No Limit to Brainstorming

No Ideas Are Too Big

No Ideas Are Too Big

Insurance Leveraging Boosts Consumer Appeal

How many times have clients briefed their consumer engagement agency on activity and as a part of the brief asked that the agency source a third party marketer to help leverage their budget?

Often the issue is that matched clients don’t have the same objectives or vision as your client.  These relationships are based on the wrong foundations and usually end in tears! There was a tactical need, not a strategic partnership.  I guess technically the respective parties were not matched!

So, how do we leverage limited budgets without a partner?

In Australia, (relatively) recent changes in promotional legislation have allowed marketers to leverage prize structures through insurance – this is sometimes called Risk Management.

So, what does leveraging your prize fund with insurance involve?  To be able to leverage we need some key ingredients – the prize pool and the mechanic for winning must be ‘specific’ and ‘accountable’ / ‘measurable’. The essential component being measurable odds.

As an example, if a consumer has the opportunity (in it’s simplest form) to select one envelope from 300 for the chance to win $1,000,000, the odds of selecting the winning envelope are 1 in 300.  Simple!

This is an insurable ‘event’.  Naturally, there are certain procedures that are required to manage the event and to able to prove that the outcome was valid.  If the promotional event is legal, decent and honest and the consumer selects the correct envelope, then the insurance agency will pay the $1,000,000 on behalf of the marketer.

For me the important point is that we use insurance to help manage the risk so, that in the event of there being a winner we are able to fund the prize.  We are not insuring against there being a winner!

Picture this scenario – a marketer has $100,000 to fund a consumer promotion.  Which offer is more appealing for consumers: a $3.00 Cash Rebate (with all of it’s associated hassle) or the chance to win $1,000,000.  I know which offer would inspire me.  I have managed around 20 Risk Managed programmes with inspiring stories and brand results associated with every programme.

A budget of $100,000 can easily fund the chance to win $1,000,000 including guaranteed prizing for one winner in every state.  Hence this type of leveraged programme can enjoy national or state-by-state focus.

Remember, there is no need for the third party association that potentially could have watered down the brand message.  Using insurance to leverage your budget is an exciting addition to the promotional marketing toolbox.

However, don’t just think in terms of cash prizing alone.  The flexibility of insurance can be used to leverage any prize promotion or rebate concept whether it involves cars, cash or holidays.  The only limitation is the imagination of your team.

This article first appeared in Professional Marketing Magazine

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~ by rtymerej on September 27, 2009.

 
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