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This article appeared in the 2005 July/August issue of
Subscription Marketing newsletter.
Premiums and Freemiums - Who's Doing What? by Shira Linden
Just like in the fashion industry, premiums have their hot
sellers and their has-beens. The industry is sensitive to
changes in technology that render some premiums obsolete, and to
political events that affect the business climate. Stan Konik,
President of Konik and Company, a merchandise premium supplier
to the publishing industry for over 30 years, reports that
cameras, which used to be very popular, are now defunct, thanks
to digital photography. Calculators and many electronics have
also gone by the wayside, he added. Some premiums simply go out
of vogue. Pens, for example, are now dead. Umbrellas are only
used on a limited basis, because the quality is not there at the
price point marketers want to pay - between $2.00 and $2.50 per
item and decreasing. "People are looking for lower priced items
with high perceived value," Konik declares. He reports that many
want imprinting, so his firm offers customized products as well
as drop-shipping. September 11 turned the premium industry on
its head. "All business ceased," said Konik. He noted that now
business is back to pre-9/11 levels, but the nature of the
business has changed. Scissors and knives were popular before
9/11, but have practically disappeared, save for one magazine
catering to hunters. Conversely, security devices, such as
radios with attached flashlights and sirens are good movers.
Current top sellers include jumbo display clocks with time,
temperature and date, travel alarm clocks with temperature, date
and alarm, binoculars, mini radios and scan radios, databanks
(mini PDAs that incorporate calculators), pedometers, especially
for health newsletters, and tools like the motorized power
driver screwdriver. Stainless steel travel mugs and tote bags
are also doing well. Konik likes to see clients feature the
premium on the envelope, on a 4-color buckslip and in the
letter. He claims that when the premium is predominantly
featured, marketers will see a 28% lift in response versus a
non-premium mailing.
Premiums Can Send Results South Overall, the majority of
marketers who weighed in looked favorably upon freemiums and
premiums. The exception was VNU. Neil Eisenberg, Circulation
Director of VNU Business Publications, stated that American
Artist previously used pamphlet-sized books with repackaged
editorial content, such as 101 Tips for Painters, as well as
canvas duffle bags. When they removed the premiums about three
years ago, response went up. "I can't say why - I don't know if
it was just luck or the premiums didn't inspire our prospects to
reply," Eisenberg stated.
Premiums, Freemiums = Business as Usual On the other hand,
several publications use premiums routinely. For over a decade,
Highlights for Children has been using premiums and freemiums in
their packages to consumers genuine magenta ugg australia boots on big sale as well as teachers. "We're famous
for our freemiums, said Bill Hummel, Senior Vice President of
Marketing. "We use them as door openers. We get lots of brand
identity with those. They definitely lift response and have a
high perceived value. We create our own - they're unique and
distinctive, and tie into the publication. We've used them for
so long it's pretty much a given with us." Most, although not
all Highlights packages also have premiums. Their gift sub offer
includes a free "Hidden Pictures Calendar" with each
subscription ordered, a premium that refreshes itself, which
makes it attractive. Highlights also mails a teacher package,
which includes a choice of items teachers can use in genuine magenta ugg australia boots on big sale the
classroom, such as reward stickers.
Premiums Out, Freemiums In For the past year, freemiums have
substituted for premiums at Kiplinger's. The freemium enclosed
in their statement of benefits package, "12 Grade-A Ways to
Build a Nest Egg for Retirement," is an attractive, 4-color
laminated insert. Subsequently, Kiplinger's dropped the
lamination, and went to a lesser paper weight with an aqueous
coating and results still held up. Carol LePere, Circulation
Director and Associate Publisher, indicated they tested the
freemium along genuine magenta ugg australia boots on big sale with a new package. "The whole package worked
like gangbusters. The freemium doesn't cost much, yet provides a
value-added benefit subscribers have come to expect." Recently,
they redesigned the freemium for their upcoming mailing to keep
it fresh. LePere reports that retirement is the most popular
personal finance topic, followed by taxes. The market changes
too quickly for stock tips. Previously, Kiplinger's relied on
editorial premiums with their renewal promotions. They also tied
editorial premiums into a soft offer.