctors at our
symposia ask our staff where the pay phone is, nine times out of
ten they also ask us if we have a quarter they can use to make a
call!” (Remember pay phones?)

In my first job out of college, I worked in the marketing
department for Westinghouse Defense, whose major client was the
U.S. military. We were tasked with maintaining a supply cabinet
full of promotional items for Westinghouse salespeople to give
to the high-ranking military personnel who were our prospects.

The most in-demand item was Westinghouse golf tees – plain white
tees imprinted with the famous “circle W” Westinghouse logo in
blue. The salespeople and their customers were so crazy for free
golf tees we could not keep them in stock.

People, even wealthy ones, are eager to get free stuff and
discounts. Recently a new bank opened in the upper-class town
next to ours. They did the usual free balloons and hot dogs for
the grand opening, and their parking lot was packed to
overflowing. I love hot dogs, but I’m not going to fight for a
parking space to get a free one.

Any free gift given with inquiry or order is called a “premium.”
A “freemium” is a free gift enclosed with the mailing; e.g.,
rosary beads or a crucifix enclosed with a Catholic charities
fundraising letter.

A “keeper” is a premium the consumer keeps even if he returns
the product for a refund; e.g. The Folio Society offers a free
2-volume book set The Greek Myths when you order the Shorter
Oxford English Dictionary for $19.95.

They ship the whole thing when you mail the return coupon from
their ad; no payment with order is required. If you wish, you
can just pack up and return the Dictionary when it arrives,
pulling out and keeping The Greek Myths as a totally free gift.

I know: I’ve done it. A consumer who orders just to get the
keeper premium and then returns the product is known as a
“premium bandit.” Some direct marketers identify premium bandits
with a code attached to the record in their database, and do not
fulfill the premium bandit’s requests for keeper premiums.

Premium bandits are not actually thieves because all we are
doing is taking advantage of an offer the marketer willingly
makes.

The marketer knows in advance that a small percentage of orders
will be from premium bandits, and this is part of their cost of
doing business. “No biggish,” as the kids say.

I can also tell you that on more than one occasion, I was
planning just on keeping the keeper premium, but when I saw the
product, I liked it so much that I changed my mind and paid the
invoice.

The premiums that work best (a) have a high perceived value, (b)
are unique, and (c) are relevant to the product.

A great example is Gevalia Coffee giving away a beautiful
high-quality coffee maker (I know; we have two) when you signed
up for monthly shipments of gourmet flavored coffee. We ordered
to get the coffee maker, but the flavors were so good we kept
our subscription for a few months, which is what Gevalia was
banking on.

Action step: think about what items would make good premiums
complementing your offers. Source these items, incorporate them
into your offer copy, and measure the change in response rate
vs. the same offer with no premium.

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This entry was posted on Sunday, March 31st, 2013 at 2:12 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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