Pick of the Prizes: Why brands need to run prize promotions, now more than ever.
With so many agencies focussed on creating fresh and innovative ideas via new media, it is easy to forget that some of the original marketing techniques can still be relevant and effective today. Let’s be honest, everybody likes a freebie, or the chance of winning a relevant and valuable prize.
Jeremy Stern, CEO of thenetworkone member PromoVeritas believes it is time to remember the forgotten art of running prize promotions – they might just be the vital ingredient your brand need to win over customers and improve sales. PromoVeritas run over 1,000 prize campaigns a year, all over the world, for major brands such as Pepsi, Mondelēz, American Express, ASOS and Kellogg’s.
“In the search for new ways of reaching consumers, let us consider a cost-effective way to launch a product, generate incremental sales, reward loyalty or simply give your brand and its customers a warm, fuzzy feeling. What we call ‘prize promotions’ can enhance any type of marketing campaign that you may be considering, boosting engagement and response rates.
But first a bit of background. Before I founded PromoVeritas in 2002 I held senior Marketing positions in Sega Europe and Coca-Cola Europe. Back then one of my biggest challenges was navigating a way through all the different rules and regulations that exist in different countries, even within the EU. To find the answers I had to go through slow and inexperienced internal legal departments or costly and time consuming overseas law firms. The lack of a one stop way of running cross-border prize promotions led me to set up PromoVeritas and I have never looked back. We are now a team of 40 running working on campaigns in over 80 countries.
From my own experience, I know that new is best, the creative idea is king and running a prize promotion is seen as old fashioned and complicated. But sometimes the old is gold, and so it is with prize promotions. Over 50% of retail decisions are made in store (Source:POPAI Study) and a good solid campaign can make a significant different to sales. One study showed (Narasimham, Neslin & Sen) that across over 100 product categories, a reduction of 15% in price would increase sales by 34%, this went up to over 200% if it was supported by a prize promotion and appropriate point of sale material.
In addition to short term gains, the right activity can have a positive impact on long term brand equity and loyalty. Summer would not be summer without the roll out of McDonalds Monopoly game, and as a result of working with Cadbury for over ten years, the Hunt the Creme Egg Prize promotion, involving prize winning eggs hidden in stores all over the UK, has become part of the national calendar, and pushed sales of Cadbury Creme Eggs to record levels.
The key is to choose and select the right mechanic to suit your objective and your budget, whether it’s online, on-pack or instore, and to then know and understand the relevant laws and regulations in order to run it safely and compliantly.
Changing Attitudes towards Prize Promotions
Ongoing tracking studies that we have done, plus actual experience, has shown that those brands who have been brave enough to run a campaign during the pandemic have been more successful than planned, and have found it a highly effective way to boost engagement, gather valuable customer data or drive sales or site traffic. This is probably the result of three factors: people had more time on their hands, had become more tech savvy and they had more financial concerns. A perfect combination for entering prize draws and competitions both on, and offline. And there has been a significant shift in the type of prizes that people want. Get it wrong and your results will suffer. Cash is king, but vouchers and Tech gear have moved up in second and third place, replacing holidays and cars.
|1. Cash||1. Cash|
|2. Holidays||2. Vouchers|
|3. Cars||3. Tech gear|
|4. Experiences||4. Experiences|
|5. Vouchers||5. Holidays|
PromoVeritas recently held a webinar entitled “Shopper Marketing: What next?” where external experts shared their very unique points of view. Savvy Marketing, one of the UK’s leading retailer marketing agencies revealed that with 78% of UK shoppers looking to cut back on household expenditure in 2021 compared to 2020 they are now more likely to look for price promotions or shop at discounters in future. Offering the chance to win valuable prizes will make your brand stand out more than others right now. Another of our speakers, David Roth CEO of The Store, WPP’s Global Retail Agency, also had ‘Prize Promotions Return’ as one of his top 8 trends for 2021/22 as retailers and brands fight to entice shoppers back into stores or make their products even more attractive online.
Time to give back
Brands that reward their consumers, followers and fans will create a connection with them and prize promotions can achieve this better than most other techniques. Of course not everyone will win a prize, but if you structure the activity correctly, have the right number of prizes (more of lower value, is always better than one of a high value), create the right feeling through the entering process and have appropriate follow up (another opportunity to mine data) then you will have a win;win.
So whether you are planning a direct mail campaign, an email burst, an experiential event, or just a simple advertising campaign, try a test. Build in a simple prize promotion in an A/B test and monitor the difference in response rates. You could replicate some of our clients and get double the response.
As for 2021, our webinar left us feeling cautiously optimistic! Here are our top takeaways to share:
- If you can put a customer in a positive mood they will spend 12-15% more
- Themed calendar events such as Valentine’s Day & Father’s Day will be more popular than ever due to lockdown restrictions – link your promotion to one of them
- Just because sales are Online does not mean your promotion will be any less as effective
- Promotions – both prize and price – will be of increasing importance to the shopper
- There will be an urgent need to drive footfall into stores – expect a lot more retail led prize promotions and loyalty rewards.
Planning your promotion is everything
The purpose of this article is really to share how positive and full of joy running promotions really is and that they are much easier to set up than ever. I will leave you with my top tips for running prize promotions:
- Select your prizes and their quantities with care, make them relevant to your audience/brand
- Research local rules and regulations for promotions yourself, or use an expert, and remember the social media platforms have their own rules too
- Ensure you have solid, clear Terms & Conditions – they are the key to all good promotions
- Make entry as simple as possible to maximise response – insisting on a purchase may not be vital
- Don’t fall down on your back end! Use an independent verification expert like PromoVeritas to handle winner selection, legally and fairly
- Complete the circle – contact your winners and send the prizes out quickly – make the winners’ experience special and their fond memories of the brand will stay with them forever”