An item offered to a buyer, a “bribe”, usually free or at a nominal price, as an inducement to purchase or obtain for trial a product or service offered via performance marketing techniques.

Premium offers tend to age and decline in effectiveness and must be replaced when effectiveness begins to subside. On rare occasions, a particular premium may maintain its effectiveness for many years.

A premium is a special item, bonus, or award offered free or at a nominal price as an incentive to induce a target market to purchase or obtain for trial a product or service. Advertisers use premiums to attract consumers who would not normally buy a product or service, or to encourage more frequent buying by those already buying the product.

In addition, premiums are used to introduce new products, provide extra appeal in special sales events, meet competitive prices, provide copy appeal, promote larger size units, and excite a company’s sales force.

When premiums are used as an incentive to try a product, such as a magazine, it is important that the premium selected be attractive enough to get qualified prospects to respond, but not so desirable that consumers are more interested in the gifts than the product being sold.

In fact, many advertisers believe that the most effective premium is the one that is closely related to the type of product offered. For example, a baby food manufacturer may offer a rattle as a premium with the purchase of baby food. It is also felt that the premium should be visually appealing and, if possible, serve as a constant, favorable reminder of the promoted product, since the more often the premium is used, the more often the customer is reminded of the product. For example, advertisers frequently imprint their name on their premium to reinforce the relationship between themselves and the premium.

Synonyms: bonus offer, ethical bribe