Centers of Excellence: Promotion tactics
Neighborhood Retailers Create New Uses for Promotion
Posted by Deborah Martin in Promotion tactics, Shopper Marketing/Retail, Uncategorized, couponing on August 19th, 2010
Just last week, I noted the use of two promotion tactics, traditionally used
by product manufacturers and big retailers, now supporting the service
industry and neighborhood retailers. CVS had a direct mail coupon flyer
with two 20% off coupons — each good on one day only for the pharmacy with
a bonus coupon for talking to the pharmacist, which required his initials.
CPG coupons for the drug store - not new - but a chat with the pharmacist?
The other interesting approach is Discover Card’s promotion of neighborhood
dry cleaning services. Distributed in a full page FSI, Discover Card is
offering five entries to win $1 million if you use your card with a dry
cleaning, tailoring, or laundry service. Interesting idea, promoting an
industry segment of service providers, not a specific brand. I wondered if
they were approached by a national association for dry cleaning to help
promote their members!
What’s next? Meet the accountant, dentist, doctor, personal trainer? Use
your credit card at shoe makers, barber shops, nail salons?
It’s interesting to see traditional tactics morph into a new use. — Bonnie Carlson, President, PMA
NEWS: PMA protects sweepstakes industry in North Carolina law battle
Posted by Rob Fields in Marketing Law, Sweepstakes on July 15th, 2010
The North Carolina Senate and House last week ratified House Bill 80, a law that is designed to close loopholes in the state’s ban on video poker machines by prohibiting “the use of electronic machines and devices for sweepstakes purposes.” The bill is expected to become law with an effective date of Dec 1, 2010. An earlier version of the bill contained language that could have banned instant win sweepstakes and other forms of sweepstakes conducted for marketing purposes, but the bill’s sponsor eliminated that language, after hearing from PMA & others.
The bill bans the use of electronic machines owned by the sponsor or promoter and intended to be used by sweepstakes entrants. It is not aimed at the consumer’s PC, laptop, or mobile device, or at a server or other device for the consumer’s use. It also requires, for the statute to apply, the use of an “entertaining display”, which is basically defined as encompassing the uses associated with video poker and gambling devices.
The intent of the bill was to prevent gambling businesses from hiding behind the veil of electronic sweepstakes, but not to penalize legitimate sweepstakes operations.
PMA was instrumental in helping to modify the language of the proposed bill, protecting our industry. Linda Goldstein and Ed Kabak of the PMA Governmental Activities Council were actively involved in the revision of the law. Thanks also to Ed Chansky, Brian Heidelberger, and Scott Schleifstein for their help in the process.
3.3 Billion coupons redeemed in 2009
Posted by Rob Fields in Promotion tactics, couponing on February 24th, 2010
A recent press release from Inmar indicates that, for the first time in 17 years, more coupons were redeemed in 2009 than the year before. In fact, coupon redemption increased an astounding 27% over the 2.6 billion redeemed in 2008.
Some points to note:
- Brands issued 367 billion coupons in 2009
- Average face value was $1.44
- Internet distribution of coupons was up 92%
- Newspaper-distributed FSIs still account for 89% of all coupons distributed and over half of coupons redeemed
- Face values declined by $0.01, reversing a multi-year trend of increasing values
- Expiration periods were shortened by 10%, despite years of virtually no change
Read the full press release here.
Canadian Company Fined For Misleading Promotional Contests
Posted by Rob Newman in Marketing Law, Promotion tactics, contests on December 8th, 2009
Canada’s Competition Bureau recently announced that Manitoba-based Elkhorn Ranch & Resort Ltd. agreed to pay $170,000 to settle charges that it conducted misleading promotional contests. The company used the contests to promote its time share business and consumers were solicited for participation by phone, at trade shows, and at time share presentations.
The Competition Bureau found that Elkhorn Ranch & Resort failed to fairly disclose the accurate odds of winning, failed to ensure that winners were selected on a random basis, failed to disclose the number and value of prizes, and failed to disclose the end dates and drawing dates. Additionally, the Competition Bureau concluded that the company overstated the value of the grand prize in its contests.
For example, the company advertised that the grand prize was a new SUV, when the prize was actually a one or two-year lease on an SUV for which the contestant was required to pay a security deposit and pledge to return the SUV in “immaculate condition.” In addition, certain participants were contacted and told that they had won a prize, and although the advertising indicated that there was no obligation to do anything in order to claim a prize, the participants had to attend a sales presentation in order to find out the prize they won.
In addition to the $170,000 penalty, Elkhorn Ranch & Resort is required to publish corrective notices in newspapers and on its website and maintain a Corporate Compliance Program. The order also lays out specific requirements with which Elkhorn Ranch & Resort must comply. These requirements serve as useful reminders of some of the key aspects of contest and sweepstakes rules that can help ensure that promotional contests and sweepstakes are run legally and fairly. Specifically, the Consent Agreement requires that Elkhorn Ranch & Resort: i) fairly and adequately disclose age and income requirements; ii) award all contest prizes offered; iii) determine winners on the basis of skill or as the result of a random draw; iv) provide a fixed closing date; v) have contest rules accompany entry materials at all points of entry; and vi) indicate the true value and benefits of the prizes.
These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.
Facebook Issues New Policy Regarding Conducting Sweepstakes and Contests on Website
Posted by Monique Bhargava in Marketing Law, contests on November 9th, 2009
Facebook recently released a revised policy for administering sweepstakes and contests through Facebook. The new policy sets different rules for publicizing contests and sweepstakes on Facebook pages than administering such promotions. Promotions which are administered on a website separate from Facebook (e.g., on the company’s main website) can be advertised on a company’s Facebook page without the need to obtain written consent from Facebook. However, promotions can only be administered through a company’s Facebook page if the company: (1) obtains Facebook’s prior written consent and (2) if the promotion is administered through a platform application.
The new policy prohibits promotions which use “native” Facebook functionality to collect entries. For example, sweepstakes which allow consumers to enter by becoming a “fan” of a company on Facebook are prohibited. Similarly, a contest whereby entrants post a photo on the company’s Facebook page wall would also be prohibited since it uses the Facebook wall function.
If a promotion is administered through a company’s Facebook page, entries may only be collected through a platform application. Thus, a photo contest which allows users to upload photos through a platform application on Facebook is permissible (provided the company secures Facebook’s prior written consent).
Facebook’s policy also prohibits companies from contacting Facebook members for winner notification purposes through Facebook messages, chat or posts on user profiles. Companies may use contact information collected through platform applications to notify winners.
Finally, Facebook has stated that companies are not allowed to post their own terms and conditions applicable to pages, however they may link to a policy which outlines what user actions are permissible with respect to a company’s Facebook page. Such policies may not reserve rights to use a consumer’s posted content or threaten legal action against a user for failure to comply.
TIP: If you are considering administering a promotion through your Facebook page in which you will allow users to enter through the Facebook website itself and not by going to a separate website, you will need to use a platform application to collect user entries and contact information and must contact Facebook to obtain prior written permission. If you plan on using content from users for advertising purposes, only do so if the content was collected through a platform application and you clearly disclose to users that their content may be used for such purposes.
These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.
WEBINAR: A Fresh Look At In-Store Sampling
Posted by Rob Fields in Promotion tactics, Shopper Marketing/Retail, sampling on October 15th, 2009
Back in August, we highlighted the release of the first Report on In-Store Sampling Effectiveness (R.I.S.E.) that was conducted by Promoworks and Knowledge Network/PDI and shows that it’s time to rethink marketing’s approach to sampling.
We’re thrilled two leaders from both of those companies are joining us for a Webinar today to take a more in-depth look at the study and answer your questions about it. The Webinar starts at 2PM EST and will be conducted by Neal Heffernan of Knowledge Networks/ PDI and Jim Rollberg of Promoworks.
New study redefines role and impact of in-store sampling
Posted by Rob Fields in Experiential Marketing, Promotion tactics, Shopper Marketing/Retail, sampling on August 13th, 2009
As marketers seek every opportunity to get closer to their consumer either online or offline, a traditional “old school” marketing tactic has been proven to be more effective and affordable than ever believed possible.
A new study called R.I.S.E (Report on In-Store Effectiveness) was commissed by PMA member Promoworks and the In-Store Marketing Institute, and conducted by research firm Knowledge Networks-PDI. Results of the study include:
- In-store sampling works—driving trial and sales. The average cumulative trial for the sampled items was +58% over 20 weeks. Sampled items in multiple categories showed an average +475% cumulative sales lift on the day of event.
- In-store sampling impacts sales in ways never thought possible:
- In-store sampling drives additional repeat purchase. The average cumulative first repeat purchase for sampled products was +11% and +6% for the brand franchise over a 20 week period.
- In-store sampling drives sales for existing products and line extensions. The sales lift for the existing product sampled was +177% for day of event and +57% after a 20 week period. The sales lift for the line extension product sampled was +919% for day of event and +107% after a 20 week period.
- In-store sampling drives brand franchise trial and sales. The sampling was found to have a significant impact for the parent brand of the sampled products with +107% average sales lift on the day of event and +21% average sales lift after a 20 week period. The average cumulative trial for the brand franchise was +19% over a 20 week period.
- In-store sampling delivers new buyers - to the sampled items and to the brand franchise1.The average cumulative new buyers for sample products was +85% and +23% for the brand franchise over a 20 week period.
- In-store sampling increases the average household shopping basket size. As a result of the sampling event the involved consumers’ overall shopping basket expenditure increased +10%, as compared to the average frequent shopper basket in the participating retailer. This suggests sampling contributes to incremental growth and does not cannibalize other items within the brands’ own franchise.
- In-store sampling impacts sales long after the day of event, making it incredibly cost effective. By utilizing frequent shopper data, the actual sales impact of the in-store sampling can now be measured. Over the 20-week period, the sampled items saw an average cumulative sales lift of +74%. In-store sampling’s cost effectiveness when applied to all of sampling’s benefits over time is extraordinary.
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