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The Science Behind Consumer Promotions
If you're thinking of running a sales promotion as part of your overall marketing strategy, before you leap in, consider the following tips:
Tip 1: Know your Audience
Just because a person running a promotion is a gym junkie, it doesn't mean gym memberships could be a great prize. The prize has to be the right fit for the target audience. If you get the prize right and match the prize to the target, you will have a better rate of participation. Make sure the prize is popular and useful as it will make people want to enter.
Tip 2: Get the Legal Bits Right
Know the difference between a game of skill and a game of chance and when you do and don't need a permit:
A game of skill is a judged competition; a game of chance is when someone has a random chance of winning. Asking a few questions does not constitute a game of skill, as you are likely to have more than one winner.
A game of chance requires a permit and the rules are different in each state. Permits are payable on the total value of the prize pool. It is best to speak to a promotional marketing lawyer or a specialist promotional marketing agency for all the most up-to-date information.
Promotions need terms and conditions. They protect both the promoter and the agency. The terms and conditions are a contract and once finalised cannot be changed or altered without alerting the relevant permit authorities. For example, if a winner is called and doesn't answer, it doesn't mean that the next person on the list should be contacted.
Tip 3: There is a Science Behind Prizing
Consumers want to have a good perceived chance of winning to make it worth their while entering the competition. Therefore, three prizes are better than one, but more than three only adds to cost, not predisposition to participate. Consumers have a significant preference for instant over delayed gratification by around 5 to 1 (IMI Consumertrack 2011). Research shows us that drawing prizes throughout the promotion is much better than a major prize at the end.
Tip 4: Make it Easy
Easy to enter, easy to find, easy to understand. The more complicated the mechanic, the more likely consumers will not be bothered to enter. Many of us will have experienced entering a competition through answering a number of questions, only to find the final entry detail is to provide a submission in 25 words or less. Research shows that about 60 per cent of the people who would have entered will give up (IMI Consumertrack 2011). If you make a consumer work too hard, you will pay dearly.
Tip 5: Manage Winners' Expectations
Although many prize-winners will be elated to have won, some winners may be impossible to please. This is where the terms and conditions can help. Terms and conditions should include a clause that refers to any changes to the prize not being permitted unless consent is given by the promoter and it is written and agreed by both parties. Remember, not transferable or exchangeable for cash means exactly that.
Tip 6: Promote the Promotion
The best promotion in the world won't get any entries if people don't know about it. If it's not on pack and there is no communication in-store, think about other opportunities to promote, such as consumer magazines - the supermarket ones are good - and online publications, but be specific about which ones you are targeting. Also, use social media channels to help generate word of mouth and drive people in-store.
And the last word:
Tip 7: PR Support for Promotions
From experience working in both the PR and promotional marketing environments, promotions are rarely picked up by media unless your approach is unique or your prize is sensational. If a client wishes to PR a promotion, try to get involved in the early stages to lend your expertise.