Promotions As a Marketing Tool: The Devil Lies in the Details
One of the most effective marketing strategies in business is to give consumers discounts or promotions. How these offers manifest themselves varies from industry to industry and business to business, but the underlying premise is always the same: give people something extra. The value of this proverbial extra can be the primary focus for a lot of people. That’s understandable. The more lucrative the offer, the more likely people are to engage with it. We’ll provide some evidence to support this point in a moment.
Before that, let’s get to the point of this guide. As important as the headline offer is, the real value of a promotion lies in its terms and conditions. This fact is best illustrated by online casino offers. Online gambling started in the late nineties and, since that time, it’s become a tightly regulated industry. Operators need to be licensed in the regions they’re active which, in turn, means they must comply with rules and regulations. These rules cover everything from the integrity of a casino’s software to the promotions it offers.
Terms and Conditions Keep Everyone in Check
Therefore, when you read through the terms and conditions attached to a free spins bonus, for example, you’ll see that both the operator and player have obligations. From the casino’s side, it’s legally bound to pay out bonus credits as advertised as long as players fulfill their obligations. These obligations include making deposits of a certain amount, wagering certain amounts before requesting a withdrawal, and satisfying all the terms within a specific amount of time. These terms are all listed as wagering requirements and they can turn a good offer into a poor one.
For example, Casino A could offer 50 free spins and credit any wins to a player’s balance in cash. Casino B could offer players 150 free spins but credit wins to the player’s balance in bonus cash. This bonus cash can’t be withdrawn until the player wagers 50x the amount they’ve won. So, assuming they win $50, they’d need to stake $2,500 of their own money before they can make a withdrawal. This is a clear example of why terms and conditions matter. The 150 spins bonus looks better on the surface. However, once you realize that it could cost a player money to claim their winnings, it doesn’t look as appealing.
Don’t Sully a Good Deal
We’re not saying that companies shouldn’t protect themselves with certain terms and conditions. The point here is that you can’t lure people in with an eye-catching offer only to upset them later down the line with overly restrictive terms and conditions. Consumers have access to more choices and, importantly, more information than they did 25 years ago, so don’t take advantage of them unnecessarily. People respond well to promotions.
A study by Dr. Paul J. Zak of Claremont Graduate University found that consumers experience a boost in oxytocin levels when they see an opportunity to save money or get something extra. This creates a positive association in the consumer’s brain which increases the likelihood they’ll buy something. However, if the same consumer accepts a deal only to find out they’re not getting something quite as generous as they expected, the positive association can easily be destroyed. The lesson here is simple: promotions shouldn’t be based on eye-catching offers alone. Make sure the terms of a deal are fair for everyone. Get this right and promos can be a great way to increase sales for your business.