There are several ways brands go about getting consumers excited and engaged with their brand – promotions, coupons, and giveaways are just a few ways they do this.
A unique way that enables a brand to offer amazing prizes with large prize pools is an insured promotion. Insured promotions provide a brand all the benefits of offering a large prize pool, but at a lower risk. Sweepstakes, instant wins, online games, skill competitions, and conditional promotions are examples of promotions that can be insured.
To offer a prize pool of one million dollars, a company does not need to have that amount of money on hand; they just need an insurance plan. This cost is determined based on the value of the prize, the probability of the prize being won, and how many plays are allowed. This allows a brand to stay within their budget and offer prizes that create a buzz and excitement.
Take for example:
A brand wants to offer a chance to win $1 million. There are two ways a brand can go about insuring this offering. 1) The brand can insure on this full amount and if the prize is won, the full $1 million will be paid to the winner 2) The brand can have an insured annuity offering, where they can offer $1 million in prizing, but if the prize is won, the winner will have an option of choosing $XX, XXX to be out in X years (this will total $Million), or taking a lump sum that is a pre-determined value. The brand would pay an insurance premium on the lump sum and not that of the $1million. If the company wants to offer a prize like this as cheap as possible, option 2 is the more affordable way.
Another reason it is a great idea for a brand to go with an insured promotion, is that it takes away a lot of financial risk that can be taken on when running a promotion. With an insurance plan in place, a brand will not go bankrupt if the prize is won, or if they exceed their expectations with game plays/participants. If the odds are in favor for the consumer and the prize is won, the insurance company who insured the promotion will be liable.
When choosing to run a promotion, it is a great idea for a brand to consider an insured promotion. Not only does it allow for increased participation, but also creates a higher impact. Create an offering that consumers will want and success will follow.
- Promotional Insurance