Know-How Exchange : Strategy

Hello Leanne, welcome to KHE.

You can fix this quite simply. Just have your lawyers insert (or write yourself) a clause in the terms and conditions that makes distributors, dealers, retailers, employees and their families, and agents and associates of the company, ineligible from entering.

When points are redeemed, simply check who the redeemer is. If they're a retailer or one of the other excluded categories of person, void the redemption.

Create a database of redemptions - and if one person seems to be making an unreasonable number of redemption claims, check them out and void their claim if they have rorted the system

Limiting quantities of collateral items will only limit the reach. You want the retailer to understand the objective of the promotion is to create extra sales, and that means more profits for them, as well as you.

Perhaps you could also consider having a separate promotion for the retailer that goes hand-in-glove with the consumer promotion. Horses for courses.

Hope that helps.

ChrisB

Hello again

What I posted before was:
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Hello Leanne, welcome to KHE.

You can fix this quite simply. Just have your lawyers insert (or write yourself) a clause in the terms and conditions that makes distributors, dealers, retailers, employees and their families, and agents and associates of the company, ineligible from entering.

When points are redeemed, simply check who the redeemer is. If they're a retailer or one of the other excluded categories of person, void the redemption.

Create a database of redemptions - and if one person seems to be making an unreasonable number of redemption claims, check them out and void their claim if they have rorted the system

Limiting quantities of collateral items will only limit the reach. You want the retailer to understand the objective of the promotion is to create extra sales, and that means more profits for them, as well as you.

Perhaps you could also consider having a separate promotion for the retailer that goes hand-in-glove with the consumer promotion. Horses for courses.

Hope that helps.

ChrisB

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You then asked some questions (italicised) to which i provide my responses (bold) below:

Is it mean that I have to check each person who send it the redemption card by calling them?
No. That would be too costly and out of all proportion with the promotion. But you should log each winner in a database and use that to check for multiple redemptions - and for future marketing.

What if those shop owners just ignore the terms and condition?
That can happen, of course. But will they really have the time to do that? And why would they bother? What are you giving away - free gold bricks? If what you are providing is something very valuable, then I suggest you need to think harder about a proper "proof of purchase" - Maybe the receipt from the cash register - to accompany each redemption request.

There's no way for us to find out if the person is direct family to the shop owners or not.?
No, I don't suppose there is. Why would that matter? See proof of purchase idea - above.

The shop owners might use their relatives' details to redeem the free gift, and I don't think we have any way to trace them out.?
If what you are giving them is very valuable, you do need to establish a proper proof of purchase system.

I understand is extra profit for the retailers yet they would probably think that is no harm for them to redeem the free gift. After all, is free. Even if we are to plan out another trade promotion for them, they would still abuse the power of the stamp to get more free gift.?
Maybe... Just how much can you trust them? It sounds like you have no trust whatever. In the absence of trust, there needs to be a system of checks, balances, evidence and proof. You need the purchase proven. Who cares who bought the item?

Do you think all this would happen??
Depends on what you are giving away, and how valuable it seems to the retailer, compared with the value they derive by running the promotion properly.
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Some further points for you to consider:

Have you done an estimate of costs and redemption rates, against the incremental sales increase budgeted?

Suppose I buy my dog food from a pet shop. Every ten purchases I get one free. They stamp my card and tell me when I am due for my free pack of dog food. The manufacturer would know that they are giving the pet shop a free package for every ten packages purchased by the pet shop AT THE VERY MOST.

This avoids the manufacturer getting involved in the logistics. The pet shop hands over the free package, it is not delivered to my address separately.

I only buy my dog food in a proper sealed package so I know it is fresh and uncontaminated. If the shop started trying to sell me an unpackaged alternative I would reject it.

Sounds to me like you may be making hard work of this relatively simple promotion. If you have written up how you think the promotion works, I am happy to read your document and point out where I think you may be going wrong.

You can contact me via my profile.