Running a promotion can be a fantastic way to draw attention to your business and drum up interest. Limited time offers and contests can help to attract potential customers, and reward the clients who are loyal to you. If you run a promotion in your office, such as a sweepstake, this can be a good way to boost morale.
However, there are some pitfalls that you may encounter when running a promotion that could leave you out of pocket and reluctant to run a similar campaign in the future. But don’t despair - there are ways to ensure that you understand your audience and can run your promotions confidently, getting the most out of them.
Here, we take a look at the advantages and disadvantages of running a promotion, while also thinking about ways of understanding your audience. We will also explore why promotion insurance is vital, and how you can protect your promotions with promotion insurance.
Running promotions can have a variety of benefits for your business. You will be able to market to a very targeted audience (such as your existing email list or social media following), making it a more cost-effective strategy than a broader marketing campaign. Because you may be targeting existing or interested potential customers, this could mean you benefit from richer rewards.
A sweepstake or contest can not only appeal to existing customers, but also to those who have lapsed - it will not only encourage people to take part in your promotion and engage with it, but it may increase sales or interest simply by reminding customers that you are there, and what you have to offer.
Because a promotion can be targeted, you will be able to reach the kinds of groups who will be more interested in your promotion and can focus on areas where you are more likely to receive positive interactions and results.
Not only this, but running a promotion (which is a highly attractive form of marketing) gives you a good idea of who is interacting with you regularly, and how this changes during a promotion - providing valuable data analytics. This can be helpful both for future campaigns and for how you approach potential customers generally.
There are some risks associated with running promotions, and many of these can come down to legal issues. In most parts of the world, there are strong regulations around promotions such as contests and sweepstakes. In order to avoid falling foul of these issues, you should ensure that the promotion is structured in such a way that it cannot be characterised as a lottery. For something to be a lottery, it must involve consideration, chance and a prize. By removing the consideration element from your promotion, you generally reduce the likelihood of your promotion being miscategorised as a lottery.
There are some less legally based risks when it comes to running a promotion. While they might engage some existing or lapsed customers, they can equally upset your loyal customer base. If you are running a cashback or discount promotion, this could lead to existing customers who have not benefited from this becoming upset and less loyal to your brand.
A promotion also runs the risk of drawing in low-quality interest - while you may get a boost of initial interaction, new customers might not actively engage with your product or service which may lead to you neglecting current customers while trying to attract new ones.
If you reduce your risks by gaining a better understanding of your customer base, you will be able to offer headline rewards as you will be more certain of customer engagement - and will not create a campaign that falls flat due to lack of interest, leaving you with financial losses to contend with.
However, it is not always easy to know exactly how to do this - and that’s where promotion insurance can help you.
If you run a business of any kind, you will be well aware of the many issues that you can encounter, and that the correct insurance is a must-have for so many things in order to protect your assets and even your reputation. However, did you know that you can also protect your promotions?
When running a campaign, you need to think about protecting yourself and any potential problems that may come up. Promotion insurance is a way of managing the risks associated with running a promotion.
This kind of insurance protects your promotion by guiding you in only making offers that you are able to cover financially. One of the pitfalls of larger-scale promotions is offering a prize (or a cashback option) that is beyond your financial abilities. Promotion insurance will also help you to evaluate the likelihood of your promotion being engaged, so that you do not create a promotion that fails entirely, leaving you with wasted time and money for little to no return.
Perhaps most importantly, promotion insurance will cover a set amount of costs for your promotion from the outset, reducing your risk even further. This means that you will never be left unable to provide promised prizes, saving you public embarrassment and bad press.
Through a combination of these things, promotion insurance is essential for any business thinking to advertise and market in this manner - especially if you are offering larger headline rewards.
Promotions of any kind can be fantastic for your business, whether you are running a sweepstake, a contest, or a different kind of promotion altogether. As employee incentives and staff rewards or as part of your marketing strategy to reach a wider audience, running promotions have so many benefits.
If you want to be able to run your promotions with confidence, then having the right promotion insurance is essential. iGo can help you to run safe and secure promotions with our promotion insurance, with years of experience helping brands. So get in touch to see how we can support you and make sure your promotions are smooth and successful.