Blog
Article 2: Redemption Rates
Being in this game I obviously get asked all the time about expected redemption rates.
Goes with the territory but it is a question I always dread. If only it was that easy people like me wouldn’t be in business!
Something nice and simple like a little Try Me Free on a bag of lollies might not do very much but put 100% cash back on a pack of razors and suddenly you’ve got a 15% response rate, an unhappy CFO and a stressed Brand Manager.
(unless they covered it with URMA of course....)
When we cost up the briefs that come our way we have to look at all the elements that make up the sales promotion. One point that probably goes under the radar of most people’s thinking is how that product is physically treated. Example being a cereal box. It sits on a breakfast table every morning for the life of the product. It probably gets read and read over again by the same set of eyes. There is plenty of time to read, understand and get interested in the communication.
Ice cream, on the other hand, gets chucked in the freezer and forgotten about - or worse, gets consumed on the spot and the wrapper binned.
Guess what we would be expecting a high response rate on?!
At URMA we rely on our large past redemption database that we have collated over the years, a hell of a lot of experience and just a smidgen of gut feel. The name of our game is to get the redemption rate about right. Get it too high and URMA makes too much margin to show any value for you and your clients. Get it too low and we lose money. In general we like to think we do a pretty good job...
Whilst I do dread the question I can talk about it all day so give me shout, check out the website and generally get rolling out promos that extend their reach to the entire consumer base and generate some noise!
Wishing you and yours every happiness in 2010. See you in the New Year!
Regards
Melissa
