Want to Make a Sale? Give 'em an iPod

Oct. 11, 2005 — -- Avoiding Internet ads and deleting spam e-mail has become a predictable daily routine for many people, scanning through inboxes to delete the usual pile of unwanted junk -- Viagra ad, get-rich scheme, free iPod offer, weight loss product … wait, a free iPod? Sign me up.

As the popularity of Apple's family of digital music devices has steadily grown, more and more companies have begun using the iPod to drum up business and lure potential new customers. And they're finding that offering free iPods is one of the few promotional incentives that cuts through the clutter.

The trade magazine Incentive, which monitors business promotional programs, recently listed the iPod Mini as the top motivational electronics product in the country. Banks, credit card companies, soft drink makers, small businesses, even real estate agents have found that offering a free iPod or credit toward Apple's iTunes music service can help bring customers in the door.

"It was the top electronics product, by far the top MP3 product, and one of the top 50 products overall," said William Flanagan, Incentive's editor in chief.

The People Who Usually Avoid Promotions

Joel Sartori, a marketing manager for a software company in Vermont, was checking out the local forecast on the Web site http://www.weather.com this summer when he noticed an advertisement for a free iPod shuffle in connection with a credit card promotion from Citibank. Usually, Sartori said, he's very wary of Internet ads offering anything free, but he found the iPod promotion enticing.

"I normally never sign up for those things, but it seemed attainable, and it was from a legitimate company," he said.

The offer required that he spend $500 on a new credit card within the first three months of use, and then he'd automatically qualify for the shuffle, which retails for $99 to $129.

Using the credit card in place of his normal debit card spending, it took him three weeks to make $500 worth of purchases. He's now just waiting for delivery of his iPod shuffle. Sartori said the ease of the promotion was one reason he joined, but the lure of iPod itself was just as big a draw.

"I wanted one, and I was probably going to buy one within the next six months anyway, so it was really just good timing," he said.

Everybody Wants One

The consumer demand for iPods is one of the major reasons they've become such an effective promotional tool. The iPod products have seen steady sales over the past couple years, and some retailers have had trouble keeping them in stock.

"There certainly are a lot of companies that are looking to capitalize on the popularity of the iPod," said Barry Hana, vice president of marketing for Incentive Concepts, Apple's exclusive representative in the incentive and corporate gift market.

Hana said the industry doesn't track figures for how many have been given away. But electronics make up about 40 percent of the incentive market, the largest of any segment, which makes it likely that the iPod is one of the most frequently used products. And the steady demand from companies is evidence enough that it's been an effective promotional tool, he said.

"We've been representing them for about 18 months, and we're probably doubling our sales every month. If we're shipping that many of them, then they've obviously been pretty popular and the promotions must be working," Hana said.

Small Businesses Using iPods, Too

Citibank and other big companies, which often bulk order promotional products by the thousands for their promotions, aren't the only ones piggybacking on the iPod craze. Many small businesses, including local gyms and real estate companies, have used iPod promotions to convince people to sign a lease or a membership contract.

The diversity of the Apple products allows businesses to choose a product that best fits their customers' needs and their own company budgets. Starting with the $99 shuffle, they have the option of offering the iPod mini and iPod nano, which range from $199 to $249, and the standard iPod, which ranges from $299 to $399.

"We have orders ranging from 10 to 10,000 at a time. It depends on the size of the promotion and the size of the business," Hana said.Regina Julian, a medical executive who works at the U.S. Department of Defense, was shopping for a new gym after relocating from Texas to Fort Belvoir, Va. While looking at the paperwork at a small gym near her office she noticed that signing up for a yearlong membership entitled her to a free iPod shuffle.

Like Sartori, Julian said she's not usually moved to purchase anything simply because of an incentive offer.

"By the time I've decided to commit money, there's not usually any kind of gift that would sway me," she said.

She had thus far avoided buying an iPod, she said, because she tends to avoid products she thinks are too trendy. But after filling out the forms, she demanded her free gift on the spot.

"I've used a lot of other MP3 players, but the iPod is by far the easiest to use. It was totally worth it," she said.