Do fancy #gifts and #prizes # lure and influence our #purchase #decisions?

It’s the part of the year when Onam season has started in Kerala...It is also the start of the festival season across the country where each region across India has a major festival coming up in the next 3 months.

My mind was going back to the mid 1990 to the early 2000 where I spent the start of my career working in the durables and appliances space in Kerala…Onam in those times was a crucial period for all durables and appliances companies as 35% to 60% of your annual sale happened during this one-month period depending on the leadership position of your brand in the market.

I also recollect the huge fancy offers that used to be brought out by all the brands during this period. Being the crucial one-month period where every brand’s annual performance in Kerala was decided no brand left any stone unturned to ensure its success.

One of the most popular schemes during this period was scratch and win contests or lucky draw contests which would be offered by different brands if you purchased their products. The scheme usually offered a very high value prize like X kg of gold or a fancy car and so on. Most of the companies would provide very attractive and fancy packaging to a lucky draw or scratch card coupons...

Marketing and advertising agencies worked overtime to provide a very elaborate tag line and names to these schemes and very often the entire Onam period marketing campaign of several brands would be centered around this scheme. Since companies used to run these schemes year after year am sure it was one of the reasons which led to the huge sale during this festival period.

The next example which comes to mind where a very big gift would excite me and people whom I knew to participate in something was during the launch of Kaun Banega Crore Pati in early 2001...I still remember there would be some questions which would be put out in the channel that the show was aired on and whoever was interested in participating had to SMS the right answer from the options provided.

Still remember everyone at office and home trying to send messages the moment someone got to know the questions. Even though such messages were charged at a premium by the mobile service providers no one really seemed to bother much about it. If you gave the right answers then you would have to go through several qualification rounds before you actually got a chance to get on the stage along with the host. Even after that there were 13 questions which needed to be correctly answered to get the promised prize of Rs 1cr a huge amount at that time.

It is not that such events were successful and widely followed in India alone. The best example which comes to mind of an international event which was based on this concept was the Pepsi play for a billion which was first run in 2003…

For the contest, Pepsi printed one billion?special codes, which its consumers could redeem either on the Pepsi website or via postal mail, Of these one million were instant cash winners (e.g. a US$20 instant prize). Of all the codes redeemed, which Pepsi estimated to be 200 million-300 million, 1000 were chosen in a random draw to appear in a two-hour live?game shown on Television.

On the evening of September 14, the final day of the contest, the programme Play for a Billion was aired, 1,000 people who appeared on the show each received US$100. Prior to the show, each player selected an individual six-digit number. At a security chamber backstage, supervised by officials of PepsiCo and the Florida Lottery and unseen by the players, a six-digit winning number was chosen. A 10-sided die marked with the digits 0 through 9 was rolled six times; after the result of each roll was verified, a ball marked with that digit was placed in a bag. A?chimpanzee drew one ball at a time from the bag without replacement to determine the order of the digits in the winning number?This number was kept secret and the 10 players whose numbers were closest to it were chosen for the final elimination.

In this game, the players were offered a chance to quit the contest in exchange for a cash payoff, but only one at a time could claim it. If no one accepted a particular offer, the player who was farthest from the winning number was automatically eliminated and won nothing more. The offers, started at $ 20,000 and were increased by $ 10,000 (all the way up to $ 100,000) in every round until only one player was left. That person won a guaranteed US$1 million, which would become US$1 billion if he/she exactly matched the grand prize number. As many as 2 million people participated in this event

So, what is it that makes people to attempt for these gifts or contests even when the chances of achieving the highest prize is logically very remote?

In a study done at Stanford University it was concluded that human brains are far more sensitive to the rewards and the bigger the reward the more sensitive the brain becomes towards the contest or lucky draw or anything similar.

Like I said earlier the chances of a participant winning the biggest award being offered is very remote and in several cases like the Pepsi play for a billion not even one person won the bumper prize in the first year. But the part of the brain that has to respond to the odds of a person winning is much weaker and hence humans ignore this calculation and get attracted towards the big reward that’s in contention…

What would be some of the key things to be kept in mind while trying to run such schemes?

1.??????Concentrate on offering the biggest gifts…The bigger the gift the more the said scheme would be attractive to the targeted audience and the better the response ..

2.??????Structure the scheme in such a way that the probability of winning is very less

Another example which comes to mind in addition to the ones quoted above is the Reader’s digest annual subscription offer that I used to regularly get every year. The scheme was constructed in such a way that even after you satisfied all the conditions that we laid out it would only enable you to participate in a lucky draw which had a fancy gift of very high value and only if someone got the exact lucky number would they actually win these very attractive gifts…

3.??????Tie up with more brands and products so that you can offer a bigger and better prize and the other brands will also share a portion of the expenses helping you to reduce the budgets involved. We find this very often being done in events with names itself being sponsored as Idea Star singer and so on...

4.??????Cover the risks of someone winning the highest prize

Another example of offers that used to come up during the Onam period was additional warranty offers. So, while under normal conditions a color television set had a 1-year warranty during the Onam period brands would offer additional warranty for 3 to 5 and some brands even 6 years.

To cover their risks brands would tie up for the same with insurance companies paying them a very small premium for every television set sold during this period…Even for the Pepsi scheme which was quoted above Pepsi has taken an insurance cover to safeguard themselves in case anyone won the big prize

5.??????Meet the local rules and regulations governing such schemes.

Final Thoughts

A great prize is the nexus of successful giveaways and sweepstakes. It’s what gets people excited about participating in your promotions. To gather high-quality leads that will actually result in more business, choose prizes that are directly linked to your brand to take advantage of that interest in your product or service.

Create a great participatory experience for your target audience by making your Campaign easy and fun to enter and be clear with the rules and conditions. A good prize doesn’t have to be expensive; it’s all about creating the perceived value of the prize and of your brand so that users will want to partake in you have to offer.

While watching this year’s promos I couldn’t seeing such schemes being offered…

To understand if this is due to the growth of e-commerce companies who are keener on offering bigger discounts on certain product categories or because of modified government regulations watch this space for more...