Are you curious about using rebate cards, warranty programs, gift cards, and other systems that manufacturers and brand owners put into their product packaging and ship to their customers?
Do you know what I’m talking about?
This has been happening for decades, and I’ll share a story.
My Warranty Card Story
I remember clearly when I was a kid buying a Nintendo (Super Nintendo is the best! ). I begged my dad to finally get me that SNES and literally had to put the keys into the ignition and turn it on (I’m well under the driving age at the time).
Arriving at Toys R Us, (related: tune in to our podcast on the Toy Industry shakeup and the ripple effect of the Toys R Us Bankruptcy ) I rushed to grab my ticket to redeem my Nintendo at the cashier. For those old enough to remember, you had to pay for the Nintendo at the cash register, get another ticket, and then go to a redemption booth. Handing my coupon over the counter, the redemption counter worker then would issue me my brand new Super Nintendo.
My dad couldn’t drive fast enough, we got back home and I tore open the packaging and figured out how to get it connected to the TV. Now, I won’t bore you to death talking about my love affair with Yoshi and Mario, let’s focus on the matter at hand.
Do you remember the warranty card / form inside the box? Filling out the form and using the prepaid envelope or post card, I could enter into the program. My memory is foggy, but if my product had any issues, I could use this program to have it fixed.
Fast forward decades later, and this clicked – hey – Nintendo is doing that for the data. Toys R Us isn’t telling them that 12 year old Mike in Hartford, Connecticut bought the product on December 10, 1988 (random dates, I’m not that crazy to remember when I got the SNES). Nintendo – the manufacturer, the brand, had to put a warranty program in place in order to try to convince me to opt in and give my information to them in order to benefit from a warranty program.
Today, Toys R Us is basically dead, and Nintendo is still an awesome mod on our laptop. But the system is still alive and well.
We, the brand, the manufacturer, have a responsibility to try to learn as much about our customer – end customer – as possible. Sure, Toys R Us and Amazon Vendor Central may be our buyer. And more certainly, Mike Michelini buying the Nintendo at Toys R Us was buying it from Toys R Us – not Nintendo. But, it is our right as brand owners to offer programs to our users.
Now, today let’s talk about some of those programs and get your creative juices flowing on what kind of programs you can use in your brand’s ecosystems.
1. Warranty Program
Don’t you sometimes hear a marketing spiel for some products that put emphasis on “Lifetime warranty”? And, some buyers just rush to go get them. What exactly is a warranty? And why is it used by some business owners for their products to gain competitive advantage?
What is a warranty?
Simply put, a warranty is a guarantee from the manufacturer or distributor of a certain product that in case of defects or malfunctions, this shall be replaced or repaired. It provides buyers a level of protection that assures them they will receive what they expect.
Two Types of Warranties
It should be noted though that when a product is being sold in the market, it comes with an implied warranty that it is of good quality and in working condition. After all, no one in their right mind would buy a defective product.
But, as a means to add value to their product, manufacturers are offering what is called an express warranty. This is most especially true for e-commerce entrepreneurs like us that because of the nature of online shopping, we attach this kind of warranty to our products.
Depending on your creativity and risk appetite, the coverage of warranties can be one or a mix of the following, among many others:
- Repair. You can provide this coverage to give your buyers an assurance that product defects can be rectified to make it work like new. The repairs can be done in the main factory or thru accredited service centers nearby.
- Replacement. When the product goes beyond repair, this can be resorted to. But, only if expressly provided in the warranty clause. This also covers replacement of spare parts or systems.
- Refunds and Returns. You have this covered to respond to unsatisfied customers who would rather have their money back. When all else fails, or if there is no potential for a repeat from this particular customer, then by all means, refund.
- Parts & Materials. This often goes hand in hand with repair or replacement specifically when spare parts or other materials are necessary. In some cases, you can limit your warranty scope to certain parts of the product.
Say for example, you are selling a cooling system, so you can include a functional parts warranty that covers repair or replacement of compressors that is a crucial part of your cooling system.
If you can think of other ways to expand the scope of your warranty program, please let us know. We would love to update and share to others.
While thinking of what coverage or scope to express in your warranty, it would also be good to express what you will not cover. It will not be a grand idea to be all-out in your warranty program just to encourage purchases. You also need to protect yourself and your business. Here are some which we have gathered from different product warranty:
- Normal wear and tear
- Improper use of product and non-compliance to the prescribed operating and maintenance procedures.
- Abuse and use of the product for other than its intended purpose
- Negligence, tampering and unauthorized repair
- Damages caused by accidents, fire, flood or other acts of nature
- Development of cracks/stains/rust in any part of the product that is a normal consequence of operation.
What is also very important in a warranty is its validity period. You may wonder why there really is no standard period. Some goes for only a year while others have 5 or 10 years. Then, there are those who offer a lifetime warranty! So, what gives?
Essentially, it follows your product’s usable life. You are guaranteeing that your product can be free from manufacturer’s defects and can be used with little to no maintenance for a set period. After that, you cannot guarantee that it will work the same way as it was first purchased.
What can we gain from offering warranty?
- Image of Product Quality. A warranty would carve a perception in the buyers’ minds that our product is of high quality and we are assuring them that it really is.
- Reduced risk of product failure repercussions. The reason of failure of a product doesn’t always fall on the product itself and how it was manufactured. A great deal, almost always, is caused by negligent and improper use by the buyers. When we express the limits of our warranty then we also reduce the risk of exposing ourselves to potential invalid claims.
Competitive advantage. We all know that you don’t have a monopoly of the market. You might be one of so many, selling the same product. Here’s where branding package comes in. And one thing that influences a buyer to purchase your product is if you have a good warranty program.
2. Free Gift
“Buy one, get one free.” “Giveaways!” “Freebies!” These are music to the ears of consumers. Who wouldn’t want to get something for free nowadays? But a skeptical question would be, why would sellers want to lose money giving away free gifts?
It will take more than a calculated cost-benefit analysis to understand this. It’s an industry trend that poses a lot of questions too, from consumers:
- Is it really free? Or, does the quoted total price actually include the price of the “freebie”?
- Is the product of low quality that’s why they gave free gifts as a means to compensate?
- Is the free gift something that the company wants to dispose and wants to transfer that burden to the customers?
Effect on the Customers
This will be premised on a bit of a psychological approach – the more motivated a person is to purchase something, the more he will do it. We will be touching on human satisfaction – the fulfillment of desires. Usually, that comes in gaining something of value without forcing it. It is what gives the customers that VIP feels.
That feeling of being taken care of in an extraordinary way builds up the trust that customers have in your brand. It’s not the monetary benefit that they will be after. It’s the non-monetary perk of the free gift that will make them keep coming back to you.
Benefits to the sellers
Questions such as those mentioned above should prompt us, sellers, to carefully think out and strategize a giveaway that will benefit us rather than cloud us with doubts from our customers. So, what can we gain from giving away free gifts?
- Repeat order. Do you know that feeling of wanting to return the favor because you were given something for free? This goes without notice that a big influence in the customer’s decision to purchase again is when they get more than what they expected.
Case in point, if the coffee cups they buy comes with a matching spoon or a pack of coffee, then that gives them the opportunity to use the product right away. And, that also makes them think, what will I get the next time I buy?
- New order. If your free gift is a sample of another product of yours, then you just opened a window for a possible purchase of that product. The buyer will get the idea that this free gift is actually of a higher quality than the product that they purchased and something that they can really use.
A perfect example would be freebies on a make-up product, say the latest lipstick that comes in a gold case. Then, with it is a free gift of a decanted perfume sample – the newly released scent. That will give buyers a perception that they were able to get a hold on the latest “it” scent, for free. And the feeling that they get when they wear that will be a big influence in their decision to purchase the very product when they have used up the sample.
Free advertisement. Looking into the effects of free gifts on customers, chances are, they will talk about it. They will talk about their purchase more and how happy they were that it came with a free gift.
How to package your free gift
The package we are talking here is not the physical packaging, rather, how we present this giveaway to our customers. Sometimes, we see that if we bundle different products into one for a certain price it will get our customers to think that they’re getting a bargain. It could work but not all the time. The keywords here are “FREE” and “GIFT”. Those have to be explicit.
Going back to our previous example of coffee mugs with matching spoons, it could be presented in these ways:
“Buy a set of two 16 oz Coffee mugs with matching spoons for only $35!”
“Buy a set of two 16 oz Coffee mugs for $35 and get matching spoons, free!”
The first one would get buyers to think that they’re getting a bargain, more like a discount or savings. Something was lost – from the price, that is. But they’re actually paying for the mugs and spoons.
The second one though delivers a message that your buyers gain something. The focus now is not on the savings, rather, on the value gained. They’re just paying for the mugs and they’re getting spoons for free!
What would have been a more compelling message between these two?
3. Free ebook / Video training
This is somewhat similar to the free gift program. The keyword is also “free”. It could be an ebook or video about the product or could be just related to it as your way to cross-sell another product.
This would go so well with products with a very detailed instruction on how to use them to make them work for you. It could be a complex system; a multi-function appliance or an online tool that can be made easier to use or navigate with the help of an ebook manual or instructional video.
We have to consider that some users, if not all, do not have the luxury of time or the gift of genius to figure out how to operate your product. They sometimes need a step-by-step guide and if there is an accompanying video, this creates a semblance of a trainer-trainee thing.
This will also show the kind of customer support that you are willing to give, meaning, you will be with them every step of the way.
4. Join Our Online Community
You might have heard about the proliferation of different online communities in the internet. Social media has brought people together and to most of us, we consider it as one big community. But we are not talking about just a mere gathering here. This goes deeper; we are talking about engagement – the real customer engagement.
What Is An Online Community?
It is a gathering of people that shares a common interest or purpose. It provides a forum for members to engage with each other basically on topics that involve the purpose, for which the community was built. For the e-commerce industry, online communities play a big role in getting feedback, market analysis, product reviews, customer surveys, customer demographics, among many other useful information.
Types of Online Community
There are different platforms that you can use to launch your online community. But generally, there are two types:
This is launched under the free social media sites such as Facebook, Twitter, Instagram, Youtube and others. The advantage here, is that the potential community can be sourced from a bigger community that make up these sites. The best thing about this is, it’s free. The site is built and all you have to do is identify who you want to reach. You don’t need too many people to manage your community.
But for every advantage comes a disadvantage. In this type of community, you are at the mercy of the platform’s updates, policy and algorithm changes – you just don’t have full control. Risk is, you might have to change your strategy every time so you will not lose your members. There are times when the updates are abrupt, leaving you little to no time to think of another strategy. But if you are that quick then this wouldn’t be too much of a risk.
Another thing to consider is that you would be up against many competitors vying for the attention of the same set of followers or members. Competition is tighter under this platform.
Like it said, you own it. Meaning, you have full control over your community platform. You can customize how you will do your branding and how you will design your forum for your members or subscribers. You can gain access to site features that you can’t get from free platforms. There might be limits but not to the extent of those set by social networking sites.
Full control though comes with a price. You need to get your presence out there to grow your community. Because, unlike in free platforms, you will start at zero and really build your audience. It will not be an easy task. This means, more work on your part.
You might need people to design the page for you, manage the community, do some site programming and other technical aspects. Unless you would want to remain small, then you can do everything yourself.
It’s your choice really which platform to use depending on your circumstances. Better yet, you can marry the two. You can create a community under the free platform to introduce them to your site and lead them to the online community that you own.
How Can Sellers Benefit From Building Online Communities?
It is of utmost importance that you are clear about your purpose for launching an online community. Only then can you effectively plan how you would want your community to grow. To help you out in this area we will list some of the benefits you can get from launching one:
1. Optimized Customer Experience
You have to remember that customer experience is a key factor to gain brand loyalty. Here are some of the things you can do to deliver to your customers the optimal experience and for you to get their loyalty:
Exclusive Product Introduction
You can do a soft-launch of your new products through this community and you make it exclusive to them. This way they will feel that they can get first dibs on your latest products – an experience that is not meant for all.
Or, you can announce events or your latest promotions through your online community. Better yet, you can get them to organize these with you. It’s also a way to get your customers to engage with each other, especially for those who are in the same area or location.
Make the platform as a forum for feedback too. You can ask for their experience in using your product and how you can improve it. This will also create excitement for your next best thing.
2. Optimized Customer Support
Your online community will become your extended customer service arm. Unlike a one on one customer support between you and a certain customer, this now involves a whole community of members who will look out for each other.
The actual experience of one can be a potential experience of another. With this kind of knowledge transfer, each member becomes expert users of your product. You can gain for yourself the brand ambassadors that you need.
3. Organized Market Demographic and Other Market Data
One way to understand your products’ journey is to know in whose hands they landed. You can make answering a survey as part of signing up in your online community. The survey can include data on:
- Purchased product – product name and model; when it was bought; reason for buying; reason for choosing your brand; where it was purchased; etc.
- Buyer info – age; the city he lives in; etc.
- Satisfaction rating – how satisfied he is with the product or with the delivery
- Product planned for next purchase
There was an online community launched by a manufacturer of power tools. It became more than just a gathering of users of its products. It actually expanded into a hub of craftsmen and artisans – woodworkers, metal workers, hobbyists and would you believe, a cake shop owner too (well, they make elaborate dessert set-ups of rotating cake stands and hydraulic dessert platforms)! Common interest. Common purpose.
This engagement led to a deep relationship between the company and the members of its online community. The relationship became symbiotic that different events were launched with them working together.
Once, the online community organized its first-ever Artisan Fair. It was held in a local city where each community member in that area set up booths to sell their handicrafts and products. And how did the company get in the picture? Well, each booth was also a demo pod to show how they crafted their products. The tools they used, of course, were of the company’s brand.
In that same fair, workshops were held and facilitated by the members and opened to the public. Again, they were using the company’s tools. Most of the participants were craftsmen too but were not current users of the brand. The workshops were good windows to market the brand to them, for the logo can be seen everywhere.
It helped, though, that the company has an exclusive distributor in that city. But, was that a major factor in its marketing success? What if there is no physical office or distributor in an area, you might ask. Read on to know how they were able to gain offline presence in these cities.
No office? No problem.
Well, another good thing about that fair is that the members provided livestream updates to the administrators of the online community. This was also shared in the page and to members from other cities. This gave them the idea to do the same fair in their own city. But take note, there was no physical company office or exclusive distributor in that area.
So how were they able to pull this off? Enter the brand ambassadors – the members from the first fair came as the company reps of some sort. Everything just rippled. One local fair became a national roadshow event. All thanks to the online community.
5. Enter To Win a Big Prize
This is a common scheme to introduce your business to potential customers and to entice them to buy your products. One could go when if a customer purchases this certain product or if his accumulated purchases reach a certain amount; then he will be entitled to join a raffle where he could win a prize. The prize could be in any form imaginable. Mostly, they involve trip packages, cars, gadgets, a set of products and sometimes, even cash.
You can also do this as a way to introduce your business to potential customers. From what we can see in social media sites, for people to enter your promo they would have to complete three-steps. First, follow your account or site. Second, have them follow those you follow. Last, they should tag their friends – one comment, one tag. So the more friends they tag, the more chances of winning.
You can also provide another catch: they can be entitled to a certain number of entries if they share your post on their own pages.
It’s the cost of the prize that you would have to consider and really think if it will be worth it. Or, you can collaborate with other brands to share the cost.
What’s certain here is that people will always vie for a chance to win something big.
6. Get Featured On Our Social Media
In this day and age, validation is something that has become a commodity. Something good must be shared. Remember the catchphrase, “Pics or it didn’t happen”? Well, this is somewhat like that.
And, it works both ways. Your customers will get the validation that they are users of a reliable brand. You, on the other hand, will get the validation that you are a reliable brand having a lot of satisfied customers – as you featured.
This can also cause another ripple effect that will work to your advantage. When you feature your customer on your social media, expect a repost and a “thank you for the feature” caption. That will definitely get the attention of that customer’s followers and make them think how they could also get featured. They then will become your would-be customers.
And So Many More – Start Trying Today!
I hope today’s guide gets you thinking about doing more than just selling products.
And even more than building a brand.
But it is really about building a brand. A quality brand has a program for returns. They have additional training materials and they are featuring their customers on social media.
Start doing more to engage with your end customer. Leverage the fact that you have invested a ton of time making your own brand and start offering more programs and gifts to your customers by having a post-sale conversation with them.
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