Using traditional promotions to reach Generation Y doesn’t work.

Let’s just get that out of the way. We’re normally not supposed to start articles like this on a down note, but you need to know what doesn’t work before we can really talk about what does.

Generation Y — those born between 1977 and 1994 — don’t respond to regular promotions. They don’t watch TV, they don’t read billboards, they don’t do direct mail. But they’re such an important target to marketers, that most marketers are looking for any kind of promotions to reach Gen Y.

So why Y?

Because they’re a consumer power that actually outnumber the Baby Boomers. There are 82 million Gen Yers, give or take a few, and only 78 million Boomers. Generation Y are 26% of the population, and their spending power is more than $200 billion, plus they influence another $300 – $400 billion. According to some reports, Gen Yers influence over 50% of their family’s car choices.

Tantalizing, huh? But if you can’t reach them with traditional promotions, how do you do it?

That’s where online and digital promotions become important. Generation Y is online. That’s where they grew up, that’s where they get their information. When asked where they get their news, most Gen Yers said “Yahoo.” They watch YouTube videos on their phones. They communicate through texts, and use Facebook.

In short, Generation Y wants you to communicate with them, not market to them. So what are some promotions ideas you can use?

First, you need to go where they are. Before you start any sort of Gen Y promotions campaign, get to know them. Figure out who your target audience is, and where they like to hang out, what they like to do, where they get their entertainment.

Vans Shoes, makers of the famous skateboard shoes, built skateboard parks in California and Florida. They sponsor a skateboard team. When their customers need to buy new skateboard shoes, they buy the ones they see at the skate parks, or on the shirts of the team from the skate competition.

Tampax sponsors a social network for young girls, without blatantly marketing to them. They place their logo discreetly on the network, while young girls connect with each other and discuss whatever young girls discuss. The logo just sits there. Then, when it’s time to go shopping for feminine products with their moms, they choose the product they see on their network.

Brands like Mountain Dew, Nokia, Coca-Cola, and Chrysler are paying video game developers for product placement promotions inside video games. Tony Hawk’s Ride, EA’s NBA “2K10,” and Need for Speed: Shift are just a few of the games that include ads. Whether it’s billboards, vending machines, or traditional sports advertising venues (like sponsor signs inside an arena), video game promotions are an excellent way to reach Gen Yers. Remember, Gen Y influences more than half of their family’s car purchases, so putting car ads in video games makes great promotions sense.

Text clubs are another form of digital promotions. Since most Gen Yers are communicating with each other via text, they’re a great way for local businesses like restaurants and clubs to reach Generation Y. Text clubs are opt-in marketing efforts. A restaurant can use text clubs to advertise hidden specials — “free appetizers with dinner, tonight only” — or a club can send out sneak previews about bands or drink specials.

When you’re creating your B2C marketing campaign, make sure you give digital promotions a good, hard look in order to reach the elusive Generation Y. With their spending power and large population, it’s important to connect with them now, so as they grow older and their spending power increases, you have earned their brand loyalty and top-of-mind awareness.

Promotional risk coverage eliminates the budget uncertainty associated with offering large prizes, attractive coupons, and generous rebates and premiums to your market. It gives you an opportunity to launch exciting marketing campaigns through which you offer high-value promotions that would otherwise lie beyond your budget. Such promotions attract attention. They excite people and generate an enormous response. As a result, you’ll enjoy a higher volume of in-store and online traffic, a surge in customer registrations, and a growth in sales.

As the economy continues to struggle, it is more important than ever that you stretch your marketing budget. Moreover, competition is increasing within every space. You need to have a way to differentiate your brand and products to an audience that is bombarded with promotional offers. Promotional risk coverage helps you to design exciting contests and games whereby consumers have a chance to win bigger and more compelling prizes. And you’ll be able to do so at a fraction of the prizes’ value.

Promotional Risk Coverage Protects You From Budget Overruns

Suppose you have a marketing budget of $15,000. You want to design a promotional contest that gives your customers the chance to win a $500,000 prize. The prize value is obviously much larger than your budget; it seems out of reach. Promotional risk coverage makes this type of contest possible.

The risk is placed with an insurance company. To outsource the risk, you would pay a small fixed fee. If a contestant wins the $500,000 prize, the promotional risk coverage takes effect and the insurance company steps in to cover the difference.

This same risk mitigation strategy can be easily integrated with your coupon programs, rebate offers, and high-value premiums. For example, suppose you want to launch a coupon program that carries a redemption value of $750,000 on a popular brand of deodorant. With a $15,000 budget, this may seem all but impossible. Promotional risk coverage makes this type of high-impact promotion possible by removing the risk of a larger-than-expected redemption rate.

When you notice your competitors offering staggering chance-to-win prizes of $1 million, it is not because they have a $1 million marketing budget. Chances are, their advertising budget is limited. They are able to design these exciting marketing programs because they are using promotional risk coverage to extend their impact. You can take advantage of the same opportunity.

Advantages Of Promotional Risk Coverage

The obvious advantage of promotional risk coverage is that it amplifies the impact of your marketing budget. It stretches every dollar. In reality, the benefits extend much further.

First, large prizes, coupons, and premium offers attract attention. They generate excitement and encourage consumers to participate. That gives you a chance to penetrate new markets, establish a presence, and improve brand awareness.

Second, by designing high-impact programs, you’ll quickly build a customer database that you can mine for future marketing campaigns.

Third, programs that leverage promotional risk coverage to offer massive chance-to-win prizes inevitably increase sales. This is due to the exposure you’ll enjoy as your customers get excited about the prizes.

Creative Marketing Campaigns With Promotional Risk Coverage

A lot of companies use promotional risk coverage to launch contests, games, and marketing programs at a fraction of the prize or redemption value. With a little creativity, you can design promotions that leverage this risk mitigation strategy even further.

For example, suppose you would like to launch a promotion that awards a $25,000 guaranteed prize. Promotional risk coverage will not cover guaranteed prizes, but it can eliminate the budget uncertainty of chance-to-win prizes, coupons, and high-value premiums. Instead of dedicating your budget to a $25,000 guaranteed prize, why not design a promotion that blends multiple types of promos? For instance, offer a $5,000 guaranteed prize, a $100,000 chance-to-win prize, and a $250,000 coupon program. Promotional risk coverage gives you the flexibility to design this type of creative marketing program.

Brand Differentiation With Promotional Risk Coverage

Differentiating your brand and products will always represent a major competitive advantage for your company. The challenge is using a strategy that excites your customers while keeping a tight rein on your advertising budget. Promotional risk coverage lets you offer high-value prizes, coupons, premiums, and rebates without concern for going over budget.

Would you like to generate excitement in your market by offering consumers a $500,000 chance-to-win prize? You can do so at a fraction of the prize value. Want to launch a $250,000 coupon program to stimulate a response and attract new customers? Doing so is easy at a small percentage of the program’s redemption value.

Invest the time to explore how promotional risk coverage can help you engage your audience, excite your market, and catapult your sales.

–Cyndi Walker, Promotional Currency

Promotional incentives are a powerful marketing lever that brand advertisers can use to engage and excite consumers. They play a key role in launching new products, lifting sales of existing products, and cultivating customer loyalty. From the smallest “mom and pop” retail stores to the largest brands in the world, promotional incentives encourage people to experience products they might otherwise ignore.

Creative Ways To Leverage Promotional Incentives

Giving away free items is one of the most effective ways to stimulate a response from your target market. Nothing excites consumers more than the chance to receive something with a high perceived value for free. There are a variety of ways in which you can use free promotional incentives to motivate your audience to take action.

You can give your customers something for free in exchange for trying a new product or service. For example, Starbucks recently launched their Via brand of instant coffee and used promotional incentives to spearhead the effort. They organized a Via Taste Challenge to entice customers to try their instant brew. Customers in the Los Angeles area were asked to order a cup of Via. In return, they received a coupon that could be redeemed for any cup of coffee in the future.

You can also use promotional incentives to create a surge in sales volume around your brand. For example, Estée Lauder launched a promotion in October 2009 called “Your Beauty. Your Style. Your Profile.” They invited women to visit participating counters and receive a free makeover and photo. The photos were emailed to women so they could be uploaded easily to dating and social networking sites. The Estée Lauder logo was in the background of each photo, strengthening their brand.

Using Promotional Incentives To Collect Customer Information

In the Estée Lauder example, the promotional incentives were emailed to women who received makeovers. That means in order to receive their digital photo, women had to provide a working email address. This mechanism helped Estée Lauder to create a database of customers to whom they could market their products in the future. For example, they can email these customers a targeted holiday promotion focusing on the products that were used during the makeovers.

Mobile promotions such as music download promotions can offer this same advantage. When consumers visit your customized landing page to download your promotional incentives (e.g. free music downloads), you can require them to provide their contact information. In doing so, you’ll build a database of customers for future marketing campaigns.

The Advantage Of Delivering Promotional Incentives Online

When your promotional incentives are delivered online, your expenses are limited to whatever it costs to fulfill redemption. For example, suppose you’re offering free music downloads to people who spend $70 at a certain clothing store. Provide a website address and promo code on their purchase receipt that directs them to your download site. They can redeem your promotional incentives online, which helps to minimize your costs while exposing customers to your brand and products.

Or, suppose you want to deliver a “buy three and get one free” promotion to customers’ mobile devices. The cost of delivery is practically zero. The same is true for launching instant win games, skins promotions, offering free ringtones, and other digital promotional incentives. While the cost is low compared to traditional advertising channels, the impact on your audience is high.

Why Promotional Incentives Are Effective

Brand sponsors realized long ago that promotional incentives were a potent trigger for stimulating a response from their market. Each year, billions of dollars are spent to launch promotions that improve brand awareness, drive traffic and sales, and strengthen customer loyalty.

The reason promotional incentives are so effective is because people always enjoy the chance to receive free products they consider valuable. Whether the incentive is a free tank of gas, limited access to an online fee-based service, or free song downloads, consumers are happy to participate. In some cases, they’ll increase their purchase order or buy new products in order to take advantage of a promotion. In other cases, they’ll willingly exchange their contact information to receive your promotional incentives.

Your marketing campaigns are ultimately designed to sell your products. The challenge is to motivate your audience to buy them. Digital promotional incentives will excite your market, educate them about your products, and encourage their loyalty to your brand. And they’ll do so at a lower cost than using other advertising channels. Now is the time to explore how promotional incentives can drive traffic and increase sales for your company.

Promotional Currency is THE leading digital promotions firm, merging digital technology, artist licensing and promotional risk coverage to deliver turnkey, fixed-cost solutions for the promotional marketplace.  Promotional incentives such as music download promotions, ringtone promotions, mobile promotion, skins promotions and online instant win games and sweepstakes are powerful, multi-pronged promotional marketing tools build customer loyalty and drive sales.

–Cynthia Walker

Entertain your consumers with promotional incentives to differentiate your brand and boost sales through increased brand interest and customer loyalty.