Promotional Risk... Is it worth it? Over the past decade, there has been tremendous growth in consumer and business product releases, bringing challenges to consumer and B2B marketers to differentiate brands. The ever changing media market increases the complexities, for both offline and online marketing professionals. The combined formula, with the recent recession and ongoing downturn of this economy, leaves marketers with an environment that is unique to any year in history, with a challenge that only the riskiest of marketers will survive. Are you willing to bet your marketing, advertising, public relations or promotions career on your willingness to take a risk? If you do not include this risk in your promotional strategy, while your competitor does, what will happen? Will your marketing competitor win market share that you have lost or will the safe road you have taken pay off? It is my experience that you must take the promotional risk. You are about to learn why you should include promotional risk coverage in marketing strategy to engage the consumer and secure a larger market share, during this recession. Follow these simple steps in marketing promotions strategy and build big brands that will stand the test of time.
There is no argument that consumers are responding to large cash and prize giveaways. Your marketing research can stop with the review of network programming you find in recent shows like Deal or No Deal, Price Is Right, Who Wants to Be A Millionaire, and the many other network promotions which include large prize and cash offerings to both gain consumer loyalty and increase ratings. Radio and television stations, newsprint and magazine publications, online and offline companies alike are all tapping into the simplest of strategy to increase viewers, visitors and readership, while gaining promotional affiliations and sponsorships. The strategy is simple. They are taking promotional risk.
This promotional strategy doesn't require the risk to your company or your job, which you might initially assume. You give away cash or large prizes. Everyone likes to win and most people like to see others win. As long as you protect yourself and company with promotional risk coverage, you will also be the winner. Your prize offerings are based on the odds of a winner claiming the prize. As long as your promotional strategy does not include a guaranteed prize offering as the only prize, your company can include promotional risk coverage with the promotion. Promotional risk coverage can be found in promotions like you see on television, hear on the radio, read in newspapers, magazines, see online or in internet marketing promotions. They offer the consumer a chance to win, and when there is a winner, your company is protected against having to pay the winner. Much like you insure your car from an accident or your home from a natural disaster, you can cover your promotion against a risk associated with the liabilities of giving away large valued prize amounts. The cost of promotional risk is minimal, literally a fraction of the prize value, and is based on the promotional odds, the prize value, and the number of chances given to win the promotion.
The strategy behind marketing promotions, which include promotional risk coverage, is simple and enables companies to differentiate brands in a very competitive market. Promotional risk covered promotions open up possibilities to offer larger prizes than most companies can afford, or would want to take promotional risk on. These large prizes are proven to increase registrations of online users, traffic in stores, and sales at any given time, leads generated both offline and online promotions, and build large brands through consumer loyalty. The strategy is to include a prize offering, which can be based on a game of skill, game of chance, or the redemption of an offer.
With Games of Skill, you could include promotional risk coverage in offering someone a chance to win up to $1,000,000 in a sports promotion. You have probably seen such games of skill in basketball promotions of a random fan shooting a basketball from half court. A football promotion might include a punt or throwing contest, or a hole in one coverage for golf promotions and tournaments.
Games of Chance are found in online marketing promotions and Internet marketing, with sweepstakes, online contests and games. You might see them in offline promotions for trade shows and events where B2B marketers or consumer marketers are holding drawings to increase traffic to events, increase customer response and generate leads.
Promotional risk coverage can be included in marketing promotions to protect companies against over redemption of coupon offerings and fix promotional marketing budgets for both consumer and B2B marketing strategies. Conditional offerings, such as conditional weather rebates, can add to marketing promotions to engage consumer involvement in the promotion and increase promotional coverage and public relations of the marketing effort.
Over redemption coverage allows promotional risk coverage to prevent the variable costs associated to budgeting of a marketing promotion when there is uncertainty about your program's response rate or outcome. Promotional risk companies cover the cost of excess redemptions or responses, whatever the value of the prize, rebate, coupon, or premium. This allows you to plan promotional expenses to the penny, eliminate budget overruns for higher than expected response, and stretch promotional dollars for a maximum market impact.
The bottom line is magnified during the current economic climate, within every department of every business, small or large. To drive business in a recession, or any economic downturn, marketers must find new ways to gain and maintain market share. Those who realize that the success and longevity of their brand is in the hands of the American consumer will stand far ahead of the competitor. In order to engage the consumer and gain brand loyalty, the savvy marketer provides that consumer with benefits which will entice reaction. Consumers react to what they perceive is in their best interest. Find that formula in promotional risk coverage and you will benefit.