Take the "grudge" out of grudge purchases

I ran across a promotion run by Superior Propane late last year.  Superior is a former employer of mine and I can assure you marketing a commodity like propane can be challenging.  It is in a category I call "grudge purchases" - products and services that you need to spend money on but would prefer not to.  Included in this category are items like electricity, water and sewer, home and auto insurance, transit passes, gas for your car, or tires.

So when I saw ran across this promotion,  I was curious as the company was not prone to use promotions as a way to acquire new business.  What I discovered is an unfortunate reality of many promotions - conceived in the boardroom, designed by the lawyers and offering very little to excite or motivate customers to participate.

The premise of the contest is to generate referral leads from existing customers.  The prize - 1500 litres of propane valued at $1200.  To be eligible, you had to be a Superior customer with a minimum usage of  500 or 1000 litres - can't tell which as the rules specify two different amounts.  Not sure of the legality of restricting to certain customers but this is a topic for a different day.

As well, you need to provide your complete details including postal code, phone number and email address. And the same information for the person you are referring.

It is isn't clear how the contest was promoted and what communication was done to support it. But I suspect the response by customers was low.

Why?

Consider the effort required to submit an entry.  Customers need to collect information from the person they are referring, ask their permission, and then submit the information. This requires a lot of effort and dedication.  This effort is asking alot from customers who probably have very little emotional involvement with the product or the company.

But even more of an obstacle is only one of the two parties receives anything. What is it for the person being referred?  Why would they want their name submitted knowing full well they will get a sales call as a result?

And what about the prizing? I suspect the thinking was why not use our own product since customers use it anyways.  But where is the aspirational element to this prize?  There are dozens of contests and instant win promotions available at any time for customers to participate in. And many offering travel, cash, or other high value prizes.  The chance to win a grudge product does not motivate, excite or even draw attention.

The shortcoming of this promotion is based on several factors including:

1. Over estimation of the value placed by customers for the product. Few products inspire customers or motivate them to go out of their way to promote the company. 
2. A complicated entry process will guarantee reduced response rates. Make it easy to enter..
3. Prizing is critical.  It needs to offer real value and have aspirational elements. I don't think more propane is it.
4. Invest in communication.  Consumers are inundated by promotions. The budget needs to be sufficient to promote the contest. If not, why bother?