Successful promotions: various factors at play

In our last post we spoke about the importance of ensuring that the prize on offer in a competition is in proportion to the steps someone needs to take to enter, i.e. looking at a consumer promotion as a trade between the consumer and brand.

Whilst we believe this to be an important factor, there are many other significant factors influencing the success of some competitions over others. We have spoken to an academic in this field who will be bringing this topic into focus with his work. In the meantime we wanted to discuss some of the factors with relevance as we see them. Running a successful competition may be part art and part science. Indeed, the copy, the artwork itself and the way the competition is communicated are important. Here are some other factors:

Competition effectiveness imageAdvertising is one of the most important aspects of competition marketing. Ensuring that people, and more importantly the right people, hear and know about the competition.

As discussed in our last post, the complexity of entry should also be considered. If a competition has a number of steps to be followed, it may also turn time poor people away.

Whilst the above is by no means comprehensive or definitive it does bring to mind the question: “is there a formula for success?’ If you have had experience with either successful competitions or a competition that did not meet your objectives we would love to hear what you think you did right or could have done better.

 

More about us

Permitz was initially set up specifically to assist companies wanting to run competitions and to obtain competition permits.  This focus on such a niche area has allowed us to develop expertise exceeding many of our competitors, who struggle to stay up to date with regulatory changes and policy updates.

We have set about seeking to differentiate ourselves on the following basis:

1. We aim to share knowledge and help our clients achieve their objectives. 

We don’t charge to assist in the design and development of a competition or to research when a permit or licence is required. This may typically involve a discussion about when competition permits are required and about potential entry mechanics and suitable prizes.

As you can see from our postings online, we are happy to share what we know, and for no cost. See our articles on competition permit basics for more info on when a competition permit is required and the best practices when designing a competition.

Some of the more common questions we are asked are to do with timing (click on the link for further info), cost of competition permits, and when competition permits are required.

2. We have a fun and flexible workplace which is focused on enjoying work.

We have done away with unnecessary meetings, reports which nobody reads, policies which are not flexible and actively understood or creating paperwork for the sake of creating paperwork. Indeed, with staff having government, commercial and small business experience, we relish in not doing ‘business’ the way that some of our former employers did.

We are simply focused on doing work when we need to do it and on doing it professionally. This translates into flexible working hours, and locations, ensuring that employees are engaged and actively learning. We discuss work in environments we enjoy, not around a board table. This translates effectively into a company whose employees are responsive and focused on our client’s needs.

3. We care about our environment and our community. 

A company does not operate in isolation of its environment or the community from which it both draws its energy and finds its existence.

From using solar energy, to providing discounted or free work  for non-profit organisations, our small contribution or reduced negative impact is an important part of our culture and how we see ourselves.

If you visit our office you will notice the natural light, the plants and the distinctive lack of paper. Whilst the dream of a ‘paperless office’ has not come about for many companies, for us paper files are a thing of the past. We have also committed to giving back, this year it will be 5% of profit to charities of our choice.

4. Enjoyment in work is from the work we do and in interacting with our clients. 

We are privileged to work with some very interesting individuals and brands. From hotels, airlines, electronic giants, to authors of children’s books. we have had a great run. Whilst we look after the more tedious aspects, i.e. competition permits, we are luck to work with interesting and experienced people who know their craft whether marketing or legal so well.

Competition permit costs set to rise 1 July 2014

Each year competition permit costs increase as each trade promotion lottery department/ authority increases the fees payable to obtain a competition permit. The cost of a competition permit will depend on the total prize pool being given away.

If you are planning to run competition which requires a competition or trade promotion permit in the first or second quarters of 2014/2015, now is the time to apply for competition permits. By submitting applications before the end of the financial year, organisations can avoid the increased competition permit application fees.

Competition permits

Competition permits are generally required for chance-based competitions. Permits would be required from NSW and the ACT if your prize pool is at or under $5,000 and from SA and VIC if your prize pool is over $5,000 or is an instant win competition.

There are a range of permit conditions which must be adhered to as set out in the permits themselves. These include the requirements to hold all entries and records of winners for a three years. This also, obviously, includes the requirement to conduct the competition in accordance with the terms and conditions and to ensure all entries have an equal chance of winning.

Any changes to the terms and conditions or structure of the competition once permits have been approved must be approved by way of a formal amendment approval from the lottery departments.

Permitz Group are able to assist with both skill and chance based competitions. We can draft terms and conditions, apply for permits on your behalf and send you the final terms with minimums for use in advertising. We can also then conduct a draw if you would like us to do so and arrange for the notification of the winners/ publication in a newspaper.

Essential elements to a successful consumer promotion

Consumer promotions or competitions are a form of trade between a consumer and a business. In exchange for the ‘chance to win a prize’ or multiple chances to win, the consumer is asked to provide their personal information, to purchase a product or service or to interact with a brand in some other way.

For a consumer promotion to be effective, the trade-off made by the consumer needs to be in proportion to what is on offer via the competition-

The most topical example of the above over the last quarter has to do with the collection, use and disclosure of personal information collected when someone enters a competition. It is fair enough to say that most consumers have an expectation that the information they provide will be used for marketing or promotional purposes.

However, if the use is too wide or the trade-off too unfair, potential entrants can be turned away. If you were asked to consent to receive unlimited marketing material from unknown third parties for a chance to win a holiday, you would be more hesitant to do so than if you were asked to simply subscribe to a newsletter (and given the opportunity to opt-out at any time).

Since the protection and understanding of use of personal information is such a relevant topic, it is now more important than ever to ensure that consumers understand how the personal information they provide will be used by the company collecting it. To do this, the intended use and disclosure should be clear on the term, in the advertising and in the Promoter’s Privacy Policy.

What is a reasonable trade-off will largely depend on the intended audience for the promotion which should tie back strongly to the actual brand and the types of customers the company is looking to attract or retain. Entry methods, prizes, ways of communicating with entrants and potential winners and advertising of the competition need to be focused on the demographics of the entrants that are sought.

Many companies go to extreme lengths to include various social media ‘likes’ follows and ‘shares’, to allow various layers of bonus entries and have a number of steps that need to be followed by an entrant to enter. These steps can overcomplicate the competition and push the balance away from a proportional trade off.

Simplicity is usually the answer.

Conducting a competition that is focused on your consumers, is proportional in what is on offer, and is communicated via advertising effectively is the right way.

Is a blanket permit right for my competition?

A blanket permit may be the answer for a company wishing to run a number of promotions over a period of time as distinct from a single trade promotion permit obtained from the various state regulators.

The two most significant benefits of having a blanket permit are: 1) they can be cheaper and 2) they allow for greater flexibility over that given by a single competition permit.

Flexibility is given as you do not need to apply for a single competition permit, specifying the dates, prizes and conditions of entry when you have a blanket. You can simply use the approved terms and make those adjustments. The permit number you have for the competition will remain the same. In NSW a ‘blanket’ competition permit will start with LTPM as opposed to LTPS.

There are a number of restrictions in running competitions under a blanket, i.e. a blanket competition permit will not work in all situations.

If you are looking at running a number of competitions over 12 months and:

  • a. Cap the value of each prize at $1,000 or less;
  • b. Give away less than $100,000 over the life of the blanket;
  • c. Give away less than $5,000 in each draw; and
  • d. Are able to keep records of each prize given away, the winners details and the promotion details.

Then a blanket permit may be the answer. Give us a call or drop us an email if you would like to learn more and discuss if a single competition permit or a blanket permit is the answer for you.

Competition permits in NSW

A competition permit is required from NSW for any chance-based competition, i.e. no matter the total value of all prizes in the competition. Thankfully, it is reasonably easy to obtain a competition permit in NSW.

NSW have many of the same requirements that are present in other states in relation to chance-based competitions. These include the requirement to hold an unclaimed prize draw if the initial winners cannot be contacted after 3 months and the requirement to hold trade promotion permits which need to be displayed on all advertising.

NSW are much quicker than any other state in issuing trade promotion permits and the fees are, generally, cheaper. The cost of a permit for a competition with a prize pool of under $10,000 is $80.32. The department are helpful with the process.

To obtain competition permits from NSW it is important to ensure that your competition complies with the various requirements. Permitz can assist in reviewing or drafting terms to ensure compliance and quick issue of a competition permit.

Running a trade promotion in South Australia: Its a little more difficult

To conduct a trade promotion in South Australia with a prize pool of over $5,000, or where prizes are awarded instantly i.e. via a game card, a business must apply for a permit from Consumer and Business Services. The requirement to obtain a permit and to conduct the trade promotion in accordance with the Regulations and the guidelines are important to ensure that consumers are protected and that legitimate competitions are conducted. Similar requirements exist in other Australian States and Territories including NSW, VIC, the ACT and WA.

There are some discrepancies apparent in the requirements for conducting a trade promotion in South Australia which make it more onerous to do so in South Australia than in any other Australian State or territory. These are:

  1. Requirement: The requirement to publish winners of prizes of over $250 in a newspaper, unless the lottery was advertised in a particular publication or entry was only accepted via a website. In VIC, amendments that came into effect on 16 August 2012 reduced the requirement  so that only winners of prizes over $1,000 needed to be published and that those winners could be published online for 28 days (regardless of how people were to enter or where the lottery was advertised.) South Australia is the only state which generally requires publication in a newspaper (unless one of the exceptions apply)
  2. Requirement: When submitting a permit application, an application fee must be paid. In South Australia, there is a schedule of fees to be paid which are dependent on the prize pool in the trade promotion. South Australia’s permit fees are one of the highest in Australia. To submit an application for the one promotion to Victoria would cost a business $333.80. To apply for the same permit in South Australia with exactly the same trade promotion would cost a business $3,525. i.e. more than 10 times the VIC application fee. If that same business wanted the permit to be assessed within 5 business days (something that a state like NSW would do for no extra cost) they would need to pay a ‘premium fee’ of over $7,000. The costs and timing involved in obtaining an SA permit has led to a number of companies simply excluding South Australian residents all together.

Whilst there are good reasons for having businesses comply with the regulations some regulations do make it difficult to do business. We are asking for minor changes to address the above and will keep you posted.

Votes, shares, and referrals- do I need a competition permit?

We are often asked if competition permits are required for a competition where the winners determined on the basis of the number of votes, shares or referrals.

Such competitions can be an effective way of spreading a message or growing a customer database in a viral manner. Commonly such a competition would require the original entrant to submit an entry which others then vote on or require the entrant to refer friends and colleagues. The winner would be the individual with the most number of likes, shares or votes.

When conducting a referral based competition it is important to ensure you are compliant with the Privacy Act and Spam Act. It is not okay to send third-parties marketing material when they have not consented to the receipt of such material.

When conducting a vote based competition it is important to ensure you consider means to limit the risk of individuals buying votes or submitting multiple votes in breach of the terms and conditions. Permtiz can assist you in understanding your options to limit this risk.

Such a competition may involve an element of chance which would result in a need for competition permits. An element of chance may be introduced if a draw is involved or if a limited number (determined at random) can participate.

Chance can be avoided if the winners are determined on the most number of likes, shares or votes and there is a tie-break mechanism that requires and is judged on the basis of skill. For example, if two or more entrants receive the same number of votes, to determine the ultimate winner the Promoter could ask the tied winners to submit an answer to a question and then judge the winner on the basis of their answer.

Blanket Competition Permits

A blanket competition permit can be a good alternative to applying for individual competition permits for each promotion you run.  A blanket competition permit can offer significant cost and time savings if your organisation runs a number of competitions each year.

If you are looking at running a number of competitions over 12 months and:

a. Cap the value of each prize at $1,000 or less;

b. Give away less than $100,000 over the life of the blanket;

c. Give away less than $5,000 in each draw; and

d. Are able to keep records of each prize given away, the winners details and the promotion details.

Then a blanket permit may be the answer.

You can obtain a blanket competition permit from New South Wales and the Australian Capital Territory. In NSW you can obtain either a Class B or a Class C blanket (different rules apply to each).

The two main benefits of having a blanket permit are that it can be cheaper to obtain a blanket than to obtain individual competition permits for each competition you run and that, once you have the blanket permit, you can set up a competition very quickly. Once you have a blanket competition permit you are able to use that permit number in each competition you run (provided that the competition complies with the requirements of that permit).

If you are running a number of smaller competitions, want flexibility in the competitions you run and see value in a blanket permit give us a call and we can obtain a permit on your behalf.