Promotional Marketing by Roddy Mullin

Author:Roddy Mullin
Language: eng
Format: epub
ISBN: 9781351341257
Publisher: Taylor and Francis

BRIEF 10.1. Sky, Red Letter Days and Virgin voucher offers. Sky offers a £25 M&S voucher if the shopper introduces a friend. Red Letter Days and Virgin offer adventure experience vouchers.

Insurance offers

The offer

Every car owner or mortgage holder is obliged to hold relevant insurance. Take-up of other insurance products – for house contents, legal expenses, personal accident, travel and so on – varies enormously and is very much lower. Every type of insurance can be used as a promotional premium, but the less widespread products are particularly attractive. The growth of websites that find the best insurance offers are testament to how lucrative the business is. Many banks offer travel insurance to their top customers.

An insurance principle also lies behind assistance and helpline telephone services, whether for legal advice, pet care, travel or household maintenance. In all these cases, the cost of providing the advice (normally by means of a dedicated telephone line) depends on the proportion of those entitled to use the advice line who actually do so. Advice lines can be offered in exactly the same way as insurance. A breakfast cereal, for example, may want to offer a benefit that is attractive to pet owners. Free pet health insurance or a free advice line on caring for your pet could both be provided on an insurance principle.

How it works

Specialist brokers have put together insurance products in a number of areas that (in volume) are far cheaper than the policies that consumers can buy from their brokers or insurance companies, thus offering consumers high perceived value.

For example, insurance for a £1,000 camcorder could cost the consumer £80 if bought from a broker. Its cost to a promoter is much less, and reflects five areas of cost saving that the promoter can offer the insurer:

1 Take out the selling costs of the broker and the administration and marketing costs of the insurance company, and the actual insurance cost is just £30.

2 Part of the cost of insurance reflects the fact that it is often only taken out by those with a higher-than-average risk. Offer an insurance to everyone, and the average cost reduces to reflect low- as well as high-risk customers.

3 You could also give the insurer the opportunity of a bounce-back offer – a second offer sent to those who respond to the first offer. The bounce-back offer will give the insurer the potential for new business.

4 Offer publicity for the insurance firm on your product or in your advertising and it may subsidise the offer from its own advertising budget.

5 Write the policy in such a way that claims are settled with a new camcorder and not cash, and you reduce the level of fraudulent claims.

All these measures can mean that, in bulk, an insurance worth £80 to the consumer can cost the promoter less than £10. It’s then a real possibility to offer ‘free insurance’ as an attractive and low-cost incentive. A bank (NatWest) has offered £1,000 free life insurance for a year. The insurer continues the offer the second year, perhaps doubling the cover as an incentive.

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