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It's done all the time - at trade shows, in your mail box, over the web, and in a thousand other ways. Here's a few real life examples:

-In walking through an audiologist trade conference, visitors are offered a free DVD player (a value of $125!).

-A bank offers a free vacuum clean for new savings account clients.

-A wireless phone company offers a $50 coupon to be used on a cell phone for a family member.

-A web publisher offers a free ebook for registering for their newsletter.

"How can they do that$%:" you're asking yourself. It's like this: premiums increase conversions and the value of the premium is directly related to the lifetime value of a customer.

For example, if I know that one of my customers, or a member of my list, will buy $4000 from me over the next two years and giving me a margin of $2400, would it be worth giving a prospect $100 to become a client$%: You bet it would.

Premiums help convert. Offering a premium increases the value of your offer and the ease in which it is fulfilled increases the prospect's trust and confidence in you. When a prospect has accepted a premium from you - you have created a relationship with them!

If you're considering offering a premium keep in mind a few simple guidelines. First, offer a premium that's relevant to your desired audience. Second, ensure that premium is of a value consistent with that of your customer - i.e. don't offer a free pencil when your typical customer is buys $10,000 from you! Third, make sure the full retail value of the premium is visible (even if you paid less for it). Four, test different premiums - you'll be surprised at how differently some premiums will work.