Continued from Part 1…

There’s another factor that’s even more critical in determining the right balance of prizes in your promotions planning:

Customers vs Non-Customers: As part of your online promotion strategy, you may run a promotion that targets current customers who are already brand loyal, to encourage continued or incremental purchasing. On the other hand, your promotions planning may target consumers who currently prefer another brand or are not currently purchasing in your category to try to entice them to purchase your product instead.

In the case of non-customers, promotion consulting research shows that a larger number of lower-value prizes will work best. This is because your targets currently perceive a negative overall value of switching to or otherwise purchasing your product (or they would already be doing so), so they need the assurance of readily available prizes in order to expect a more positive outcome from your product. In considering these targets as part of your online promotion strategy, offer several small but desirable prizes to encourage them to switch to your product, which will erode their negative perceptions and encourage them to purchase.

With current customers and brand loyalists promotion consulting research shows that the opposite is true. They already expect a positive outcome from purchasing your product, so the prize is just icing and serves to increase their brand preference. So in general, these customers will be more interested in the possibility of winning a single large prize. Your promotions planning for current customers should offer only one valuable prize.

Thinking about these factors will get you started in the right direction. There are many other variables that go into good promotions planning, and the best strategy should be determined on a case-by-case basis as part of your overall online promotion strategy.

AlterSeekers is a brand promotions agency in New York focusing on promotions consulting and planning, web strategy, social media marketing (including Facebook strategy), go to market strategy, and overall strategic planning. For more information see AlterSeekers.com.

When doing promotions planning, the question inevitably arises: how should we structure our prizes? As with any good question, the answer is:  it depends on your audience and the specific goals of your online promotion strategy.

Given a fixed budget, the main problem in structuring your prizes is to find the right balance between a small number (often just one) of high-value prizes, versus a large number of low-value prizes.

It’s important to note during your promotions planning that what you’re trying to impact is not the actual customer satisfaction or perceived value upon using the product. Instead you’re trying to impact the combination of the customer’s expected (or anticipated) value of the product and prize(s) together.

There are a number of factors to consider in our online promotion strategy that impact what sort of prize structure will be most enticing to your target audience. Two of the most critical are 1) whether you’re targeting current customers or non-customers, and 2) how risk tolerant your target audience is.

Risk Tolerance: It’s important to recognize in your promotions planning that your targets may be more or less risk tolerant. All else equal, a more risk tolerant audience will prefer a single high-value prize, and a risk averse audience will prefer many smaller-value prizes.  As part of your overall online promotion strategy, it is important to balance the risk tolerance of your target(s) against the number of prizes you offer.

Coming up in Part 2… the #1 factor in determining your prize structure!

AlterSeekers is a brand promotions agency in New York focusing on promotions consulting and planning, web strategy, social media marketing (including Facebook strategy), go to market strategy, and overall strategic planning. For more information see AlterSeekers.com.

We just finished editing new videos on AlterSeekers and would love your feedback. This one talks about how online promotions has evolved with Social Marketing. We’d love to know what you think!

It seems like every few years, something new comes along and changes the promotional marketing landscape. Today, I’d like to discuss the evolution of Sweepstakes, Contests and Games. I’ve worked in this industry for over 20 years and it’s been an amazing run. When I started my career in the promotion industry, the Internet was primarily for education and government workers. And I can remember doing some of the first online promotions for AOL & Prodigy in the early 90’s.

But what’s most exciting to me is the most recent evolution of Sweepstakes, Contests and Games that are happening on Facebook, Twitter and other Social Media sites. The promotion has once again evolved and I’m excited to be talking about that evolution today.

Let’s start with Online Promotions. If you haven’t read Bill Carmody’s book on the subject, you really should. It’s the only book out there on the topic and you can get it at 50% off if you become a fan of AlterSeekers.

This is important because in order to see the future of promotions, you need to understand where we started – both online and in retail. With tools such as Facebook, YouTube and Twitter, you don’t even need traditional back end databases and other scripting technology in order to launch a sweepstakes, contest or game.

AlterSeekers Fan Page

Facebook Fan Page promotions, for example, can really take off because of the viral nature of Facebook. With the right prizes and the right hypertargeting, you can easily launch promotions that drive awareness, downloads and ultimately incent people to buy your product or service.

Likewise, Twitter creates a sense of urgency within your promotions. Rather than having one 6 to 8 week promotion, you can have an hourly or daily promotion that gets people to pay closer attention to your Tweets. AlterSeekers has continued to stay on top of these evolutions in Brand Promotions – especially in the social media space. It’s where your sales are headed if they’re not there already. The idea of social commerce is no longer a foreign concept to most of us.

AlterSeekers Twitter Page

For more information on Social Marketing, please download our Free Webinar on Monetizing Social Media: How Do You Make Money with Facebook and Twitter.

I’m truly enjoying playing with the Facebook Fan Box:

What I like about it is that so many of our clients are looking for innovative ways to easily add fans to their Facebook pages. So much of traditional media is focused on driving people to the fan page, but with this simple tool, you can get existing Facebook users become a fan without leaving the page that they were on in the first place.

I know that this is all part of the Facebook Connect initiative and that there’s all sorts of other cool things you can do with Facebook Connect, but this very simple JavaScript widget is going to change the way many of our clients are promoting their fan pages. It’s simple, clean and elegant. Just what our clients are looking for.

If you haven’t played around with it, try it now. Just by clicking on the “Become a Fan” button above, you will become a fan of the Trend Micro Fearless Web and be entered to win weekly prizes. One click and you instantly see your picture show up on the row of 10 fans. I love it.