- Food company has renewed one of the brands. For the promotion of the new brand the company posted coupons. Edition – 300.000 pcs. Customers were required to cut out and present the coupon, so to get the new product during the promotion for 1 eurocent instead of the usual price – 2 EUR. The company expected 10% of customers will use the offer, i.e., sales volumes will be 30.000 pcs. of the product priced 1 eurocent each. However, the promotion exceeded the expectations and the customers used 38% coupons or 84.000 pcs. more than the company expected. In monetary expression it made 167.160 EUR unplanned costs (loss of revenue). But the company had the over redemption insurance for the promotion. The contract provides that the Insurer had to compensate any lost revenue (1,99 EUR) per each product, exceeding 10% of the coupon limit. The premium the company paid was 19.701 EUR and the Insurer compensated all losses – 167.160 EUR!
- Sales uplifting
- Extra reward (prize, present) to customers
- Enticing customers to switch brand and/or supplier
- Exclusive promotions increase/create awareness
- Significant support to product launch/relaunch
- Unlimited number of rewards
- No worries about the marketing budget, financial loss or reputation of the company in case the promotion exceeds the expectations and forecasts. Losses in excess of the budget shall be compensated by insurance.