Promo Disasters and How to Avoid Them

One of the most uncomfortable times in my career was back in 2003 when a promotion that we held in the company I worked for led to a PR crisis.  The promotion was called, "Wild Deals," and it really did go a little wild.  The promotion was meant to encourage higher average spend and repeat purchase through gaming mechanics.  Customers would have access to "wild deals," such as 50% off on a car, 75% off on mobile phones, and 90% off on television sets.  However, to avail of these "wild" deals, customers needed to have the highest purchase total during the promo period.  Purchases were tracked through vouchers that were issued upon reaching the minimum purchase.  The customers with the highest number of vouchers would be able to avail of the wild deals.
 
The first time we held this promotion, it was extremely successful.  Our sales went up by double digits and surpassed our forecast by double digits. The following year we decided to repeat this promotion given the great results the first time. Our advertising agency came out with a series of teaser ads prior to the launch of the promotion.  The teaser ads did not state the full mechanics as they were meant to arouse curiosity.  The ads enticed customers with the offers of a car at 50% off, cellphones for 75% off, and colored television sets for 90% off.  At the bottom of each of the ads, in small print, it said, "Minimum purchase applies.  See posters for details." 
 
On the day of the promo launch, long lines formed outside the stores even before opening.  Upon opening, the crowds dashed madly into the stores demanding to buy these products advertised at the price in which they were advertised.  The store personnel tried, in vain, to explain that there was a purchase requirement.  These explanations were drowned out by the anger of the customers at feeling cheated.  Many made the trip from out-of-town just to avail of these promo offers.  Eventually, we sorted it all out.  The Ad Agency issued an apology for misleading the public and the promo finished with very good results.
 
A mistake in the conduct of a promotion can cost a company millions and, worse, ill-will from customers.  Who can forget the Number Fever promo debacle? Most marketing practitioners will have their own stories of a promo gone wrong.  What can we do as marketers to avoid such mistakes in the future?  How can we insulate ourselves from promo disasters, while still coming up with compelling promotions that generate excitement?  Here are some tips that I have put together based on my past mistakes.
 
Have a Promo Planning Checklist
With the myriad of details that are inherent in putting together a promotion, there will always be something that will fall through the cracks.  No matter how experienced one is, there is always that one detail that, if forgotten, could mean the difference between a huge success or a big disaster.  A promo checklist, which details all the key tasks that need to be completed, is a must.  Some of the key items on this checklist will include getting the necessary permits (DTI, BFAD), securing the prizes, delivery of prizes to the point-of-sale, promo announcements, printing of all collaterals, and others.   
 
Have a Contingency Plan
One of the key lessons that I've learned through my years of working in marketing is that you always need a back-up to the back-up. Having a contingency plan in case things do go wrong is prudent.  To be able to come-up with a contingency plan, you need to anticipate problems.  In promotions, the most common problems will usually revolve around overforecasting or underforecasting premiums or prizes.  Always have a fallback.  Have a back-up source of stocks if you run out or replace the premium with something of equal or better value.  If you find yourself with too much stocks, tweak your promo mechanics to make it easier to avail of the premium.  If you need to change your mechanics, make sure to secure the approval of the government regulating body, such as DTI or BFAD.  Communicate these changes with your customers.  Give your employees a script for addressing the complaints that are sure to arise.
 
Clear and Simple Mechanics
Complicated mechanics lead to complicated problems.  Ensure that your mechanics are clear and simple for both customers and your frontline employees.  When promo mechanics are complicated, they will lead to misunderstandings.  If there are too many steps to joining a promotion or too many requirements, it is usually a sign that the mechanics are complicated.
 
Train the Frontliners
Related to simple mechanics is the proper training of frontline employees who are responsible for promo execution.  Many promotions fail from poor execution at the frontlines.  It is imperative for employees to understand the promo mechanics so that they will know how to answer questions or address complaints.  I once asked an employee of a supermarket what the difference was between the regular loyalty card which was silver versus the higher tier gold card, and she responded by saying, "Yung kulay po nila magkaiba."
 
Have a Solid Basis for Your Forecasts
Too many promotions fail because of poor forecasting.  In forecasting for a promotion, you need to determine participation rate, expected lift as a result of the promotion, and the number of prizes/premiums you will need to prepare.  Ensure that you have a solid basis for your forecasts, such as historical sales, results from the same or similar promotions in the past, and typical participation rates.  You should have a low, medium, and high scenario, and contingency plans if you find yourself in the low or high quadrants during the promo.
 
 
Some promotions will inevitably fall short of its objectives.  However, as responsible marketing practitioners, it is incumbent upon us to ensure that we do everything possible to prevent a promo disaster.  There is simply too much at stake to do otherwise. 
 
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Frances Yu is the Chief Retail Strategist of Mansmith and Fielders, Inc., the only advocacy-based training and consultancy firm focused on marketing, sales, strategy and innovation. For inquiries or feedback, please write to mentors@mansmith.net.