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Why do so many brands run promotions expecting so few people to respond?

Wed 8 Mar 2017 @ 15:10

I have been asking myself that question for years.

Why is there less promotional activity going on out there? Is there a thirst for promotions from brands and consumers? How good are promotions at getting people to buy share and try?

At first, in the doom and gloom of the Credit Crunch I presumed that brands had much less money to spend, but today I’m not so sure the answer is quite that simple. I decided to do some research and where better a place to start than my own company?

Each year PIMS-SCA receive hundreds of enquiries from the Promotional Marketing community and our customer’s first question is always what will be the response level to my new campaign? So, I reviewed our data from the early noughties and compared the results with those from a decade later.

It made for a very interesting read.

In 2003, the promotions we evaluated with a stated expected response rate of greater than 3% exceeded 80%. By 2013, that figure had fallen to less than 40%. Digging deeper I discovered that a staggering 50% of the promotions on our database now were expected to generate response rates lower than 2%.

Remember, as a Promotion Risk Manager we are supposed to review those promotions pushing the boundaries of creativity and “financial risk”. And if we are mainly seeing the cutting edge “risky” stuff – then day to day promotional activity must have an even lower expectation of response levels.

Why have things changed so dramatically?

I believe there are several factors that have combined to produce this current state of affairs. Certainly, Client’s promotional marketing budgets appear to be a fraction of what they used to be. And of course, we have a proliferation of URN and Web Check Promotional Mechanics in the market – campaign management tools that whilst making life easier from a brand perspective are clearly a “put off” to most consumers, as inputting URN codes into Promotional Micro Sites is a major barrier to entry.

And while trying not to sound too much like a grumpy old man, the Marketing World’s ongoing “love affair” with Social Media as a promotional channel is another major issue. I recognise it may have its good points, such as delivering brand awareness and raising engagement in a new channel but generating good responses to promotional campaigns is not one of them.

PIMS-SCA are at the “coal face” of response levels every working day and we know what works and more importantly, what doesn’t. We all know that more people than ever are looking for instant gratification, whether that’s in promotions or anything else.

Driving people to a social media platform for spurious reasons is simply adding another level of complexity and driving down response levels for what should be straightforward, compelling promotions.

Both business and audience needs seem to have been forgotten in a rush to employ new techniques and channels as an end in themselves or to employ safe fixed cost techniques such as a Money Back Guarantee, Web ‘Check and Win’ or a Prize Draw in the knowledge that it won’t cost them a fortune.

Real objectives seem to be taking second place to budgetary constraints and the fact that hardly anyone can be bothered to participate doesn’t seem to be important anymore. Any pretence at innovation by locking on a Social Media mechanic is simply wallpapering over the cracks in a campaign.

It’s not where an idea comes from, it’s where you take it

We need to remind ourselves that just because a great, proven, promotional technique has been run before doesn’t mean it can’t be adopted, adapted and advanced with just a little creative thought. Thirty years ago, the award winning Andrex Puppy campaign was launched and yet what else is the current, hugely innovative and creative Meerkat campaign other than a twist on that great, original idea?

Surely promotional campaigns must be about generating real customer engagement like Andrex and comparethemarket.com. They should be about getting customers to do something (buy, try, share) they otherwise wouldn’t have. If there is any rationale to what we are all here for, then it should be about generating a positive customer response, and if not that, then what?

Mark Kimber MD, PIMS-SCA

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