Why Should My Promotion Use Promotional Risk Coverage?
When it comes to launching a promotion, every company has broad goals that typically focus on customer acquisition, brand awareness, and product sales. The specifics of the promotion – the mechanism of entry and the incentive – are what make you stand out in a competitive marketing landscape and leave an impression with your target audience. The impact of your promotion is limited only by your creativity and the resources to get the promotion off the ground. While creativity has no bounds, your budget certainly does, which can potentially limit the incentives you can offer your customers.
The challenge for companies and marketers is finding a 'carrot' that resonates with consumers. In a media-saturated marketplace, it's becoming increasingly difficult to stand out from the crowd. Offering cash and other grand prizes is a great way to start, but after designing an amazing promotion, the budget might not allow for an attention-grabbing prize.
So, how can you offer a larger-than-life prize? By utilizing promotional risk coverage. Using nearly 30 years of past promotion data, SCA Promotions calculates the odds of a prize being won, and you only pay a percentage based on the odds, typically between 3-15%. If someone wins, SCA gives you the money to award the prize. We have covered billions of dollars in cash and prizes and paid out over $183 million, so you can rest assured that you will not have to pay the winner out of your pocket.
A promotion incorporating promotional risk coverage has been a concern for some companies, who are worried that their audience will only respond if a prize is guaranteed to be awarded. The lottery provides a fair reference for comparison, and studies show that consumers display the opposite behavior – in fact, their willingness to purchase lottery tickets swells as the jackpot grows, even though their odds of winning plummet. When the jackpot rises, the added attention draws consumers in.
On November 28th, 2012, the Powerball game offered a record jackpot of $580 million. 281 million tickets were sold for the chance to win this jackpot. Eleven days earlier, Powerball featured a $214 million jackpot and sold only 35 million tickets.
We won't claim that your promotion will achieve hundreds of millions of responses, but time and time again we see that dangling a carrot motivates people to act – and the bigger the carrot, the greater the response. If you're ready to see the traffic and sales that a promotion with prize coverage can create, contact us today.
By working with companies big and small, you can be sure that we have the tools to match the goals of your promotion. Your promotion will be customized for you, ensuring that you have a manageable fixed-cost promotion that targets your ideal customers. And, we do it all while leaving the majority of your budget for marketing the promotion, rather than paying for the grand prize.