A promotion can get attention and still be a terrible business decision. Before asking how many people might respond, ask what happens when they claim exactly what you promised.
What happened at Hoover
In 1992, Hoover's British business ran a promotion offering two flights with qualifying purchases over £100. The offer covered European destinations and later the United States. Demand and fulfilment problems led to complaints and legal disputes. Hoover's European business was sold to Candy in 1995. The brand did not simply disappear.
The historical overview and its source list describe the sequence. For today's campaign planning, the useful question is how the promise holds up when people use it.
Do the arithmetic before the artwork
Here is an illustration, not Hoover's historical accounting. A sale brings in NZ$100 excluding GST. Delivering the product costs NZ$70, leaving NZ$30 before the promotion and other overheads. If the reward costs NZ$40, a redeemed offer leaves a NZ$10 shortfall before advertising and administration.
One hundred such redemptions would produce a NZ$1,000 shortfall on those assumptions. A bigger response makes that particular offer more expensive. It does not repair the margin.
Test full redemption
Work through a case where every eligible buyer claims the reward. Include delivery, staff time, payment charges and support. Then check cash timing: you may have to pay suppliers before the campaign has brought in enough cash.
If the offer only works when customers fail to claim, revisit the offer. A confusing redemption process creates more work and a worse customer experience.
Check capacity as well as money
- Can the supplier deliver the promised quantity?
- Can customers understand the eligibility and availability before buying?
- Who handles questions, cancellations and failures?
- What happens if demand reaches the campaign limit?
- Does the promotion attract customers for what you actually sell?
Put the main conditions beside the offer. Have the relevant specialists review the numbers and terms before launch. A line buried at the bottom cannot do the work of a clear offer.
Make the promise deliverable
The best-looking campaign still needs a business behind it that can fulfil the promise. Check that before buying attention.
Talk to PlainBlack about your campaign.