Free Prize Inside! The Next Big Marketing Idea

Section 1 Why You Need a Free Prize Can I Get It, Mom? If you were like me, you nagged your mom to buy the cereal with the free prize inside. You bought Cracker Jacks to get the goofy little prize, too. We may have known that the cereal without a prize was just as good, but of course, it wasn't just as good. It didn't have a prize.In those days, cereal makers had it easy. They could offer a free prize and create amazing advertising as well. They could charge a significant premium over the generic brands if they had a talking tiger or a toucan or a Cap'n riding a boat through a sea of milk. Today, of course, that's no longer true. Cereal isn't the cash machine it used to be, there are too many brands, not enough shelf space and a newly cost-sensitive consumer that isn't fooled by TV advertising. All we've got left is the prize. The only way to stand out and command noncommodity pricing is to innovate. You can innovate with a licensed character or a cool shape or high- protein ingredients. You can innovate with packaging or pricing or even'yes, it's true? by putting a cool prize in the box. It's not only cereal. More than a decade ago, when Lincoln-Mercury started putting Bose stereos in their high-end cars, they were astonished to discover that more than half the buyers opted to add the $8,000 stereo to their $12,000 cars. The amazing thing is that almost none of these people had a stereo even remotely that expensive in their living rooms at home. They thought they were going out to buy a car, but they were entranced by something else'the innovation, the free prize. They were buying a stereo with wheels. Innovation Is Actually Cheaper Than Advertising It didn't used to be true, but in a world of Purple Cows, when the marketing is built into the product, creating products that are innovative is actually cheaper than advertising average products. So, once your company realizes (and is sold on) that insight, then it will invest the money it would have spent on advertising to create cool products instead. That innovation is free. In fact, it's a profit center. Big companies don't blink before spending $100 million on the marketing for a product launch. Small companies spend plenty on billboards or local advertising. But since that isn't working, they'd be better off spending half that amount and making something really special instead. By the time you finish this book, you'll discover that the future belongs to companies, organizations and people who are remarkable, not boring. Introducing the Godin Curve The right half of the curve demonstrates that as you invest in media, you need to have a higher and higher expected return to break even. That makes sense. If you run a ton of Super Bowl ads or spend a lot of time and money to get on Oprah, that's expensive. It's a risk. You need a big payoff to make it worth it. I'm not making a controversial assertion here. The simple fact is that the more you spend, the more sales you need to justify that spending (and the risk and overhead that goes with it). The left part of the curve shows that the same is true for technology. If you spend a fortune building a gizmo, you need to have a very high expected return in order to break even on your investment and have enough left over to have the risk of the investment be worth it. When Iridium invested $3 billion to launch sixty-six satellites in permanent orbit around the Earth, they were making a very big bet. In order to make a bet like that pay off, the return has to be astronomical. The Godin curve combines the two parts, then adds a dotted line. The dotted line shows how much revenue you can expect (historically) from big investments in media or technology. Yes, you generate more revenue when you get a big ad campaign right or when you launch a high-tech success. Surprisingly, though, the increase iGodin, Seth is the author of 'Free Prize Inside! The Next Big Marketing Idea', published 2004 under ISBN 9781591840411 and ISBN 1591840414.