How your promotion could backfire and how to avoid this
Brands and agencies can now choose from a wide range of promotional techniques and craft them to suit their needs and brand strategies. Vouchers and coupons, competitions, prize draws, scratch cards, loyalty schemes and Willy Wonka style instant win promotions have all proven their value to brands during the economic downturn by driving footfall, increasing weight and frequency of purchase, improving loyalty and collecting invaluable data on consumers. However all promotions carry risk and could damage both reputations and bank accounts if they go wrong.
Reputational Wrecking Balls
Although most promotions seek to gain the engagement of the consumer, it is this very closeness and immediacy that can cause brands significant reputational damage. Human error is the biggest risk with most promotions. A decimal point missed off in a forecast for a free gift, a key clause missed out of a set of terms and conditions or a fat finger on a computer programme.
Recently Boots ran a Facebook promotion offering a prize of a trip to Barcelona, but accidentally sent all 9,000 entrants an email telling them they had won. Their Facebook page dissolved in a sea of happy people, who soon turned angry when the best that was offered was a £10 shopping voucher. Goodwill was replaced by a sour taste.
Closing down a loyalty scheme is another sure way to alienate the people who should be your strongest brand advocates. Unless you over-communicate, when and how a reward scheme will be closed down, members of the scheme are likely to feel that you are not delivering on your promise, unless you offer them something better.
Another common fault is for promoters to want to change terms and conditions after they have been published. This might be because the promoter has not thought the promotion through from start to finish or they wish to extend the closing date to gain more entries or they wish to tighten exclusions after an attack from scammers or hackers. This inevitably leads to a vocal social media backlash from Compers (enthusiasts who systematically enter promotions as a hobby) and it may also lead to a public admonishing from the Advertising Standards Authority as changing the T&Cs is a breach of the Code of Advertising Practice (CAP).
Breaking the bank
Promotions can also have huge financial impacts on a company. The most famous example fortunately remains the 1992 Hoover Free Flights promotion of 30 years ago (it offered free flights to the USA with purchases over £100) which cost the company over £50m and brought it to near bankruptcy. However the growth in Fixed Fee and Insured promotions in recent times is an indication of concern not just by Marketing Directors, but also Finance Directors, to avoid budgetary risks. There are plenty of recent examples of coupon and voucher schemes significantly over redeeming as consumers share codes or photocopy vouchers. Ebay have only just put in place controls to reduce the widespread sale of coupons on their site many of which might have been obtained in appropriately from printers or left over by promotional staff and sold at a knock down rate..
Tips for avoiding disaster
1. Plan your promotion in detail - most promotional disasters happen because the planning is rushed. Make sure that you consider carefully consider all three phases of the promotion - pre-promotion; the active phase; and post promotion.
2. Invest in top terms and conditions - solid T&Cs will reduce the number of queries that you get about the promotion and give you the protection that you need to avoid manipulation or unforeseen demand.
3. Think like a criminal/opportunist - people will stumble on or seek out ways to manipulate your promotion unless you have anticipated likely weaknesses. Ways to stop vouchers being photocopied are easy to develop, but some techniques are far more advanced, with criminal gangs having been known to hack IT systems to steal the winning codes for promotions.
4. Don't Chance it - use people who know the risks and can control and reduce them for you.
Jeremy Stern is Managing Director of PromoVeritas, the global independent promotional verification and compliance specialist and can be contacted at jeremy@promoveritas.com or tel +44 (0) 203 301 7360
