There are many ways to promote your business in Australia. However, do you know which type of promotion is the most effective for your business? There are many factors to consider, such as the purpose of the promotion and your budget. This article discusses the different types of promotions and how to choose the most appropriate one for your business.
There are various marketing devices you can use to promote your business through competitions and offers. Common examples of competitions are:
- games of chance (i.e. competitions based solely on luck, such as drawing someone out of a hat); or
- games of skill (i.e. competitions that involve skill, such as ‘tell us in 20 words or less why…’).
Common examples of offers are:
- loyalty programs; or
- gifts given with each purchase.
However, you need to bear in mind that the marketing device that you choose must comply with the relevant laws. So what should you consider when deciding which promotion is best for you and your business?
The first question is usually ‘what is the purpose of the promotion’? For example, if you are a startup, you might want to run a promotion to introduce your business to the public or a specific industry. If so, you might want to run a promotion that offers a gift to the purchaser. This may help to introduce your goods or services to the market.
Alternatively, you may wish to run a loyalty program to attract and maintain customers on a long-term basis or to expand your customer base. For example, if you provide social media services, you may consider giving your customers that have signed up for two years or more a free trial of your other products that require a further subscription.
You will also need to consider the costs of establishing and running the promotion. The costs involved in each type of promotion vary considerably. If you intend to run a game of chance on a national basis, you may need a permit in certain states. In order to obtain the required permits, you must provide the permit offices with the terms and conditions of your promotion which must meet the states and territories’ lottery laws. Although this may be a burden, it is generally a one-off cost at the start of the promotion.
If you want to use a loyalty program, there might be ongoing costs because of its longer lifespan. However, if you want to run a promotion giving gifts with a purchase, this is usually easier to manage the costs, as they are easy to predict.
You may also want to take into account the resources you will need in order to run the promotion. If you wish to avoid the costs of permit fees, you may decide to run a promotion that involves skill (as it does not require any permits). However, it may require more resources to run. For example, your game of skill may require that entries are individually judged based on their creativity, i.e. “describe in 50 words or less why you deserve this holiday”. If you are expecting 2000 entries or more, consider whether you have enough people to assist you in judging these entries consistently.
Running the Promotion
You might also want to consider how you are going to run your promotion (i.e. online, in-store or at a particular event). You may not receive as many entries or attention to your business as you would like to if you choose to run a game of skill at a particular event. For example, it is unlikely that people will spend the time to think of a creative response as opposed to putting in a quick entry for a lucky draw (game of chance).
There are legal implications depending on the type of promotion you end up adopting. For example, you have to make sure that you comply with the Australian privacy laws if the promotion involves collecting, storing or using customer information.
Furthermore, if you want to create a loyalty program, you will likely want to make sure you reserve your right to amend the loyalty program over its lifespan.
You will also need to make sure your promotion does not breach the Australian Consumer Law or other industry codes if you advertise the promotion to consumers.
There are many types of marketing devices you can consider when promoting your business. However, there are many factors to consider before choosing what type of promotion is most suitable for your business. Regardless of which promotion you choose, you should be aware of the laws and regulations you need to comply with. If you have any questions about running a promotion for your business, you can contact LegalVision’s marketing compliance lawyers on 1300 544 755 or fill out the form on this page.
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