Planning A Promotion – Do’s and Don’ts,
and why sticking to the rules is best for your business
I would argue that whatever sector you’re in, there’s a place in your marketing plan for promotions. A carefully thought-through promotion is a very effective marketing tool. It can improve awareness, reward loyalty, encourage product trial or purchase, generate footfall, increase sales, drive traffic to a website and/or create positive PR.
Of course, if you get it wrong, the resulting PR can be overwhelmingly negative, as soft-toy retailer Build-A-Bear discovered. Last year its ‘pay your age’ promotion had customers queueing round the block – until stores ran out of bears and success turned into very public failure as angry parents took to social media to complain on behalf of their distraught children. The Build-A-Bear promotion consequently achieved incredible publicity, but none of it was good.
Following best practice will not only help you avoid this and other types of debacle, but it will also ensure your promotion, whether it’s an instant-win or a multi-stage competition, is legal and complies with all relevant rules and regulations. This includes data protection legislation, which I won’t cover here, but which is an area which must not be neglected. I’m sure it goes without saying that no promotion should encourage entrants to break the law.
How is Promotional Marketing Regulated?
In the UK promotions are quite tightly regulated, primarily through the CAP Code, which is administered by the Advertising Standards Authority (ASA). The CAP Code is based on the principle that all promotions must be legal, decent, honest and truthful, and marketers are responsible for ensuring that their promotions live up to these ideals and don’t disappoint consumers.
In order to comply with the CAP Code, every promotion needs clear terms and conditions. Whether it’s a discount code, a BOGOF, you’re offering a gift when customers make a purchase or you’re running a prize draw, you need to set out certain ‘significant’ pieces of information.
The CAP Code defines significant information as any information which is likely to affect a consumer’s understanding of the promotion and their decision about whether or not to participate in it. Obviously, this will vary from promotion to promotion, but it might, for instance, be the dates when it starts and finishes, any proof of purchase requirements, a description of the type and volume of gifts or prizes available, any restrictions on age or location that apply, and the promoter’s name and address.
Crucially, significant terms and conditions need to be visible upfront, so if it’s an on-pack promotion, they need to be on the pack; if it’s an online promotion, they need to be on the web page describing the promotion or clearly accessible from the relevant post. Customers also need to be able to view the terms and conditions throughout the full course of the promotion, so don’t take that web page down the moment the closing date has passed.
Drawing Up Terms and Conditions
~Business Game Changer Special Promotion~
Because every promotion is different, every set of terms and conditions should be different, so I always recommend you get professional advice from someone who specialises in writing terms and conditions. One of the reasons I say this is because terms and conditions must cover all eventualities, but should also be very easy to understand, and you need to get them right the first time, because they can only be amended or supplemented under exceptional circumstances.
Never – and I mean never – copy terms and conditions from another business or promotion and here’s why. Remember earlier this year when Transport Secretary Chris Grayling commissioned a company called Seaborne Freight to operate a cross-Channel service in the event of a no-deal Brexit? Seaborne was widely ridiculed because its terms and conditions appeared to have been taken from a takeaway food firm and still stated, “It is the responsibility of the customer to thoroughly check the supplied goods before agreeing to pay for any meal/order.” (It’s not the point here, but Seaborne also turned out not to have any ships.)
Beware Of Over-Promising
If you’re giving away a free gift with a purchase, you must ensure you have enough stock available to meet demand. It’s not sufficient to insert a clause into the terms and conditions which says an offer is “subject to availability” and there is no catch-all wording which will get you off the hook.
In 2015 the ASA ruled on a complaint from a Daily Mail reader who had attempted to redeem a Lego toy coupon from the paper at a branch of WHSmith. The promotion did feature the phrase “while stocks last”, but the toy was not available and the complainant believed demand had not been estimated accurately.
In fact, both the newspaper and retailer were able to demonstrate that they had made reasonable efforts to estimate stock levels and the complaint was not upheld, but the ASA emphasised that the promoters were still under an obligation to do everything they could to avoid customer disappointment.
Language And Audiences
The precise language you use does matter, though. For instance, you can’t use the word ‘free’ or synonyms such as ‘complimentary’ unless an item genuinely is free. It must be of the same quality as an equivalent paid-for item would be and as a promoter you can’t inflate postage to cover the costs you incur by offering the free item.
Last year Argos sold a camera for £179.99 “plus free 16GB SD card and case”. A customer complained that Argos was simultaneously selling the camera on its own for £159.99, so the additional card and case were effectively being sold for £20. Irrespective of the market value of the items concerned, the ASA decided that it would appear to consumers as though the price of the bundle had been inflated to include the price of the card and case, so it considered that the ad was misleading and it upheld the complaint.
There are also specific rules around promotions aimed at children and it won’t surprise you to learn that you can’t promote alcoholic drinks to under-18 s. Neither can you encourage excessive consumption of alcohol in any age group.
It’s also worth noting that if your customers are not consumers, but the employees of other businesses, and you want to target them with a promotion, those employees must obtain their employer’s permission before participating in your promotion and if their company has a protocol for taking part in promotions, you must follow it.
Promotions with Prizes
Promotions which offer prizes (as distinct from gifts) are also subject to the CAP Code, but there are some additional rules. The code makes a distinction between prize draws, which don’t require any skill to enter and where the winner is chosen at random – the equivalent of drawing a name from a hat – and competitions, which require an element of skill, such as taking a photograph or writing a hundred words about why you deserve to win.
If your promotion is a prize draw, you need to be able to prove that the winner was genuinely chosen at random and the prize was awarded in accordance with the laws of chance. Unfortunately, the hat method won’t stand up to scrutiny unless it’s conducted under the supervision of an independent observer, but best practice is to use a verifiably random computer process. Many small businesses use Rafflecopter, although there are lots of alternatives, but make sure you retain the evidence that you’ve conducted the draw in this way.
While I’m on the subject of prize draws, don’t confuse a prize draw with a lottery, even though they may be superficially similar. Under the Gambling Act 2005, lotteries are regulated by the Gambling Commission and in some circumstances you may need a licence to run one.
If your promotion is a competition, you need criteria and a judging process, so that you can demonstrate to entrants, and in the event of a complaint, that the winner was chosen fairly, and you need at least one independent judge, who has no connection with you or any of the entrants, and is competent to judge the competition.
Social Media Promotions
Broadly speaking, similar rules apply for promotions on Facebook, Instagram, Twitter and so on, but there are some areas where you need to take extra care. If you run a promotion from your own company’s account or channel, it’s likely to be clear to someone that you’re promoting your own products, so you probably don’t need to label it specifically as a promotion.
However, if you’re working on a promotion with a third party, for instance an influencer, and are a) paying them and b) have some ‘control’ over the content that’s posted, the promotion needs to be labelled with #ad. This applies to affiliate marketing and promotions by brand ambassadors, too.
There have been a number of ASA rulings against high-profile influencers and the brands they work with. One of the earliest test cases was back in 2015, against Made in Chelsea star Millie Macintosh, who had promoted Britvic’s J20 in an Instagram video. She had included the campaign hashtag and some Britvic branding, and also #sp, but this wasn’t until the last frame of the video, so the ASA concluded that it wasn’t immediately obviously to views that this was a promotion.
The ASA doesn’t really like #sp, #spon or #sponsored, or indeed #promo or #promotion, because it doesn’t think those labels make it clear enough to consumers that the content is marketing, so best practice is to stick to #ad. The ASA recently published a guide called An Influencer’s Guide to Making Clear that Ads are Ads, which is very helpful in terms of determining how to label social media promotions.
What Happens If You Get It Wrong?
Anyone can complain to the ASA about your promotion, including your customers, your competitors and journalists. In 2017, the ASA received 27,138 complaints, but it only needs to receive a single complaint to launch an investigation. If someone complains about your promotion, the ASA will ask you to respond and you must do so. The ASA will then consider the evidence and make a ruling, which either upholds or doesn’t uphold the complaint, and which will be publicly available.
The ASA will usually tell you to change your practice and not run the same promotion again. The fact is, though, that even if a complaint against you is not upheld, your business is likely to suffer reputational damage and of course it’s in your interests to follow best practice and take appropriate precautions in order to avoid being the subject of a complaint in the first place.
However, although the ASA is the primary promotions regulator, promotions are also subject to the Consumer Protection from Unfair Trading Regulations 2008, which are enforced by the Competition and Markets Authority (CMA). Although it does this rarely in relation to promotions, the CMA does have the power to bring prosecutions, which could result in hefty fines.
Best practice is important, because it projects a competent and professional image for your business, and helps build customer trust, plus you can handle most aspects of it yourself if you want to, although if in doubt I would always advise you to consult a specialist, particularly on the technicalities of terms and conditions. It’s true that there is much to be aware of when running promotions, but whatever your marketing objective is, they can really work well and be very effective – and they can also be a great deal of fun to put together, because the most successful promotions are creative as well as compliant.
Sarah Burns
About The Author
Sarah Burns is founder and Managing Director of Prizeology, an agency that specialises in prize promotions. Sarah’s particular expertise is compliance and industry best practice. She works with brands and businesses to run fair and compliant promotions, both in the UK and globally, preventing them from breaking regulations to reduce the chance of financial and reputational damage.
