How Marketers Can Protect Themselves When “Crazy” Happens
By: Matt Kates / 03.20.18
When #16 seed University of Maryland-Baltimore County defeated #1 seed University of Virginia 74-to-54 this past Friday, Little Caesars generated a lot of excitement among pizza and basketball fans. It also served as a reminder to marketers that “crazy” can, and does, happen.
The Promotional Idea
For the 2018 NCAA tournament, Little Caesars launched the “If Crazy Happens” promotion, promising to give away free Hot-N-Ready lunch combos on April 2 if a #16 seed beat a #1 seed. Since the tournament expanded to 64 teams in 1985, #1 seeds have held a 135-0 record against #16 seeds, so the possibility that “crazy” could happen seemed almost impossible. But what seemed like a fun, attention-getting PR stunt turned into a very expensive payout.
Like many such promotions, Little Caesars’ idea was brilliant. Instead of a boring “Official Sponsor of the NCAA Tournament” marketing message, it created an exciting value proposition that was a perfect fit for the brand. By simply incorporating a few strategies to offset risk, Little Caesars could have successfully managed the chances of “crazy” happening:
In the 2014 NCAA tournament, Quicken Loans teamed up with Warren Buffet’s Berkshire Hathaway to offer a $1 billion prize to anyone who filled out a perfect 2014 tournament bracket. The promotion’s rules estimated the odds of picking a perfect bracket at 1 in 4,294,967,296 – much higher than the odds of winning the Powerball lottery’s grand prize (1 in 175,223,510). Despite those astronomical odds, Quicken Loans was smart to avoid the risk of an enormous payout by purchasing insurance for a fraction of the cost of their portion of the potential payout.
Capping the Size of the Payout
In 2016, upscale steakhouse Ruth’s Chris’ Ann Arbor location promised fans a percentage discount equal to the University of Michigan football team’s margin of victory over opponents. Shortly after the promotional offer was announced, Michigan crushed Rutgers 78-0 – which would mean a whopping 78% off your meal. Fortunately, the promotion rules capped the discount at 50% and excluded alcohol.
Capping the Number of Participants
Reese’s “Go For Two” real-time giveaway played off the brand’s famous dual peanut butter cup packaging by offering fans a chance to grab prizes every time a team scored a 2-point conversion throughout the 2017 college football season. Reese’s was able to add excitement and manage its payout risk by capping the number of fans who can claim a reward for each 2-point conversion. For example, if there was a successful 2-point conversion in one of the Sept. 30 games, the first 250 fans who responded received the $25 Amazon gift card prize.
Alternate Strategy: Qualify the ‘Crazy’
The Little Caesars promotion was a stroke of marketing genius, but implementing a few of these strategies would have reaped all the PR buzz at a much lower cost. Requiring consumers to register in advance, and capping the number of registrations would’ve not only generated the same level of excitement and goodwill, it would have also provided Little Caesars the guaranteed payout of building their CRM database of pizza loving, NCAA basketball fans.