Promotional Risk Coverage allows you to give away millions, without any liability associated to your promotion budget. The strategy behind marketing promotions, which include promotional risk coverage, is simple. It enables companies to differentiate brands in a very competitive market. Promotional risk coverage could provide your company with the means to give away millions in cash or large prizes. Your prize offerings are based on the odds of a winner claiming the prize. As long as your promotional strategy does not include a guaranteed prize offering as the only prize, your company can include promotional risk coverage with the promotion.

Promotional risk coverage can be found in promotions like you see on television, hear on the radio, read in newspapers or magazines, and see online or in internet promotions. They offer the consumer a chance to win, and when there is a winner, your company is protected against having to pay the winner. Much like you insure your car from an accident or your home from a natural disaster, you can cover your promotion against a risk associated with the liabilities of giving away large valued prize amounts. The cost of promotional risk is minimal, literally a fraction of the prize value, and is based on the promotional odds, the prize value, and the number of chances given to win the promotion – allowing you to deliver a huge incentive at a fixed cost that will never blow your budget.

Promotional risk covered promotions open up possibilities to offer larger prizes than most companies can afford, or would want to take promotional risk on. These large prizes are proven to increase registrations of online users, traffic in stores, and sales at any given time. Strategies including promotional risk coverage also build large brands through consumer loyalty. Everyone appreciates winning something, people enjoy watching others win, and everyone remembers who was offering the big prize.

Protect your company from promotional risk.

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, they help businesses manage their risk on redemption-based promotions. By analyzing the odds of redemption and then placing the risk with an A+ insurance company, Promotional Currency can provide your brand with a fixed-cost solution that amounts to a fraction of the actual promotional value. And should over-redemption occur, Promotional Currency will cover the cost – whatever the value of the prize, rebate, coupon or premium.

Read Case Studies: Sara Lee Royal Bank of Canada®
Benefits

• Offer High-Value Incentive for Fraction of Retail Cost
• Receive Fixed-Cost Solution that Ensures Budget Certainty
• Protect Your Company from Over-Redemption Expenses
• Eliminate Promotional Liability from Your Books

written by jross \\ tags: digital music promotion, digital music promotions, digital promotion, Digital Promotions, Music Download Promotions, promotion insurance, promotional insurance, Promotional Risk, Promotional Risk Coverage, promotions insurance

This time of year, NCAA® March Madness is everywhere. Bracketology, or the analysis and prediction of the tournament’s brackets, is now entrenched as a rite of spring.  One of the great aspects of the tournament is the dramatic upset. You know, some team defies the odds and beats a team they should not.  Great article last week about historical upset rates, check it out here: http://www.cbssports.com/collegebasketball/story/13063296/bracket-science-searching-for-likely-upset-victims-victors.  If you like lots of statistics, it is a good read.  If you don’t, here’s the summary: the rate that a lower rated team “upsets” a higher-rated team is historically nearly 1 in 5 (19.9%).  The selection committee spends all those many hours trying to create accurate seedings, but there are things that simply cannot be accounted for and predicted.  Sure, there will be upsets, but where will they be? If you could figure out how to make a bracket “upset proof”, I could show you how to win a lot of contests (and fabulous prizes).

Want more proof? Of the 16 remaining teams in this year’s tournament, 5 were seeded at 6 (out of 16) or below.  Based upon their initial seeding, nearly 32% of them should not be left in the field. Predicting performance in a dynamic environment is tough because many unexpected things can happen.  I saw a report that out of roughly 4,700,000 brackets submitted at ESPN.com, exactly 12 had correctly predicted the remaining 16 teams.  Bracketology is fun.

This reminds me of the practice of trying to predict outcomes in response-based promotions (well without all the brackets, trash-talking amongst friends, prizes and things).

Sponsors implement a response-based promo and try their best to predict the outcome and related budget impact.  Have historical information on a similar promotion great, that can be helpful.  Only problem is, what marketers are challenged to go out and implement the same programs over and over again?  Everyone wants to do something new and fresh.  New and fresh is great, but new and fresh make forecasting more challenging.   What happens when redemptions outpace budget (an upset)?  Uh oh – bracket-busters in real life aren’t as much fun.

The good news is that it is possible to find partners to step in and fix promotional risk, and make your promos “upset proof”.  We are one such partner here at Promotional Currency.  Little known secret, but in the scheme of things, promotional risk coverage is surprisingly affordable.

“Upsets” happen in promotions, just like in the NCAA Basketball tournament.  The key is being able to protect yourself when they happen, because they are awfully hard to predict.

Are your promotions upset proof?

written by Steve \\ tags: Promotional Risk Coverage

In business, people cover their risks. Ask a risk manager about the coverage options: property, casualty, liability, errors/omissions, workers compensation, the list is extensive. It makes good sense to protect yourself and cap liability, you know, just in case something bad happens, like a fire or worse, some sort of defective product or service makes it into the marketplace under your name. When it comes to promotions though, it is amazing to me the number of marketers who are suddenly willing to take their own risk. I had a client just this week that started to strongly consider taking a multi-million dollar risk themselves. As scrutinized as budgets are these days,that sort of thinking is a bad idea more often then not, and here’s why: Say a company wants to offer 10,000,000 $2 off coupons. Sure, they are only expecting 500,000 to be used, but in this post Madoff/AIG world we live in,they have to reflect the whole entire $20,000,000 liability on their books until the redemption period is over. A line item that size will definitely create a little disparity on a balance sheet. Now, the probability of this coupon redeeming at 30% are much, much greater than say, your office building burning down, yet the company buys coverage for this fire scenario, but is fully ready to take a chance on $6,000,000 promotion risk ride… After all, taking risks always works out for Danny Ocean and his crew.

Doesn’t it make more sense to protect yourself (and when I say yourself, I mean you, your budget, and your job) from something that could potentialy wreck all three? In the end, the aforementioned client agreed with my position, and decided to secure the redemption risk. While I am not certain whether their promo will meet their goals of increasing trial, but I do know my client won’t lay awake at night worrying about over-redeeming coupons, and I also know that the next 10-Q will not be weighted down by someone’s decision to “let it ride”.

written by Steve \\ tags: Promotional Risk Coverage

Force multiplier as a military term, refers to a combination of attributes or advantages which dramatically increases (or “multiplies”) the effectiveness of an item or group.

Most multiplayer games involving teams and combat include aspects of force multiplication, either as a player class, skill set, or specialized gear. On its own, a force multiplier is not particularly dangerous or effective. When added to an existing unit and used properly, they effectiveness and skill of that team increases (multiplies) dramatically. In PVP, the teams that recognize and leverage the power of force multiplication are generally the most feared (and effective) ones.

PVP teams in some ways are similar to promotional marketing teams. For every promotion pitch/execution, there is some combination of tactics/roles used to meet an objective. When leveraged by these teams, Promotional risk coverage serves as a FORCE MULTIPLIER. It helps amplify message, facilitate creative thinking (by removing budgetary restraints), stretches and/or fixes budgets, and contributes to effective solutions. The most effective marketers often incorporate promotional risk coverage at the concept level, and are able to leverage it to do some things that otherwise might not be possible.
The next time you start gearing up for a big raid, PVP battle, or promotional concept, devote some time on how to incorporate your “force multiplier” into your efforts, and let me know what happens.

written by Steve \\ tags: Gaming, Promotional Risk Coverage

In a grab for market share, sometimes people will try anything. Take Asa Candler, Atlanta businessman and co-owner of Coca-Cola for instance. In 1894, he used handwritten tickets for a free glass of Coca-Cola to help market his new soft drink. Spotting this success one year later, grocer C.W. Post began using coupons to help sell groceries. His coupon gave people a one cent discount on his new breakfast cereal, Grape Nuts.

During the 1930s, coupons were characterized as a “necessity” to help families make ends meet during difficult economic times. ( http://www.couponmonth.com/pages/allabout.htm)

Fast forward to today – the tactic of using coupons to increase distribution and created trial for marketers has been used effectively for the last 70+ years. In fact, recent data suggests usage is tracking upward, and has been since 2007. Believe the hype, consumers like (and rely on) them:

- http://www.msnbc.msn.com/id/25500262/
- http://www.reuters.com/article/pressRelease/idUS118086+03-Sep-2008+MW20080903
- http://promomagazine.com/research/ads-resonate-coupons-instore-1218/

This relevance though (great as it is) increases redemption, and increased redemption means increased (but uncertain) costs, and increased costs are in direct contrast to marketing budgets that (for good or bad) are often on the front lines of budget cuts.

So what’s a marketer to do?
Abandon or limit a tactic that that seems to be resonating in the market?

Roll the dice and hope that incremental sales can soften blow of increased budget impact?

I am not sure it is ever a sound idea to go into a promotion with off budget liability hanging out, but in the climate of shrinking marketing budgets and every expenditure receiving extra scrutiny…why take the risk?

Promotional Risk Underwriting and redemption coverage fixes exposure on coupon offers, so marketers know their costs to the penny, prior to the coupon ever hitting the market. Call me old school, but I think marketers are best when they create and execute, not when they are sweating the cost implications of tail end promotional redemption.

As a tool, promotional risk coverage caps the exposure that can accompany redemption-type (i.e. COUPON) progams. No underspend, no overspend, no lingering worries about coupon redemptions 9 months after the fact.

So, if you’re ready to cash in on the coupon’s resurgence as a marketing tactic, but not interested in wearing your “accounting hat” as much as your “marketing hat”, I don’t blame you. Check into promotional risk, or redemption coverage – your budget will be happy you did.

written by Steve \\ tags: Coupon, Promotional Risk Coverage, Redemption, Redemption Coverage