Pricing and Discount Fundamentals

Pricing and Discount Fundamentals


Most often we get asked,  “What kind of offer should I do?”

Well, that is a big question. First, Understand the role of price. Price is the value exchanged for products in marketing transactions. Price is a key element in the marketing mix because it relates directly to the generation of total revenue. The profit factor can be determined mathematically by multiplying price by quantity sold to get total revenue and then subtracting total costs. Price is the marketing mix variable that usually can be adjusted quickly and easily to respond to changes in the external environment.

Identify the characteristics of price and non-price competition.

Price competition emphasizes price as the major product differential. Prices fluctuate frequently, and price competition among sellers is aggressive. Non-price competition emphasizes product differentiation through distinctive features, services, product quality, or other factors. Establish brand loyalty by using non-price competition.

Coupons and Cents-Off Offers.

Coupons reduce a product’s price and are used to prompt customers to try new or established products, increase sales volume quickly, attract repeat purchasers, or introduce new package sizes or features. Savings may be deducted from the purchase price or offered as cash. Research indicates that coupons are most effective when a small face-value coupon is used in conjunction with a lower product price available for all consumers. Coupons are the most widely used consumer sales promotion technique.

Refunds and Rebates.

With money refunds, consumers submit proof of purchase and are mailed a specific amount of money. Usually manufacturers demand multiple product purchases before consumers qualify for refunds. With rebates, the customer is sent a specified amount of money for making a single purchase. Money refunds, used primarily to promote trial use of a product, are relatively low in cost, they sometimes generate a low response rate and have limited impact on sales.

Frequent-User Incentives.

Do you have a “Sub Club Card” from Subway? Many businesses develop incentive programs to reward customers who engage in repeat business. Major airlines offer frequent-flier programs, coffee shops offer punch cards. Frequent-user incentives foster customer loyalty to a specific company or group of cooperating companies.

Point-of-Purchase Materials and Demonstrations.

Include outdoor signs, window displays, counter pieces, display racks, and self-service cartons. Innovations in P-O-P displays include sniff-teasers, samples, and may even play music! P-O-P displays give off a product’s aroma in the store as consumers walk within a radius of four feet, and computerized interactive displays.

Personal Selling and Sales Promotion.

Titleist provides logoed golf balls for firms that want to provide loyalty to a brand name. Items with company logos on them is a continual billboard of self advertising.

Free Samples and Premiums.

Marketers use free samples to stimulate trial of a product, increase sales volume in the early stages of a product’s life cycle, and obtain desirable distribution. Sampling is the most expensive sales promotion method because production and distribution—at local events, by mail or door-to-door delivery, on-line, in stores, and on packages—entail high costs.

Consumer Games, Contests, and Sweepstakes.

In consumer contests and games, individuals compete for prizes based on analytical or creative skills. Entrants in a consumer sweepstakes submit their names for inclusion in a drawing for prizes.

Trade Sales Promotion Methods.

To encourage resellers, especially retailers, to carry their products and to promote them effectively, producers use sales promotion methods. Trade sales promotion methods stimulate wholesalers and retailers to carry a producer’s products and market those products more aggressively.

Trade Allowances.

Many manufacturers offer trade allowances to encourage resellers to carry a product or stock more of it. One such trade allowance is a buying allowance, which is a temporary price reduction offered to resellers for purchasing specified quantities of a product.

Cooperative Advertising and Dealer Listings.

Cooperative advertising is an arrangement whereby a manufacturer agrees to pay a certain amount of a retailer’s media costs for advertising the manufacturer’s products.

Sales Contests.

A sales contest is designed to motivate distributors, retailers, and sales personnel by recognizing outstanding achievements.

Free Merchandise and Gifts.

Manufacturers sometimes offer free merchandise to resellers that purchase a stated quantity of products. Occasionally, free merchandise is used as payment for allowances provided through other sales promotion methods.

Building the Main Street of the Past Into Your Modern Business


For many of us, the idea of the small town is iconic. For some, it embodies the place where they grew up or currently live. For others, it represents more of an ideal than anything based on personal experience. In any case, quintessential small town life presents a business model we all can learn from.Main StreetEvery small town, it seems, has a Main Street — a place dotted with mom-and-pop shops, each with its own inviting display, encouraging people to stop in and check out their wares. The bakery or candy shop often has samples out front for people to stop by and taste as they walk down the street. The neighborhood grocer knows the patrons by name and has a variety of appealing fruits and vegetables right out front. The local cafe offers places for people to sit outside and engage with others as they pass by.

The ‘Main Street’ of the Internet

For many people, this real life type of Main Street is just a figment of their imagination or a distant memory of days gone by. Their reality is comprised more of national brands and busy shopping malls. What marketers have increasingly found, however, is that customers find it more appealing to shop on websites that contain many of the popular features of these once commonplace Main Streets than websites that don’t. Even though the world has become more interconnected and people are increasingly more accustomed to the hustle of city life, the desire to feel welcomed into a place of business and valued as a customer never goes away. 

What businesses can learn from the mom-and-pop shops of the past

The secrets to success for the shops of Main Street continue to work today. The stores of Main Street made every customer feel welcome to stop and check out their place of business right from the street. These welcoming shops would also offer a variety of samples customers could try in order to see if a particular product would work for them.

As you think about your own company, take a close look at your website, physical place of business, and advertising materials. Are each of these designed to encourage customers to see what you have to offer? Do you offer customers incentives such as discounts, free samples, or rewards for using your business?

One of biggest lessons that modern companies can learn from the past, however, is personalization. Main Street business owners took the time to learn the names of their customers and greet them personally when they entered the shop. You should strive to accomplish a similar effect online and off.

Start by keeping careful records of how customers use your website. Responsive sites that can remember what a customer looked at the last time they visited or what they bought in the past tend to encourage more repeat business than those that don’t.

Train your in-store representatives to remember what customers say when they enter the shop to provide them with an individualized experience.

Such personalization can even extend to your marketing materials. For example, consider using variable data to personalize your direct mail campaigns and targeted mailings to reach niche buyers who may be interested in the products or services you sell.

While the ultimate Main Street might no longer exist for many people, the desire for finding welcoming shops that remember our names has not gone away. Incorporating as many of these values as possible into your marketing efforts can impress customers and help build relationships around trust and loyalty.

We can help you find ways to express these values in your marketing materials, so reach out to us today!

How Premiums Work Better Than Coupons and Discounts

What is a Premium?

A premium is anything of value that you offer a prospect or client in exchange for taking an action that you direct them to. This could include an incentive or a gift.

The right premium could encourage someone who might otherwise set aside the mail to act now instead of later (or not at all). This works especially well when there is a limited quantity available or you state a deadline for responding. An example of this would be offering a Starbucks coffee gift card in exchange for filling out a survey or submitting an honest testimonial.

how to decide on what offer to offer!

how to decide on what offer to offer!

Premiums can also be used to generate demand for your products and services, to reward fast response, or to boost the size of an order.

Why Does a Premium Work?

Everyone wants something for free, but they also want to reward those who rewarded them.

Premiums work because of the “rule of reciprocation” made famous by Robert Cialdini, a psychologist and author of Influence: The Psychology of Persuasion. According to Cialdini, “We are obligated to give back to others the forms of behavior that they have given to us. Essentially, thou shalt not take without giving in return.”

How Premiums Improve Direct Mail Response?

Any direct mail campaign includes the following components:

  1. The Mailing List
  2. The Design
  3. The Copy
  4. The Offer
  5. The Print & Packaging
  6. Timing & Delivery

How do premiums fit into this? They are part of the offer.

Most premiums have low costs but a high perceived value. Although premiums add to the cost of a mailing, the gain in response and the attention they provide outweigh the additional expenses.

Premiums can be delivered in several ways, depending on the goals of the campaign. The premium can be delivered as a front-end offer, when you want your mailing to stand out. It can also be delivered as a bonus or incentive, if the recipient responds to your call to action. In this case, a photo or graphic image of the premium would work well.

Examples of premiums can be found in daily life outside of direct mailers. The McDonald’s Happy Meal is often purchased because of the toy premium inside rather than the food. Many cereal boxes are sold because of the trinkets inside as well. Premiums are often used at sporting events when the ticket attendant hands out a calendar or a bobble head to the first 1,000 attendees. Premiums are also found in many non-profit mailers, where a free set of mailing labels with your return address printed on them are included, along with the request for a donation. Our society at large is conditioned to appreciate premiums.

Premiums can also be used to encourage your existing clients to give you referrals and testimonials. They can be used as great reminders to motivate your best clients to help you get more customers.

But will premiums work for you?

Remember that your premium is only one part of the direct mail package. You must still follow best practices and essential principles of direct mail. Although a premium can improve results, premiums alone do not guarantee success.

Just because premiums work for many companies does not guarantee that they will work for you. Test different premium offers, and keep careful records of your costs and sales (or leads) generated.

Although the recipients are not obligated to respond, history, case studies, and human psychology indicate that offering premiums can significantly boost your response rates. Direct mail + a premium can be a winning combination to boost business for your company.

Appreciation Marketing

Everyone likes to feel appreciated. That’s especially true when it comes to your customers. Appreciation marketing can help you develop lasting relationships and make customers think of you the next time they’re ready to purchase.

Print & Copy Factory Thank yous and that'a boys

Here are a few ways to show customers your appreciation:

  • Send a hand-written thank you card every time someone does business with you.  Larry and I remember purchasing a suitcase at a smaller store in the mall years ago, and they sent us a thank you card, for a suitcase no less!  We thought that was pretty darn cool, so Print & Copy Factory started sending thank you cards to our customers.
  • Reward repeat customers with special deals, exclusive discounts, and coupons. You should be tracking what your customers are purchasing from you, and use this to sell add-on services or products as a form of up-selling.
  • Send holiday (we have a large selection), birthday, or anniversary cards. These simple, pressure-free greetings will help increase top-of-mind awareness throughout the year.
  • Offer useful information and helpful tips to educate customers and promote your expertise via blogs, newsletters, social media, and the like.
  • Invite customers to an exclusive appreciation event designed for existing customers.
  • Collaborate with non-competitive local businesses to create a coupon book or discount program across a range of industries – check with the local chambers, some of them have welcome packets that they give to new members that include your marketing items – I know the Ferndale Chamber has one).
  • Create a customer loyalty program, such as a loyalty punch card, upgrade offers, or cash rewards after reaching a specific purchase level.
  • Respond quickly to customer questions or requests, and follow-up to be sure all questions were thoroughly answered.
  • Ask for customer feedback in the form of surveys and response cards. (we also do this, using a pre-paid postcard, encouraging the correspondence)
  • Send out a voucher or postcard for a free gift, redeemable at your business.
  • Send out re-order cards.
  • Send discounts and coupons “just because” to thank customers for their business.
  • Include statement stuffer coupons with bills not only as a thank you but also to encourage customers to make additional future purchases.
  • Give away free-bees, such as coffee mugs, pens or even hats with your logo on them, they stay with the customer longer and help you advertise too!

If you’re interested in any of the above print marketing ideas or need help brainstorming the perfect promo to show customers your appreciation, our creative team here at Print & Copy Factory is eager to help. Give us a call today!

Turn Customers into Salespeople

One of the most cost effective ways to grow your business is by letting your customers do the selling for you via referrals. Here are a few tips on how to grow your business through customer referrals:

  • Create a customer referral program. For example, provide custom printed referral cards that provide an exclusive discount to new customers. Also reward existing customers based on how many new customers they recruit.
  • Educate your customers with the information they need to market your products. Make sure your customers have access to adequate print literature, website links, blogs, newsletters, and other materials relevant to your company.
  • Differentiate your business based on a key feature or benefit you offer that your competition doesn’t, such as free shipping or low-price guarantees. These differentiators make great selling points to entice new customers.
  • Ask for referrals. If you’ve just talked to a happy customer who complimented your business, ask if they would be willing to refer others on your behalf.
  • Popularity sells. If your business has a very high number of referrals, promote the fact on your marketing materials and website. For example, “More than half of our new customers are derived from customer referrals” would make a great tagline somewhere on your website or in your product literature.
  • Ask new customers how they learned about your business. It’s always exciting to see real-world results from your marketing efforts, especially from word-of-mouth.
  • Include a statement on the back of your brochures, business cards, and other collateral that encourages customer referrals. “A customer referral is the finest compliment we can receive” would be a good example.

Don’t forget to show your sincere appreciation to customers who refer others to your business. A handwritten thank you note is a great way to follow-up, and that one extra step will reinforce the reasons why they recommended you in the first place.

Tips to Convey Quality

Tips to Convey Quality

While the quality of your products and services is ultimately measured by customer satisfaction, here are a few tips on how to convey quality in everything your business does:

    • Provide a no-hassle satisfaction guarantee…and stand behind it.
    • Offer a longer or more inclusive warranty than your competition does. This will show customers how committed you are to your products.
    • Post customer reviews and testimonials to encourage readers to see what others are saying about your products and services.
    • Offer a risk-free evaluation of your products to allow customers to experience your outstanding products and customer support firsthand.
    • Create a customer referral program that encourages and rewards customers to do the selling for you.
    • Distribute professional marketing materials such as letterhead, envelopes, business cards, brochures, flyers, and product catalogs.
    • Use only high-resolution, quality images. If an image isn’t up to par, don’t use it.
    • Include your contact information on all materials, including your physical address, phone numbers, and email address. This will show customers you are easily accessible.
  • Choose words carefully when marketing your products. Instead of using the word “quality,” use words that imply quality, such as “premium.” Instead of “inexpensive,” use the word “value.”

One of the easiest ways to show customers your dedication to customer satisfaction is by following Henry Ford’s famous words of advice: “Quality means doing it right when no one is looking.”

Hot Summer Marketing Ideas to Think About This Spring

For many businesses, the weather may heat up, but sales cool off in the summer. While summer may be a few months away, it’s never too early to start thinking about a summer marketing plan. Here are a few creative ways to stay on the minds of your customers this summer:
Plan a customer appreciation lunch or ice cream social to stay in touch with customers and prospects during your slow season. Fire up the grill, set up some tents, and get ready to greet some new and familiar faces.

Encourage customers to sign up to win something related to summer fun (ranging from something as simple as a large cooler filled with goodies for a picnic to something as extravagant as a boat or paid getaway to a fun summer destination).
Offer value add-ons to summer purchases, such as “Receive XYZ free with a $40+ purchase!”

Surprise loyal customers with a summer-related lumpy mailer campaign that includes a promotional gift such as a sleeve of branded golf balls, a reusable water bottle, a frisbee, sunscreen, lip balm, or a can coolie with a creative note.

Plan a sidewalk sale to draw attention to your storefront and encourage people to check out your sales.

Keep in touch with social media. Offer prizes and discounts for customers who provide input, participate in quizzes, or sign up for contests.

Organize a community-driven goodwill event, such as hosting a toy drive, a blood drive, etc.

Create a forum for customers to share their favorite summer recipes or grilling tips.

Offer free lemonade and cookies daily during the month of July to those who visit your store.

Marketing Takes a Holiday

fun promotions for the winter

If you’re planning a winter getaway or are already thinking about a summer retreat (and really, who among us isn’t thinking about summer already?), here are a few ideas to help you take your marketing with you on the road….

  • Hold a sale. We’ve all seen ads with the idea of “the boss is away, so we’re having a sale” or something to that effect. Have fun with it, and make it memorable.
  • Send postcards. Bring the names and addresses of your top customers with you, and send them postcards from on the road. Or send postcards back to the office, and have your employees post them in a common area where everyone (customers included) can see them.
  • Blog about it. Along those same lines, post regular updates to the company (and/or your personal) blog, with lots of photos and details about the things you’re doing on your trip.
  • Encourage involvement. Ask your customers to send you updates when they go on vacation, then post them to a display at work or as guest posts on your blog.
  • Have some fun. Bring along an item related to your company, such as a shopping bag or mug with your logo on it, or a fun object like a garden gnome or stuffed animal wearing a company shirt. Then take pictures of the object sitting in front of popular tourist attractions.
  • Make a promotion/game out of it by encouraging your customers to do the same thing on their trips or by having people guess where these photos of your “mascot” were taken. If you have your customers take their own photos, supply them with the “mascot” to take with them on their trip, and offer an incentive for participating (such as $x off their next purchase for each photo they provide).