Promotional Risk Management - Top Tips For Marketers

Ensuring that you have the right contingencies in place when calculating your promotional marketing risks can never start too early. After all many a sleepless night is caused when brands, agencies, and the companies they represent fail to consider the risks associated with promotional marketing.

Successful promotional marketing will see brands products literally fly off the shelves into the waiting shopping baskets of eager customers. Unfortunately the cost of honouring the latest successful offer can quickly escalate if brands were not properly prepared in the first place. Promotional marketing risk management can save brands a ton of money.

The first thing to understand with promotional risk management is to know the maximum number of people that can possibly enter your promotion; this is called the promotion universe. Next you need to consider how many people you expect to physically take up the offer which is known as the expected redemption rate. To get a better handle on this you need to know how the customer can redeem your product. The following key points will help you:

Brand Profile

Understanding the personality of the brand being represented is key in knowing how well received the promotion will be in the marketplace. For instance a t-shirt with a retro logo design from a high profile soft drinks company may be very well received where a similar offer from a paper manufacturer may not go down quite so well.

The Type of Product

Loyalty and usages rates vary by whichever market sector your product falls into. For example tea and coffer collector scheme based promotions do very well as those types of products have a very loyal following and there is a high usage. The same could not be said for frozen ready meals for example.

Historical Results of Similar Promotions

Every promotional campaign is different with it myriad of unique bespoke elements. Analysing similar promotions that have run in the past may not be relevant as what worked in the past may not do so this time around, for example, promotions based on fashion and celebrities.

Method of Communication

If a customer has taken time to sit at home and enter your web based promotion then you can bet that your campaign will have a high redemption rate, this is mainly due to the effort the customer has taken to enter your campaign as opposed to briefly seeing it whilst rushing around the local supermarket or shopping mall. It is important to consider where the offer is placed wither that be on the product pack, a leaflet, or as previously mentioned on a web site.

Additional Media

Surprisingly uptakes of promotional offers on TV advertisements or bill boards do not directly affect redemption rates. Great redemption rates are found in those promotions that offer taste challenges or try-me-free.

Confirmation and Proof of Purchaser
In a lot of case promotional campaigns insist on some method of proof of purchase. This can take the form of collecting tokens from the product pack, a unique number from a ring pull, or in some cases a till receipt. Beware though that many people see till receipts as personal information as this type of proof of purchase can work against you.

I hope that the tips provided above will help you consider the various factors involved with promotional marketing risk assessment and aid your daily management of promotional campaigns.