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A Solution to Leftover Custom Premiums
The challenge with this kind of promotion,
however, is determining the quantity of the premium items
needed for program fulfillment, since response rates can
vary widely from offer to offer.
On the other hand, if you are too optimistic
in your estimates and the redemption rate falls short of
projections, you may end up with a warehouse full of leftover
premiums.
For this reason, many premium managers are
reluctant to venture into a mail-in consumer premium. To
address this concern, Milmour has developed a rather unique
solution, notes Kevin Hess, National Sales Manager for Milmour
Products.
To determine the optimum order quantity for
our client's offers, we take into consideration the brand,
the type of offer, the number of exposures of the offer,
the price point, and the uniqueness of the premium offer.
Together with the client we determine the probable rate
of redemption, based on our 40 years of experience and the
client's promotional history.
Unlike other custom premium suppliers, Milmour
offers the following options for in-mail promotions:
- Prior to the first FSI drop date, Milmour
produces only 50% of the quantity ordered. Additional
quantities of the premium are then produced in direct
response to actual redemption rates.
- If, at the end of the promotion, redemption
falls short of the initial quantity ordered, the brand
has the option of either finishing the production run
or reducing the final order quantity to match redemptions.
In this case, the brand pays for only a fraction of the
original price for each piece they elect not to produce.
This means that brands can finally offer custom
premiums in large enough quantities to achieve the piece
part price they need, without risking a warehouse full of
unneeded custom premiums at the end of the promotion.
"Because we share in the risk,"
notes Hess, "there is absolutely no benefit for Milmour
to encourage our clients to over-order or to build a promotion
around a bad premium idea. As a result, more brands are
willing to undertake custom premium offers than if we weren't
both at risk.
"We introduced this concept a year
ago, not knowing whether it would be meaningful to the marketplace
or not. Judging by the initial response," states Hess,
"I think we have developed a promotion strategy whose
time has definitely come!"
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