PromoVeritas, a global prize promotion specialist, has revealed the results of its detailed analysis of over 400 consumer prize promotions, exposing six key learnings for marketers designed to optimise promotional campaign engagement and boost return on investment (ROI). Contrary to conventional wisdom and intuitive assumptions, the study divulged that offering a variety of smaller prizes is more effective in driving participation than a singular grand prize.
Jeremy Stern, CEO of PromoVeritas, explained: "Brands should be pushing the number of prizes on offer as consumers feel that this will give them an increased chance of winning, and it is this that will motivate them to participate."
Further flipping conventional marketing wisdom on its head, the analysis reported that cash prizes no longer reign supreme. Instead, gift vouchers emerged as the favoured prize among consumers, surpassing the combined interest in money, holidays, and event tickets.
Stern said, "We may think that cash is best, but it usually ends up paying routine bills or a mortgage, whereas vouchers can generally be used for an enjoyable luxury." Surprisingly, football-related prizes fell flat among consumers, being the least popular prize on offer.
Another unexpected finding suggests that prize value doesn't necessarily generate more participation, with most effective prize values chiming in between GBP £1,000-£5,000 and GBP £5,000-£10,000 prizes coming in second. Prizes worth GBP £50-£500 attracted more entries than prizes over GBP £10,000, suggesting there's no need to splurge on ultra-expensive prizes for maximum promotion engagement. "Usually, there is no need to spend more than GBP £10,000 on an eye-catching prize to draw attention", Stern noted.
Interestingly, the study also discovered a correlation between an individual's wealth and their likelihood of participating in a prize promotion, with affluent achievers being more likely to participate than demographic groups with less disposable income. Jeremy Stern pointed out that these findings contradicted the common belief that wealthy individuals would be less likely to enter prize promotions, noting that wealthier groups used promotions to sustain their lifestyle while cutting back in other areas.
Stern highlighted another key takeaway from the study: matching the right prize to the appropriate consumer target and brand is critical. While affluent achievers gravitate towards cash prizes and gift vouchers, typically middle-class, empty nesters or "comfortable communities" are more likely to go for football-related prizes. On the other hand, tech, food and drink prizes appealed to 'rising prosperity' demographics, indicating improving financial circumstances.
PromoVeritas' analysis has unearthed some surprising and invaluable insights for marketers seeking to optimise their promotional campaigns in today's socio-economic climate. "These findings are especially interesting in the light of the cost-of-living crisis," said Stern.
"Our analysis will present surprises to marketers and brands," Stern concluded, driving home that brands must embody versatility and base their marketing decisions on data to ensure their promotional campaigns are effectively tailored to consumers.