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Is your marketing ‘spray and pray’? Or do you use a sniper-rifle? The science of consumer competitions.

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A well thought out sales promotion is an integral part of an overall marketing strategy.

While the ‘spray and pray’ approach may tempt time-strapped business-types, it’s the highly-targeted campaign that will see you achieve the Holy Grail of promotions: high conversions.

One of the more popular techniques for a targeted promotion is a competition, but only if the prize reflects the needs of the customer.

So, before splashing the cash on ‘Free MacBook’ or ‘Free Speedboat’, consider the following tips:

Tip #1: Know your audience

Say the person running a promotion is a gym junkie. It doesn’t mean gym memberships are the best incentive for the target audience. Shelve personal preferences and match a popular, useful prize to the intended target for the best participation rates.

Tip #2: Get the legal bits right

Some promotions require permits. Knowing the difference between a game of skill and a game of chance may be the only thing between you and hot water.

A game of skill is a judged competition; a game of chance is when winning is entirely random. Asking a few questions does not constitute a game of skill as you’re 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’s best to speak to a promotional marketing lawyer or a specialist promotional marketing agency for up-to-date information.

Promotions need terms and conditions. They protect both the promoter and the agency. The T&Cs are a contract; once finalised, it can’t be changed or altered without alerting the relevant permit authorities. For example, if a winner is called and doesn’t answer, it doesn’t automatically mean the next person on the list should be contacted.

Tip #3: The science behind prizing

Consumers expect a high perceived chance of winning to make it worth entering the competition. However, their perception may differ from what you’d expect.

According to the IMI Consumertrack 2011, three prizes are better than one – no surprises there. Meanwhile, more than three prizes doesn’t boost predisposition to participate.* (Unfortunately the same thing can’t be said about your costs).

Consumers have a strong preference for instant gratification over delayed rewards by around 5 to 1.* Research shows that drawing prizes throughout the promotion packs more punch 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 less likely consumers are to enter.

Many of us have experienced entering a competition through answering a number of questions only to find the final step 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 if the process is perceived as too complicated.*

Tip #5: Manage winners’ expectations

Although many prize-winners will be elated to have won, some may be impossible to please.

This is where T&Cs can help. They should include a clause that refers to any changes to the prize not being permitted unless consent is given by the promoter and 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.

Promotion opportunities include on-pack, in-store, consumer magazines, online publications, and social media. Be specific about which channels you’re targeting and why – that means researching your demographic’s media consumption habits and directing your efforts accordingly.

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 lend your expertise in the early stages.

*IMI Consumertrack 2011: IMI International specialises in researching what consumers want in this area.

Alicia Beachley is the CEO of Apirl5, a specialist promotional marketing agency that provides Director level input, support and personal attention to all clients throughout the process. Alicia has over 14 years experience in running promotions across a broad range of clients. She has witnessed the best and the worst.

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