Coupons, sweepstakes, contests, rebates are promotion techniques for changing behavior. Short term, they can change the economic outlooks of brands and the customers who buy them. But we’ve never thought of promotion marketing tactics as a way to change the economic outlook of nations – until now.

Yes, Promotion Could Change Nations.

From the Harvard Business Review we learned about a real life promotion experiment run by Michigan credit unions. It offered “entrants” one entry to win $100, 000 for each $25 they saved. (That’s $25 they kept for themselves and earned interest on, not “$25 they spent” or “$25 worth of product they purchased.”)

Could this be the answer to some of the current U.S. economic woes?
•    Because for the nation as a whole, more savings = less imported capital = more economic independence (from debt to China, for example).
•    And less money devoted to debt service means more money for expanding businesses, hiring employees, buying houses and cars, and so forth.

The Save To Win program at eight Michigan credit unions attracted $8.6 million in incremental deposits from 11,600 savers in 11 months; Nineteen Michigan credit unions will participate in 2010.  Among the 11,600 participants:
•    55% had no previous regular savings plan.
•    59% were lottery players.
•    64% had never used certificates of deposit before.
The program was developed by Harvard Business School professor Peter Tufano, who said: “Saving is really crucial now as the majority of Americans face insecurity about jobs, healthcare and their futures, and we were pleased to offer this easy and fun option to increase saving by credit union members.”

All this is contrary to what we think we know about economics. Save To Win is like a lottery (even though you can’t lose in Save To Win). And a lottery is a perfect example (we’ve always been told) of irresponsible economics. Some call it a “tax on stupidity.” Yet in this case it works.

No, Promotion Is Not The Solution.

On the other hand, sometimes promotion is not the solution to economic woes.
This Forbes article reports on a New York City “sales promotion” that rewarded poor people with cash incentives for maintaining good habits – $25 to $150 for going to the dentist, staying on the job, opening a bank account and so forth.  But after three years, Mayor Michael Bloomberg states that the program “doesn’t work in every case.”  Only 10 percent of families had two dental visits per year, only 1 percent more had health insurance, and only 3 percent fewer used costly services like check cashing. Fewer participants held jobs in the first year, and cash rewards had little effect on school performance or attendance.

Go Figure

If my colleagues and I had seen this programs in the planning stage, some of might have predicted just the opposite: That Save To Win would fail, because of the uncertainty of getting a reward (no matter how large), and that the cash incentives for behavior would succeed, because they’re a sure thing. But that’s logical thinking, and people behave logically only some of the time.

You can find marketing innovation in the oddest places: A construction site along a main road in the western suburbs of Chicago.  And in oddest forms: a giant inflatable cat squeezing a hard-hatted worker in its fist. I had to stop and get out of the car and take this picture.

It made me forget about innovations like social media, segmented direct marketing and search engine optimization for a while, and give some thought to one of the dinosaurs (literally, in some cases) of marketing: the giant inflatable display.

They get attention by blowing up (excuse the pun please) a brand message, like the giant Firehawk inflatable does for Firestone tire stores. But I’ve always wondered what auto dealers were thinking, when they blew up those giant inflatable gorillas, Godzillas and so forth. The only message they deliver is “big.” Kind of redundant, in an auto dealership half a block long, with row upon row of shiny new cars, bright lights, string of colorful pennants and big, big signs. Local visibility and awareness is not a problem. Passers-by do not suddenly see a giant blue gorilla and say “Gosh! I was going to buy some paint at the hardware store. But that big gorilla makes me think I’ll stop and buy a Buick instead!”

The giant inflatable gorillas and Godzillas are an aberration; auto dealers’ usual attitude is that if it doesn’t work, it’s gone. But the giant inflatable cat is an innovation. It doesn’t support a brand (like the Firehawk inflatable), but it does deliver a very specific message. The fat cat inflatable is designed and built to support unions’ picketing of employers at job sites.

A marketing menagerie
It turns out that the fat cat is not alone.  A little Googling revealed there’s a wide selection of giant inflatables manufactured specifically to support labor vs. management messages: A rat, a pig, a cockroach, even a skunk.

They’ve been used in management vs. labor disputes all over the U.S., including baristas vs. Starbucks corporate at the annual meeting, and for striking movie and TV writers. There’s even a flickr photo posting site for fans of the giant inflatable rat.

Leave aside labor vs. management preferences and opinions about negative advertising for a minute.  Imagine the giant (inflatable?) light bulb appearing over the head of the innovative marketer at Big Sky Balloons or Inflatable Images, when he or she first thought “How can I expand my customer base beyond the business segment? What if…I created a product to satisfy the needs of the ‘other side’”?

You’d think that a retail marketer with 36,000+ stores would know how to turn online promotion for a low-ticket product into sales action in the store. And that a high tech marketer would be more likely to make big marketing mistakes, trying to create a sales-building shopper experience for a high-ticket product.

But you’d be wrong.

7-Eleven does it wrong. Their “Wake Up To A Hot Brazilian” online promotion for coffee is a classic example of creativity for its own sake, getting carried away with cleverness and technical wizardry without actually trying to sell anything. While Hewlett Packard does it right. Their movie theater lobby sampling/demo for its HP Photosmart Premium/Touchsmart Web printer lets best prospects get their hands on the product, and then gives them strong incentives to buy.

Customers can visit The 711 Club, a virtual nightclub in Rio de Janeiro, where they can try out pickup lines on other patrons, to earn a downloadable coupon for a cup of real world 7-Eleven Brazilian Bold coffee. But then marketing reality intrudes:
•    How anyone is supposed to know that The 711 Club exists at all is a mystery. There’s no evidence of any traffic-building activity to the site, or the store.
•    The offer is disguised so well that it might as well not even be there. Copy says, “wake up to a hot Brazilian.” But it doesn’t say anything like “get a free (or discounted) coffee at 7-Eleven.”
•    The whole process of pickup lines and earning points on the Mojo Meter is drawn out and laborious, just to get a coffee coupon.
•    There’s no in-store POS presence for the program, at least in the locations we checked.
•    The whole thing seems like overkill, for motivating the simple familiar behavior of running into a C-store for a cup of coffee.

Go where the customers are
By contrast, the HP program is a perfect example of how to “sample” a product that doesn’t usually lend itself to sampling, because it costs around $400.
•    Knowing that customers couldn’t get hands-on with their printer online, and that most people just don’t visit Office Depot that often, HP went where the customers are: Movie theater lobbies in New York, Chicago, San Francisco, San Diego, Miami and Houston.
•    POS and holographic 3-D kiosks turned lobbies into HP live demonstrations, complete with a $50 coupon distribution to drive retail traffic for the printer.
•    During off hours, HP used the theaters to train sales personnel from Best Buy, Target, Walmart, Staples and Office Depot.
•    A tie-in with Fandango even allowed consumer to print out movie tickets.

As more and more marketing moves online, everyone wants to show off, to do the cool digital stuff. They forget that it’s still the down and dirty stuff in the non-virtual world that makes so many of the sales.

Today was one of those increasingly rare mornings when the first scan of the email inbox brought a pleasant surprise. No, I did not discover that I am the sole remaining heir of a wealthy doctor from (Fill in the name of some village in Nigeria). And I haven’t been presented with the opportunity of a lifetime by a manufacturer in Asia whose name I can’t pronounce but who offers me the import rights for an unspecified line of small appliances and computer-like stuff. My surprise and delight was triggered by someone closing the loop on a promotional marketing effort that will be one for the text books. Often we see a really great idea only partially executed. I am sure you have seen stuff that got your attention but failed to ask for the sale or the add-on sale. Here’s one that takes the idea of community, brand advocates and promoters and hits it out of the park.

I can be in the credits of the Paranormal Activity DVD

The email I got was from the nice folks at Eventful. They are the ones with the Demand feature that created the popular support for Paranormal Activity and turned a $15,000 budget film into a multi-million dollar cash machine. Now they are starting to hype the DVD and Blu-ray release by telling me I can get my name in the DVD credits if I register. Thousands of Eventful members who originally demanded the film come to their theaters will now be turned into a word of mouth army telling all their friends they are in the credits. Talk about building early demand for a DVD release! My hat is off to Eventful, Paramount Pictures, and everyone else involved. They have earned a spot in the Biggest Bang for the Marketing Buck Hall of Fame. Well done!

What’s going on here? These promotions don’t seem to make sense.

•    The headlined prize in this summer’s MasterCard “Break In Your Jeans” sweepstakes was a pair of “priceless” jeans; the vacation trip that came with it was hardly mentioned.
•    To promote his film Postal, controversial director Uwe Boll offered contestants a chance to appear in the movie, getting punched in the nose.

•    Within the past few weeks, San Diego’s luxurious Rancho Bernardo Inn offered a $219/night room for just $19…but without a bed.

•    Years ago, a Campari promotion offered the ultimate high ticket merchandise mail-order premium: A Lear Jet for more than a million dollars.

Beyond common sense
Common sense marketing says these are bad ideas. The incentives aren’t very incentivizing. Most of us can afford to buy our own jeans. Few of us can afford a Lear Jet. No one wants a punch in the nose. And if I want to sleep without a bed, I’ll go live in cardboard box on Lower Wacker Drive.

But the MasterCard, Postal, Rancho Bernardo Inn, and Campari programs go beyond common sense. Their ideas are more important than their incentives. The objective is buzz, not behavior change. These promotions make advertising work harder by offering customers the chance, however unlikely, to be participants and not just spectators.

Incentives to pay attention
They should be a wake-up call to all the marketers who keep trying to make sense, offering what customers say they want: Vacations to the “popular” destinations like Disney World. Minivans. Caps with sports team logos. Gift cards. Home makeovers. And so forth, and so on, until we all fall asleep.

Yes, Disney World, sports caps and gift cards are good, rational, value-driven incentives. And yes, they can change behavior, some of which probably shows up on the bottom line. But as ideas, they’re easily accessible to every other marketer, so there’s a good chance they’ll be invisible in a blizzard of similar competing communications.

Think of ideas like the jeans, the punch in the nose, the bare-bones $19 room and the Lear Jet as incentives to pay attention, to be used in addition to (not as a replacement for) more conventional behavior-driving incentives.

I recently came across a business in Naples, Florida promoting ‘Wild Wednesdays’, with great deals and offers.  Problem was:  it wasn’t a bar like Hooters, offering draft specials and two for one shots.  It wasn’t a restaurant, offering a crazy party atmosphere while shucking oysters.

It was a dry cleaner.  It was wild by offering discounts on starched business shirts.  Which kinda prompts the thought that if retirement is all about having ‘wild Wednesdays’ at the dry cleaners, then keep working, man, keep working.

But the key point is this:  make the promotion theme make sense.  It’s hardly ‘wild’ to give a discount on starched business shirts in a climate where no one wears one (apart from doctors, realtors, and funeral directors).  And saying it’s ‘wild’ without doing anything at the store (balloons?  an inflatable gorilla?) is just a let down.  By all means, excite and stir the imagination with a theme.  But be real, and realistic, with the audience and offer you make.

Overclaiming leads to overdisappointment.

Eh. Ho hum. Yawn. How many times have your eyes glazed over, reading guarantees like this?

“Friendly service, clean rooms, comfortable surroundings, every time. If you’re not satisfied, we don’t expect you to pay. That’s our commitment & your guarantee.”

It’s from Hampton Inns, and it’s typical of the meaningless copy in too many marketers’ guarantees.

Not your typical tired old guarantees
But now some marketers are exploring new ways to add some intestinal fortitude to their guarantees.  They go way beyond the conventional “money back if performance promise is not met” or car dealerships’ “if you can find a lower price we’ll beat it ” offers.

•    The big breakthrough came early in 2009, with Hyundai Assurance: “Finance or lease any new Hyundai, and if you lose your income in the next year, you can return it with no impact on your credit. Sound too good to be true? Come and see us and we’ll put it in writing for you.”

•    “Me too!” marketers quickly jumped on the bandwagon. The Ford Advantage Plan offered 12 month payment coverage for customers who lost their jobs. Toshiba Computers’ No Matter What Guarantee told customers purchasing a laptop they could claim a refund should they lose their job within the first year of purchase, and keep the model purchased as part of the deal.

•    Harley Davidson’s We Ride Free Guarantee told bikers they could buy a new 2009 Sportster, ride it for up to year, then get the full purchase price as trade-in value.

•    California Lutheran University’s 4 To Finish Guarantee reassured parents worried about college costs – incoming freshmen will graduate in four years, or the college will pay for any remaining classes.

•    And back in 2007, Sonicbids rock band booking service’s Get A Gig Guarantee offered member bands a free 6-month membership extension if they did not secure at least one gig over the course of the next 6 months.

Between brand promise and brand promotion
These guarantees are proactive, not reactive, directly driving business during a recession, the right time for extra reassurance when the brand reputation may not be enough. They fall into a gray area between brand promise and promotion, and actually add to brands’ perceived value.  They’re stronger than generic “satisfaction” guarantees because they require a specific performance and offer a specific remedy. And they’re cost-efficient, because customers succeed when marketers succeed – it’s not in customers’ best interest to take advantage of the guarantees.

In April Pepsi introduced special Throwback Pepsi and Mountain Dew products, made with natural sugar instead that controversial sweetener high fructose corn syrup. Then in June they snatched them away.

Their press release announced:
“Pepsi and Mountain Dew are offering consumers a taste of the past with their own versions of Throwback, two new limited time only products inspired by the ’60s and ’70s, sweetened with natural sugar in a retro-look package.  For some, it will be a trip down memory lane, but for those too young to remember, it will be
a chance to experience a new twist on their favorite brands.  Pepsi Throwback and Mountain Dew Throwback will be available nationally for eight weeks only, beginning April 20.”

There’s a problem here. But it’s not the health advantages, if any, of sugar vs. corn syrup. Nor is it the Throwback name and retro 1960s/70s creative. Pepsi’s mistake was in thinking promotion when they should have been thinking product.

In the kids’ game called “keep away,” aka “monkey in the middle,” two players toss a ball back and forth, trying to keep a third one (usually a younger brother or sister) from even touching it. It’s kind of cruel. And it’s a little like what Pepsi did with Throwback. They introduced it as something better, persuaded us to try it and buy it, then proceeded to play “keep away.”

There’s excitement in added value that’s available only for a limited time. For products like Pepsi, this usually means something like a larger size or a novelty promotional package But this is a case where the fundamental long-term value of the product itself is made better (or better for you), then allowed to regress to its former state.

Brands like Log Cabin, Snapple, Starbucks and Ocean Spray are all replacing high fructose corn syrup with sugar – permanently. This increases the perceived value of their products. But with Pepsi the value is here today, gone tomorrow. Could this sweet end up leaving a sour taste in lot Pepsi drinkers’ mouths?

This promotion is not.

Small businesses are like stray dogs. That’s what Office Depot seems to be saying with the theme of their current promotion: “Adopt A Small Business Contest.” And that’s just the most noticeable of all the marketing mistakes in this dog of a promotion.

Today, many large businesses are targeting small business customers. Some of them make mistakes; it may be because they’re just learning how to approach this market. But as a retailer with a long record of service and a physical presence in local small business communities, you’d think that Office Depot would know better.

Why do we hate this promotion? Let us count the ways:

1. The main theme is insulting, and irrelevant too
Start with the “Adopt A Small Business” theme. Not only is it potentially insulting, it’s irrelevant. Nowhere in the promotion is anyone invited to do anything vaguely like adopting a homeless dog, or a stretch of littered highway, or a small business in need of help.

2. Theme overload is confusing
In addition to “Adopt A Small Business,” the promotion website shouts out “Survival Of The Smartest” and “Small Business Self-Bailout.” Was someone trying to satisfy all the creative factions at Office Depot? Which idea are we supposed to pay attention to? Are these themes supposed to make small businesses feel good, let alone participate in this promotion?

3. The prizes are boring
The contest prizes have powerful appeal for small business people…the ones with insomnia. Each prize is all Office Depot: A $1300 gift card, a year of technical support, and another $110 gift card for copying/printing/shipping. We can hear the snoring starting now. Yes, we know that high value is important in prizes. But excitement is far more important, and these prizes are self-serving, and about as exciting as a ream of copy paper. We detect multiple business units at Office Depot, each trying to be sure they have some “presence” in the promotion.

4. Participation involves way too much work
The idea seems to be that small business people have to work hard. So let’s make them work even harder. To enter the contest, Office Depot tells customers to “upload a 2-minute video that explains the smart things your small business is doing to survive these challenging times, and how Office Depot is helping you get through them.” How much time and effort are small businesses willing to waste, for an off chance to win $2000 in office supplies? The one thing small businesses need most is more time to focus on their business.

5. Support communications are just plain dumb
There’s a long history of very funny comedy duos: Laurel and Hardy, Abbot and Costello, Cheech and Chong , Burns and Allen and more. But Office Depot’s Matt and Matt will never be among them. Imagine a couple of fresh-faced, entry level assistant brand manager types pretending to be small business owners, trying to do stand-up comedy. In the online video introducing the program, one Matt recites the contest rules while the other Matt makes dopey remarks. Nice try, but not funny. In another video, Matt and Matt narrate as a female small business owner beats up on a “Recession Aggression” beanbag chair. The point of this video is….who knows?

All this leads to the ultimate question – a modern day, marketing-oriented version of  “Other than that, how did you like the play, Mrs. Lincoln?” To which we answer: “Well, the rotating panoramic in-store display graphics were kind of cool.” Unfortunately, this doesn’t make up for this dog of a promotion being all bark and no bite. Maybe it’s time Office Depot got a bit smarter.

Apologies, to Mick pictured above. He’s too good to be associated with this “promotion”, but he is darn good looking…and a smart dog.

New Dog, Old Tricks

Here’s a test question most of my Loyola Grad School students get wrong in my promotional marketing course, even though I explicitly tell them this will be on the final exam. True or False: “The on-going advancement of Internet marketing is resulting in new breakthrough promotional tactics that are replacing traditional tactics.”

False. Those who choose True are confusing media with tactics. Yes, the Internet, blogging, tweeting, Facebooking, You Tubing, etc. have ushered in a few new promotional tactical capabilities. But by and large, traditional tactics are being delivered in new wrapping – digital media.

The fact is, retail match-the-display-and-win is the same as match-the-site’s-code-and-win; retail collector cards are the same as web-based point programs; print coupons are the same as web coupons, only less viral (and more accountable).

Before interactive and user-generated promotions there was the Pillsbury Bakeoff. In fact, the Bakeoff may generate more bottom line profits because it’s driving purchases rather than website visits.

There’s even a reverse trend – retailers are increasingly refocusing efforts toward store traffic programs versus web-only visits because incremental impulse sales are 50-70% at retail. When they’re in the store, they purchase more.

Check out the attached promotion oldie. The match-&-win tactic drives participants right to the product, coupon in hand, where they examine the actual product to see if they win. And they can still win an unclaimed prize when they redeem the coupon. That’s an interactive promotion designed for in-store sales versus website visits.

Bottom line, the operating promotional principles remain the same, and if you want a breakthrough digital generation promotion, you might first revisit the masters – the original print-delivered promotions.

Maybe using a Wendy’s line to query a McDonald’s promotion in London is a bit off kilter, but the point is clear – what does it have to do with selling hamburgers?  Is there a promotion at the McDonald’s on Shaftesbury Avenue or Regent Street, offering those who take a picture to a special meal deal?  Or is this just another ‘hey here’s a neat stunt that we can film, involving mainly foreign tourists’?  Reminds me of the seaside boards where you pose with the face inside the image, only with a mobile phone spin on it.  And about as impactful at shifting hamburgers and fries, I’d have thought.  But I challenge  McDonalds to prove me wrong on this one!