Choosing the Right Sales Promotion Mechanic for Your Next Campaign

Posted in Consumer Promotions and Loyalty, Promotional Mechanics, Prize and Winner Management, Prizes, Promotional Risk Management

by Chris Baldwin on Nov 4, 2015 2:00:00 PM

With so many to choose from, what do you pick?

There are many variables to consider when developing an effective sales promotion campaign. How can you achieve your business goals while ensuring that you don’t blow the budget? How can you attract the right audience but ensure that the promotion doesn’t prove too popular? And how can you deliver the best possible roi? In short, how can you keep your customers and your board happy?

One of the key considerations when planning your campaign, and assessing risk, is in choosing the most appropriate promotional mechanicfor your objectives and audience. In this post, we look at the most common mechanics around.

WINNING MOMENTS

With a promotional campaign incorporating a Winning Moments mechanic, winners are selected based on whether they enter the promotion at a time that coincides with one of a series of pre-determined winning time slots.

For example, if 12.30-35pm is selected as a winning slot, the participant who enters within this time will win a prize. This ensures that all prizes are always available to be won by consumers.

Having a set number of time slots allows brands and their partners to manage likely redemption and costs – the greater the number of slots, the greater the win rate. Win rate will also increase in proportion to the length of each slot. This is also a useful mechanic to use when codes cannot be printed on-pack.

TEXT TO WIN

Gone are the days when all promotions were administered by postal entry. 89% of UK adults use a mobile phone, and 90% of mobile users send a text message at least once a week.

The smartphone enables brands to engage with consumers anywhere, at a time convenient to them.

Text-to-win promotional mechanics are easy to set up, and easy to communicate. They're particularly well-suited to products bought on-the-go, such as a snack or drink purchased in a petrol station. Consumers can enter quickly and easily at the time of purchase.

INSTANT WIN

A campaign promoting an instant win enables consumers to find out if they are a winner in seconds, by simply opening a pack or unscrewing a bottle lid. Very immediate, very exciting!

This mechanic is often used to promote product awareness and encourage repeat purchase. Everyone can participate, and consumers find out immediately if they have won, generating high customer engagement. The simplicity is attractive, encouraging consumers to buy the product again and again if they are unsuccessful. Shoppers are also likely to tell their friends.

Winning messages or symbols are easy to print – for example, on the underside of a drinks bottle lid or inside a cereal packet – enabling consumers to immediately see what they have won and how to claim it. These winning symbols or messages are seeded – or distributed – randomly across the product range in question during the production process.

CLICK TO WIN

Before the advent of digital media, consumers would be required to enter a competition by filling in an on-pack form, or sending a stamped addressed envelope to the brand. Nowadays, click-to-win drives people from an on pack promotion or POS material, for example, to a web page.

This mechanic is often used by brands to generate product awareness. For products consumed largely in the home rather than on the go – for example, instant coffee or a box of cereal – click-to-win lends itself well to redemption.

Consumers visit the campaign website and click through to complete a data entry form to participate, giving the brand another opportunity to engage, interact and build a database. Unlike text-to-win, there's no cost for each entry, although an initial outlay is needed for the creation of a campaign website, which would need to be factored into any ROI calculations.

When consumers arrive at the website, they're required to enter their unique on-pack code. This ensures that consumers can only enter once for each product they've purchased. The code is often the main (or only) proof of purchase, and the means of claiming a prize.

COUPONS

The UK has witnessed an explosion in the popularity of coupons, triggered by an uncertain economic climate and tighter household budgets. In the first half of 2014 there was a 33% increase in the use of coupons compared to the same period in 2013.

Consumer appetite for the best deal, coupled with the growth in e-coupons which can be accessed and redeemed online, and mobile coupons,which consumers can access and redeem via their smartphones, has put this mechanic at the heart of many brands’ promotional activities.

Coupons are a highly effective means of increasing awareness, driving trial and encouraging repeat purchases, whether the product is established or a new entrant into the marketplace.

 

CASHBACK

Cashback promotions are an effective way for brands to increase sales while maintaining their original price and profit margin. Offering money back on particular items also allows brands to compete directly with lower-price products being offered by rival companies. This approach is most popular among higher-value products that are considered purchases, such as white goods, laptops or car insurance, for example.

Clearly, the higher the cashback offer,the greater the uptake - but this means the brand still enjoys proportionately increased sales. Brands are advised to ensure that they are covered against over-redemption, as this could prove costly.

SCRATCH CARDS

Scratch cards are an age-old mechanic. They simply require consumers to scratch off a picture to reveal a picture, word, number or symbol to instantly find out if they have won a prize.

These promotions are engaging and fun, and more than a little nostalgic at times, enabling brands to create a little piece of theatre within a larger awareness campaign. This mechanic also allows brands to play with the odds to make the budget work harder.

GIFT WITH PURCHASE

It’s a straightforward promotional offer – buy X and get Y in return. But it can be expensive, and brands may need a healthy budget to do it well. If the offer is constructed poorly it can lead to problems throughout the campaign.

COLLECTOR

Collector promotional mechanics aim to engage consumers in a campaign with guaranteed gifts. As long as consumers collect the required number of tokens, they will receive their gift.

With rewards correctly aligned with the target audience, collector promotions can be hugely successful. These mechanics drive higher purchase per transaction rate and increase frequency of purchase, resulting in higher overall sales of the promoted products.

GUARANTEE, CHALLENGE AND TRY-ME-FREE

For brands with limited budgets looking to drive trial, a guarantee mechanic can work well. It requires the consumer to send in a negative comment, which tends to deter consumers from claiming their money back, resulting in lower redemption.

Guarantees can work well when brands are fighting for space in a supermarket, while try-me-free and challenges are effective at encouraging people to try a product for the first time.

SPORTING OCCASIONS

Some of the more unusual uses of fixed fee and promotional risk management come from creating a little sporting theatre in a crowded venue. Imagine offering one lucky football fan the chance to win £50k if they can hit the crossbar during half-time of a crucial England international at Wembley Stadium – in front of a 90,000 capacity crowd!

FREE PRIZE DRAW

Brands often overlook the need for applying a fixed fee approach to a free prize draw mechanic. It’s the mechanism that is arguably the least likely to require a fixed fee approach, but that doesn’t mean you want to take any risks.

For example,there are still route to entry costs to consider – such as the cost of postal entries or text messages – and these costs can escalate if a campaign proves more popular than anticipated.

Imagine 10 million packs each carrying a text to win a free prize draw message. Costs for text messages could be as much as 10p each, resulting in £1m worth of risk to the brand. Even if 10% of consumers participate, it still amounts to £100,000. Taking a fixed fee approach will overcome this potentially costly risk.

Estimating how popular a campaign will be is part art and part science. And in the fast evolving world of sales promotion – impacted by a strong consumer desire for value, the proliferation of new channels, and many mechanics straddling the online and offline space – budgeting based on expected campaign take-up is an even bigger challenge.

Of course, the greater the uncertainty in a sales promotion, the more pressing the need for eliminating risk by applying a fixed fee approach. Once you have decided on this route, contact a specialist fixed fee provider as soon as possible.

GET HELP FROM THE EXPERTS AND CONSIDER RISK EARLY

Getting the experts involved in a campaign as early as possible enables them to achieve more value for your brand, including:

  • Deciding on the best mechanic
  • Identifying the optimum length of the campaign
  • Making the most of your budget
  • Amplifying the campaign’s appeal
  • Ensuring the right levels of redemption.

And while you might continue to agonise over cashbacks, coupons or instant wins, you will no longer worry about the budget. And nor will your financial director!

 

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