iC Group - In The News

Taming the contest beast

Duncan McCready - October 18, 2004
A primer on how to avoid contest catastrophes

Is it any wonder why the word promotion starts with the letters PR? The two are closely linked. Promotions rely on public reaction to create pull for products and services. But a promotion gone wrong can quickly become a PR nightmare.

You've seen the headlines: "Thousands mistakenly told they won contest"; "Printing error cause of contest nightmare"; "Consumers outraged over promotion glitch."

Those behind the headlines know all too well the risky nature of the promotional contest. It can be likened to a tamed beast-no matter how much breeding and training the wild animal has, there's always the risk it will turn to its natural instincts.

The risks of something going wrong in a promotion are plenty- there is no guarantee of success. And with the tight timelines and limited resources promotional marketers are faced with every day, the beast can run even wilder.

Earlier this year, I participated in the Advertising and Marketing Law Conference, hosted by The Canadian Institute, which featured a panel discussion on how to avoid contest catastrophes.

The sheer fact that I was accompanied by a panel of legal experts was enough to bring home the message that promotional marketers do need to develop strategies that will help them head off contest risks before they happen. But the question is: Where do you start?

One of the first steps in avoiding contest catastrophes is developing good rules and regulations-they represent the "contract" or the binding agreement between contest sponsor and participant. If you sift through the fine print, you may notice clauses such as, "sponsor reserves the right to suspend, cancel or modify..." or "if, as a result of an error relating to the..." These are all contractual outs for the sponsor should a promotion go wrong.

But the goal of the contest sponsor shouldn't just be to develop airtight contracts, but rather to design promotions that don't need to have their contract clauses invoked. If the contest sponsor has to utilize contractual outs within the contest rules and regulations, key company assets are usually already in jeopardy: Customers are dissatisfied, negative newspaper headlines are out, supplier relations are in jeopardy, legal investigations have been prompted and the budget is blown, not to mention overall marketing objectives have failed.

The solution? Well, the bad news is there is no cookie-cutter solution. The good news is there are ways to help avoid the problems before they arise. If you thought the term "risk management" was only something your insurance broker talked about, think again. Risk management is the best defence against common contest nightmares.

Promotion risk management is a systematic process of identifying, evaluating, managing and communicating risks at all stages of a promotion. Generally, a promotion risk management strategy will encompass three key stages: Surveying: A review of the project scope, deliverables and objectives should be conducted to identify risks. Planning: Each risk is evaluated and a plan is formulated to help avoid, monitor, transfer or mitigate the risks. Implementation: Executing the promotion risk management plan.

Each stage is critical as they enable stakeholders to better understand the inputs/outputs required to take a promotion to market and will guide them in assigning the proper checks and balances to help mitigate risks. Just as integral to defining these stages is accompanying risk management practices and procedures. This may include detailed project specification documents, supplier matrixes, communication strategies and auditing processes, all integrated within each stage of development and execution.

Practices and procedures must be well communicated to all stakeholders involved in delivering promotions. Most errors happen because resources don't understand the promotion requirements or they don't effectively communicate change that occurs throughout the development and execution cycles.

Finally, the strategy must effectively manage associated costs with risk management practices, such as financial risk transfer to third-party organizations. Specialty insurance products, for example, can be effective tools to manage the financial liabilities associated with over-redemption or unexpected winners. Errors and omissions insurance from suppliers should also be in place to cover the products and services they are providing. So who do you call to develop a risk management strategy? The people who know promotions will be the driving force behind the strategy. Their expertise should be complimented by legal advisors and specialists in business processes, information technology, insurance, print production, security, control and auditing.

In essence, the areas of risk are numerous. The key is defining a strategy that will help keep the lions in the cage, so to speak. What results is a cultural shift from "firefighting" to proactive decision making, translating into a higher promotion success rate and a positive impact on the core company assets such as brand(s), customers, suppliers, trade channels and overall revenues.

The promotional contest can be likened to a tamed beast...there's always the risk it will turn to its natural instincts

DUNCAN McCREADY is executive vice-president of IC Group in Mississauga, Ont.