Fixed fee allows the promoter to allocate one specific budget and frees up liability on the accounting books. The promoter can then sleep soundly on the knowledge that, if the promotion redeems higher than expected, not only are the costs capped up front, URMA actually fund all costs of consumer over-redemption. With fixed fee, the money is paid up front, so effectively the cover for the promotion is paid for in advance.
Fixed Fee means a one off payment made at the commencement of the promotion. The fixed fee covers all redemption/win costs (including gift and handling) from zero to 100%.
The main objective of the risk management assessments URMA provide is primarily to allow companies to calculate the cost of a promotion and the potential ROI prior to committing to it. URMA works to highlight the areas where the risk lies by pinpointing specific areas of weaknesses in the processes and ensuring that all parties are aware of the potential impact of each nuance of the promotion.
Risk management limits a company's financial exposure to the success of a promotion. Normally the risk occurs from higher than expected redemption rates and their costs. Risk also can be hidden in excess (or shortage of) promotional stock, errors in the redemption processes and set up as well as the validation and reporting from third parties. All issues that URMA understand and can mitigate.
Another Hoover free flights fiasco – probably the most famous of all promotions that have gone financially wrong. Brand Managers and Account Managers should acquaint themselves with the options and risks before they enter into a financial and legal arrangement with consumers.
It is essential that you work with a risk management provider that you trust and feel comfortable with. It is also paramount that you have legal documents/contracts in place which detail every nuance of the promotion you intend to run. These acts are your blueprint and you must ensure the promotion is then run within these guidelines. Within the contract you (the promoter/client) must have disclosed all the details of a promotion (in particular any past history) or there could be problems should a claim be necessary. You are well within your rights to be named in any third party documents or policies which relate to the promotion and you should also to be supplied with such paperwork for your records.
The URMA team would like to be involved from the outset but panic telephone calls to their offices, a week before a promotion goes live, are not unusual! If we are involved at an early enough stage we can help tailor the risk in the promotion so that it comes in at the right budget for the promoter. Depending on the complexity of the promotion we like to have at least 48 hours to assess the risk and provide back our recommendations and/or costs.
