When most people hear the word marketing, they think of evil trickery. They think of ad agencies sitting in large offices thinking about all the ways that they can fool consumers into buying something they don’t want.
And the truth is, those marketers are out there. But marketing can be so much more than that. And new online technology and social media is allowing us to explore new ways to reach consumers who do need our products and services.
But if it’s marketing “tricks” you’re after, here’s the biggest one of all: the mail-in rebate!
Made famous by phone companies and other electronics retailers, the mail-in rebate was created by some brilliant marketer as a way to market a lower price than you actually offered, without lying to consumers.
Here’s how it works:
You build a product. You decide that you can afford to sell that product for a certain price, say $100, and still come out ahead. But you’d like to sell it for $500, why not? So you set the full price at $500, and you create a mail-in rebate for $400. Then you market the product for $100 “after mail-in rebate”. Those words are there for legal reasons, the consumer has already stopped listening when they heard the price was $100.
But here is the dirty little secret that marketers know. Only a percentage of people who buy the product will send in for the rebate. Studies show a wide variety of “redemption rates” (the percentage of people who redeem the rebate vs. the total number of people who purchased the product. But those studies show anywhere from 20%-70% redemption rates, not 100%.
Using the example above, if 50% of people redeem the rebate, you’re actually making $300 per sale.
Not bad for a product you market at $100.