Three Ways Promotional Risk Coverage Can Improve Your Promotion

Promotional risk coverage can save your bacon and improve your promotional campaign. It allows you to offer people a chance at winning big ticket items, but doesn't mean you have to have a big ticket budget.

Here are three ways promotional risk coverage can help marketers offer huge prizes without having to flee the country if they ever paid out.

1. Because Someone Will Eventually Win
While the odds of being struck by lightning are only slightly better than winning the lottery (or worse, depending on your outlook on life), the odds of winning a small contest at a local event are much, much better.

For example, an annual golf fundraiser includes a new car if someone hits a hole-in-one on the 9th hole. While it may seem like a good idea to save money by not actually paying for the car first, keep in mind that the United States Golf Register says that the odds of a hole-in-one are anywhere from 1 in 20,000 to 1 in 33,000: much lower than the risk of being hit by lightning.

So what happens if a golfer hits that 1-in-33,000 shot? While every marketer loves the attention that the contest brings, none of them want to think about what will happen if someone makes the shot, and they did not have the car covered.

Promotional risk coverage will cover the possibility of someone hitting the winning shot. In this case, the risk is placed with an insurance company, and the marketer pays a small fixed fee. If a contestant wins the prize, the promotional risk coverage kicks in, and the insurance company covers the difference.

Rather than risking the cost of the car in a contest, for a fraction of the prize value, the promotional risk policy gives peace of mind to the organizers and prize providers.

2. Because You Need to Make a Big Splash
In cases where a campaign needs a high-value prize, but there is no room in the budget, promotional risk coverage makes it possible.

For example, in some fast food contests, the restaurant will offer several million dollars in prizes, but they are counting on the fact that not every prize will be redeemed, and the total prize value will not be reached. However, there is a careful balance between gambling that not all the prize money will be claimed, and having enough in the budget to cover it.

If a marketer wants to offer $500,000 in possible prizes, but believes that only $300,000 will be collected, a promotional risk policy could cover the difference if contestants actually collect on all the prizes. This allows the marketer to make a bigger splash with the contest, entice more customers to play, and still cover all costs should the unexpected occur.

3. Because You May Get More People to Enter
A similar promotional risk strategy is necessary for coupon programs, rebate offers, and even free music downloads.

For example, a marketer wants to launch a free music download program, and has budgeted for 50,000 redemptions of the song. However, the campaign is a wild success, and there are nearly 90,000 redemptions of the music. This means the marketer must come up with the licensing fees for the additional 40,000 songs.

Of course, if she had purchased promotional risk coverage, for a set fee, she could cover any possible overages, without incurring any anger and wrath from customers for canceling the promotion unexpectedly, or risk losing her job because she did not plan accordingly. In this case, promotional risk coverage removes the risk of a larger-than-expected redemption rate, and helps keep costs under control.

These three promotional risk strategies can help marketers keep marketing costs under control, allow for small campaigns to become big ones without risk of staggering losses, and even cover an unexpected success. For more information and to implement this type of campaign, it is important to speak to a promotional risk coverage specialist.

A Mobile Promotion Without Promotional Risk

A Mobile promotion is an excellent way to reach today's Generation Y customers through modern technology. A recent report — that any mobile promotion professional should read — showed that global data traffic exceeded an exabyte of data in 2009. That's 1 billion GB.

All told, there are 4.6 billion mobile phone users around the world, with a penetration rate of 68 percent. This is why mobile promotion strategies are so important in today's marketing world. In fact, mobile promotions may be one of the best marketing tools to come along in decades.

A mobile promotion doesn't require the traditional process and costs we've become accustomed to paying. No shipping, no packaging, no worrying about what to do with thousands of leftover tchotchkes.

That's because a mobile promotion is digital. Now, instead of giving out swag, you can give customers music downloads, movie promotions, special ringtones, and mobile games. Now, rather than sending out direct mail to people who might not be ideal customers, you can send out SMS messages to existing customers and people who sign up for your text club — people who want to hear from you. Everything is happening virtually, which means you don't have to worry about storage space

Of course, before you go planning your next campaign, make sure you include promotional risk coverage in your budget.

Promotional risk coverage is basically promotional insurance that makes sure you don't overextend your marketing budget or get yourself into a lot of trouble.

Let's say you wanted to run a contest where someone could win $100,000. The odds of someone winning are pretty remote, but what would you do if someone did win, and you didn't have $100,000? That's where promotional risk coverage saves your bacon.

Promotional risk coverage is also helpful to mobile promotion campaigns. It protects your campaign from over redemption on special gifts and downloads.

Let's say you've arranged with a music label to offer 5,000 downloads of their artists' songs as part of your mobile promotion campaign. But the stars align for you, the promotion takes off, and you end up with 15,000 downloads.

In the first week. And you've got four more weeks to go.

Most people would shut down their campaign right there, desperately hoping to cut their losses. That's where promotional risk can save you. Since it insures against instances like this, you're covered. The music label will still get paid, you can allow the mobile promotion to go on, and you gain more customers than you ever imagined.

We saw this happen in 2009, when Indianapolis-based Marsh Supermarkets ran a coupon promotion on Facebook, where they gave a $10 coupon for any purchase of more than $10... including $10.01.

They had 2,200 fans on Facebook, so the promotion should have cost $22,000. But 45,000 people redeemed the coupon. Marsh canceled the promotion, which angered a lot of their customers, and they took a big hit in the media.

But the biggest hit was the $450,000 in over redemption of the coupons — $428,000 more than they had expected. While they did generate a lot of resentment on the part of their customers, that was minor compared to what they could have lost if they hadn't shut off the promotion.

While it wasn't strictly a mobile promotion, it was a great example of why someone needs promotional risk coverage. Imagine if the same thing happened to your mobile promotion campaign. What would you do if customers were passing the free download codes to their friends? Would you cancel the campaign? Would you risk the backlash from your loyal customers who didn't get a chance to redeem their songs, just because a few people ruined it for the rest of them?

So is it a matter of people being irresponsible and greedy? Or did a mobile promotion succeed beyond our wildest expectations, and we didn't plan accordingly? While we like to think it's the latter, it's still hard to plan accordingly. No matter how wild our expectations are, we can't always see every possibility. That's where promotional risk coverage would have saved our mobile promotion campaign. And our bacon.

Customer Loyalty Programs Using Promotional Risk Coverage

Your promotion budget can be fixed to increase customer loyalty with digital promotions including promotional risk coverage. It is worth the risk, but you don't have to take it. Promotional risk coverage protects your promotion budget from over redemption and assists you in fixing your advertising and marketing budget. Promotional Currency is THE leading digital promotions firm, merging digital technology, artist licensing and promotional risk coverage to deliver turnkey, fixed-cost solutions for the promotional marketplace. Ask us why you can afford large prize offerings including digital promotions on a budget. Fix your promotion budget with Promotional Currency, THE Digital Promotions Authority. http://www.promotionalcurrency.com

Promotions Using Promotional Risk Coverage to Build Customer Loyalty

Promotions budget solution to increase customer loyalty starts with digital promotions including promotional risk coverage. It is worth the risk, but you don't have to take it. Promotional risk coverage protects your promotion budget from over redemption and assists you in fixing your advertising and marketing budget. Promotional Currency is THE leading digital promotions firm, merging digital technology, artist licensing and promotional risk coverage to deliver turnkey, fixed-cost solutions for the promotional marketplace. Ask us why you can afford large prize offerings including digital promotions on a budget. Fix your promotion budget with Promotional Currency, THE Digital Promotions Authority. http://www.promotionalcurrency.com

A Promotion Budget Including Promotion Insurance Can Save Your Job & Reputation

Planning your promotion budget may just be the thing that saves your job, when you remember to include one very important item: Promotional Risk Coverage.

Let's say you want to launch a promotional contest that offers a large cash prize. You know that giving away $20 isn't going to get anyone's attention, but you're worried your promotion budget can't handle giving away a free car either.

Or can it?

That's where promotional risk coverage becomes an important addition to your promotion budget. Basically, you insure your contest against someone actually winning the prize.

Let's say you're running a contest at your Chamber's annual golf outing, and you're giving away a new car if someone hits a hole-in-one on the 14th hole. You decide to save on your promotion budget by risking that no one will actually hit a hole-in-one. After all, the odds of someone actually hitting it are quite high — the United States Golf Register says it's anywhere from 1 in 20,000 to 1 in 33,000.


Pretty decent odds. You could probably offer the car, knowing that no one will hit it. But what if they do? What if someone makes that 1-in-33,000 shot? It could happen. People get lucky all the time, so why not at a golf contest where the hole-in-one prize is a $25,000 car?


That's when your promotion budget, your job, and possibly your company, are in the toilet. That's when you wish your promotion budget had promotion insurance.


You can see examples of smart promotional risk coverage all the time, in big prize contests both online and offline. And in most cases, those companies didn't have the big promotion budget to give away that new car, trip to the Pro Bowl, or a brand new house. Sure, those companies are hoping that no one wins those big prizes. But they're being very careful in case someone does.


Promotion insurance only costs a fraction of what the actual prize is worth. It's based on the value of the prize, the odds of someone winning, and the number of chances a customer gets to win. A promotion budget expert in promotional risk coverage will suggest a promotion — and a prize — that will fit within your promotion budget.


Promotional risk coverage is also important to prevent over redemption of your coupon offerings, and insures a bad contest doesn't get worse. That's when your promotion budget can really take a hit.


Case in point: Marsh Supermarkets is a small chain in Central Indiana. Last summer, they ran a Facebook coupon campaign that gave $10 off any purchase of more than $10. Coupons were given only to their Facebook fans. There was no real promotion budget, no planning, and no legal disclaimers in case they needed to end the campaign early.


Some marketing experts described what happened next "like that episode of WKRP in Cincinnati where they threw turkeys out of the plane."


The store had 2,200 fans on Facebook, so at most, the campaign should have cost $22,000. But people over-redeemed the coupons — 45,000 or so — for a purchase as low as $10.01. (Remember that the coupon was for any purchase over $10.) So Marsh canceled the promotion after a few days, and angered a lot of their customers.


Lesson number 1 is that you always need to talk to someone in marketing risk management with experience in prize insurance, before running a major contest. But lesson number 2 is you need to make sure your promotion budget includes promotional risk coverage.


While we don't know if they had any promotion insurance in their promotion budget, this could have at least mitigated the losses the store experienced. If they had spoken to a promotional risk coverage professional first, they might have avoided a lot of the problems and backlash they experienced.


As you can see, including promotional risk coverage in your promotion budget will not only let you run a bigger campaign, but in the case of Marsh Supermarkets, can save your reputation and your job.

--Julie Ross, Rostin Ventures

Digital Promotions Including Promotional Risk Coverage Roll With The Moment

Your digital promotion budget solution to increase customer loyalty starts with digital promotions including promotional risk coverage. Promotional Currency is THE leading digital promotions firm, merging digital technology, artist licensing and promotional risk coverage to deliver turnkey, fixed-cost solutions for the promotional marketplace. Ask us why you can afford large prize offerings including digital promotions on a budget. Fix your promotion budget with Promotional Currency, THE Digital Promotions Authority.

Promotional Risk Coverage Magnifies The Impact Of Your Marketing Promotions

Promotional risk coverage eliminates the budget uncertainty associated with offering large prizes, attractive coupons, and generous rebates and premiums to your market. It gives you an opportunity to launch exciting marketing campaigns through which you offer high-value promotions that would otherwise lie beyond your budget. Such promotions attract attention. They excite people and generate an enormous response. As a result, you'll enjoy a higher volume of in-store and online traffic, a surge in customer registrations, and a growth in sales.

As the economy continues to struggle, it is more important than ever that you stretch your marketing budget. Moreover, competition is increasing within every space. You need to have a way to differentiate your brand and products to an audience that is bombarded with promotional offers. Promotional risk coverage helps you to design exciting contests and games whereby consumers have a chance to win bigger and more compelling prizes. And you'll be able to do so at a fraction of the prizes' value.

Promotional Risk Coverage Protects You From Budget Overruns

Suppose you have a marketing budget of $15,000. You want to design a promotional contest that gives your customers the chance to win a $500,000 prize. The prize value is obviously much larger than your budget; it seems out of reach. Promotional risk coverage makes this type of contest possible.

The risk is placed with an insurance company. To outsource the risk, you would pay a small fixed fee. If a contestant wins the $500,000 prize, the promotional risk coverage takes effect and the insurance company steps in to cover the difference.

This same risk mitigation strategy can be easily integrated with your coupon programs, rebate offers, and high-value premiums. For example, suppose you want to launch a coupon program that carries a redemption value of $750,000 on a popular brand of deodorant. With a $15,000 budget, this may seem all but impossible. Promotional risk coverage makes this type of high-impact promotion possible by removing the risk of a larger-than-expected redemption rate.

When you notice your competitors offering staggering chance-to-win prizes of $1 million, it is not because they have a $1 million marketing budget. Chances are, their advertising budget is limited. They are able to design these exciting marketing programs because they are using promotional risk coverage to extend their impact. You can take advantage of the same opportunity.

Advantages Of Promotional Risk Coverage

The obvious advantage of promotional risk coverage is that it amplifies the impact of your marketing budget. It stretches every dollar. In reality, the benefits extend much further.

First, large prizes, coupons, and premium offers attract attention. They generate excitement and encourage consumers to participate. That gives you a chance to penetrate new markets, establish a presence, and improve brand awareness.

Second, by designing high-impact programs, you'll quickly build a customer database that you can mine for future marketing campaigns.

Third, programs that leverage promotional risk coverage to offer massive chance-to-win prizes inevitably increase sales. This is due to the exposure you'll enjoy as your customers get excited about the prizes.

Creative Marketing Campaigns With Promotional Risk Coverage

A lot of companies use promotional risk coverage to launch contests, games, and marketing programs at a fraction of the prize or redemption value. With a little creativity, you can design promotions that leverage this risk mitigation strategy even further.

For example, suppose you would like to launch a promotion that awards a $25,000 guaranteed prize. Promotional risk coverage will not cover guaranteed prizes, but it can eliminate the budget uncertainty of chance-to-win prizes, coupons, and high-value premiums. Instead of dedicating your budget to a $25,000 guaranteed prize, why not design a promotion that blends multiple types of promos? For instance, offer a $5,000 guaranteed prize, a $100,000 chance-to-win prize, and a $250,000 coupon program. Promotional risk coverage gives you the flexibility to design this type of creative marketing program.

Brand Differentiation With Promotional Risk Coverage

Differentiating your brand and products will always represent a major competitive advantage for your company. The challenge is using a strategy that excites your customers while keeping a tight rein on your advertising budget. Promotional risk coverage lets you offer high-value prizes, coupons, premiums, and rebates without concern for going over budget.

Would you like to generate excitement in your market by offering consumers a $500,000 chance-to-win prize? You can do so at a fraction of the prize value. Want to launch a $250,000 coupon program to stimulate a response and attract new customers? Doing so is easy at a small percentage of the program's redemption value.

Invest the time to explore how promotional risk coverage can help you engage your audience, excite your market, and catapult your sales.

--Cynthia Walker, Promotional Currency

Use the promotional strategy that allows you to give away millions of dollars in cash and prizes. Promotional Currency's proprietary promotional risk coverage service is a powerful tool that enables you to super-size your promotional programs. Along with incorporating promotional risk coverage into all of their digital incentive product offerings, Promotional Currency helps businesses manage their risk on redemption-based promotions. Protect your company from promotional risk.

Digital Promotions with Promotional Risk Coverage

Digital Promotions with promotional risk coverage allows your company to launch high-impact promotions at a
fixed cost. Have you ever wondered how your competitors are able to offer $1 million
prizes? Have you ever watched in dismay as seemingly smaller companies in your
market are able to engage your customers with large-value premiums? How can their
marketing budgets possibly handle the potential redemption volume?

Your competitors are relying upon promotional risk coverage in order to stretch the
marketing reach of every promotional dollar. They are offering customers a chance to
win valuable prizes and premiums at a fixed cost. They are launching exciting rebate
and coupon promotions without fear of going over budget, even if those promotions
become runaway successes.

You can do the same. You can leverage promotional risk coverage to inject a new
level of excitement into your market without worrying about cost overruns.

In this article, you'll discover how over redemption coverage eliminates budgetary
uncertainty. We'll explain how promotional risk coverage works and how you can use
it to plan each of your marketing campaigns to the penny. You'll also learn how to
launch large-scale promotions with high-value prizes while paying a fraction of the
associated cost.

Over Redemption Coverage Eliminates The Risk Of Uncertain Outcomes

Imagine this scenario: You have launched a promotion to build awareness about a new
product among millions of consumers. To do so, you're offering a tie-in premium with
the purchase of a well-known, entrenched brand. The problem is, your budget can only
handle a 20% redemption rate. If response to your promotion exceeds 20%, it will
decimate your budget. How can you launch this type of promotion given the
uncertainty of your market's response?

Promotional risk coverage eliminates that uncertainty. It provides financial
protection in the event that your promotion's redemption rate skyrockets. You'll
enjoy the marketing advantages of a high response to your promotion while
dramatically limiting your cost.

How Promotional Risk Coverage Works

The lever that allows you to offer high-value prizes, premiums, and coupons without
the risk of devastating budget overruns is insurance. Your promotional risk coverage
is provided by an A+ insurance company. The insurance company assumes the risk of
awarding prize winners and the costs associated with higher-than-anticipated
redemption rates.

It's important to realize that promotions offering guaranteed prizes cannot be
shielded with promotional risk coverage. The coverage is based upon odds. Once the
insurance company calculates the odds of a high-value prize being awarded, they'll
quantify the risk and extend coverage for a fixed fee. Odds are also calculated for
redemption rates of premiums, coupons, and rebates.

Promotional Risk Mitigation Protects Your Marketing Budget

Your company's marketing budget has limits. The challenge is to work within those
limits while squeezing the most value from your promotional campaigns. Promotional
risk coverage preserves your budget and lets you plan your marketing costs to the
penny. It gives you the flexibility to launch promotions that deliver a stunning
impact to your market without assuming the risk of over-redemption or awarding
winners. Your budget is protected. Whether your customer wins a $1 million dollar
prize or your premium redemption rate hits 100%, promotional risk coverage shields
you from the financial risk.

Promotional Risk Coverage: Large-Scale Promotions At A Fraction Of The Potential Cost

Games and contests that offer consumers a chance to win prizes with a high-perceived
value attract enormous attention. The bigger the prize, the higher the response.
Without promotional risk coverage, these types of promotions would be all but
impossible to launch without assuming an inordinate level of risk.

For example, suppose you wanted to launch an on-pack promotion on a popular brand
through which customers could redeem a coupon for a free tank of gas. Further
suppose you don't have the financial protection of promotional risk coverage. What
would happen if one million consumers redeemed your coupon? Could your budget
withstand the expense?

Promotional risk coverage allows you to launch these types of marketing campaigns
without worrying about your budget imploding from a higher-than-expected response.
It delivers the marketing exposure at a fraction of the potential cost.

Leverage Promotional Risk Coverage For Your Business

Can large-impact promotions with high-value prizes help your company build brand
awareness while motivating a market response? Consider these findings...

According to eMarketer, "The chance to win is the number one most effective tool to
motivate consumers to participate in permission-based marketing efforts."

According to Jupiter Research, "82% of consumers will provide private information in
exchange for the chance to win."

Promotional risk coverage lets you launch high-impact promotions with budget
certainty. It lets you stretch your marketing budget while generating awareness and
prompting a response from your customers. Expand your brand; educate your market;
excite your customers; drive sales. Promotional risk coverage protects you
financially while helping you accomplish all four goals.

--Cynthia Walker, Promotional Currency