How about some "Marketing Magic?"

Remember, there are different types of magic… the awe-inspiring, breath-taking magic of Houdini and “Metamorphosis” – and the more basic “pick a card, any card” magic. Let’s start with a little pick-a-card magic for today.

Do you offer a discount? Does your offer include “buy today and save 50%” copy? Why? Or more correctly, why are you not offering a mail-in rebate?

Just to jog your memory…

The mail-in rebate (MIR) is the most common form of rebate. An MIR entitles the buyer to mail in a coupon, a receipt and/or a barcode in order to receive a check for a particular amount, depending on the particular product, time, and often place of purchase.

The best rebate programs offer a payout option of a paper check. (That’s because everyone, including your customers, are happiest when they have money in their hands!)

Here are eight great reasons to employ a rebate program:

1. The information your customer gives you on the rebate form, such as name, address, method of payment, really helps you data mining – and that helps you understand you customer’s habits.

2. Customers notice price increases and react negatively. Rebates offer you the benefit of giving customers a temporary discount on an item, to stimulate sales, while maintaining current price points.

3. Rebates let you "price protect" certain product lines by being selective in which products or brands to discount. Move some product at lower cost while maintaining prices of successful items.

4. During the turnaround time (between the payment of the order and the payment of the rebate) you can earn interest on the money.

5. Not all buyers will meet the criteria to receive the rebate. You can require (from the customer) the original UPC barcode, or a receipt/proof of purchase, and additional information, which a buyer may forget to include when redeeming the rebate. (Add other caveats to the rebate as well, such as the redemption postmarked by a certain date.) But be careful: studies indicate a shorter redemption date may increase the number of rebate requests!

6. If you are a new company looking to break into a market, you can offer substantial rebate savings on their new product as a means of capturing a customer's attention.

7. A national marketing firm estimated that in 2005 consumers redeemed $486.5 million worth of rebates. The redemption rates averaged 21.1% when calculated as a percentage of total sales!

8. Not all buyers remember to mail in the coupons, a phenomenon known as breakage, or the shoebox effect. Slippage is the phenomenon when a consumer has their rebate fulfilled but they lose or forget to cash the check. Some rebate companies could tout a higher "redemption rate" including the breakage, while not calculating the potential slippage of un-cashed checks.

Let’s look at a few more redemption statistics:

· BusinessWeek estimated a return rate of 60%. Some estimates have been as low as 2%. For example, nearly half of 100,000 new TiVo subscribers in 2005 did not redeem their $100 rebates, allowing the company to keep $5,000,000 in additional profit.

· PC Data in Reston, VA estimates between "10 and 30 percent redemption rates."

· A representative from The Marco Corporation stated, “In some cases, we do

have redemption programs that go as high as forty to fifty per cent, but generally it’s about one to five per cent.”

But when was the last time you included a simple rebate in your promotion (on-line or off-line)?

Instead of just offering a discount, or a BOGO (Buy One Get One) offer, go for the rebate. You look great and you make your customers happier (and who doesn’t want happier customers?)

Peter T. Britton,

Resultant

PTB@novuscom.net