Reward Good Customers
Good Catalog Co., a Portland, Oreg., cataloger with $16 million in 1995 sales, sends customers a gift every time they spend $250 or more on a single order. Although it's called the Really Outrageous Gift Program, owner Barb Todd's system is hardly excessive. She selects gifts from leftover inventory or product samples and ships them with a personalized letter. The average gift has a $50 retail value but is worth only about $15 at the warehouse sale, at which Todd would otherwise sell it. The freebie works wonders, according to Todd. Within a few months of starting the program, she says, the gift recipients' response rates to mailings rose from 5% to 25%, while their average purchase rose from $100 to $300.