Is your promotional opportunity too good? Lessons from Build-A-Bear

6P Marketing looks at the Build-A-Bear promo fall-apart from the summer of 2018.

One of the most common marketing trends for B2C companies – particularly in retail and restaurants – is free or heavily discounted promotions.

In one seven-day stretch this summer, A&W, McDonald’s and 7-11 all gave away complementary samples of their signature products (root beer, French fries and Slurpees respectively).

Another company, Build-A-Bear, also hopped on the summer promo wagon during that time. Though they didn’t provide freebies, their offer was pretty much as close as you get to a gratis giveaway – pay your age. This meant that a stuffed animal from the make-your-own teddy bear retailer could be as little as one dollar.

The plan, in theory, sounded great, but the execution failed – officials at Build-A-Bear didn’t factor just how many people would line up. Reports of hours-long lineups at locations across Canada, the U.S. and the United Kingdom resulted in many unhappy customers who stood waiting with their anxious children to take advantage of the mega discount, and ultimately were turned away when the company decided to close the line midway through the day.

In the end, Build-A-Bear issued $15 gift cards for anyone who was turned away during the event. A total hasn’t been amassed of how many of the vouchers have been handed out, but it’s fair to say that there was more financial harm done than good, let alone any consumer sentiments that may have been hurt.

Build-A-Bear isn’t the first company to suffer from poor offer planning, and unfortunately won’t be the last.

There’s no question that there is great potential of harvesting new clientele with a blowout promo; but the price you’re paying upfront may not be worth the end gain. For SMEs, you very well could be facing an uphill battle to recoup your expense.

Ultimately, with retail and restaurant giants engaging in free days or major discounts, there is an inkling for smaller companies to engage in a similar activity; but you have to keep your company’s bottom line in mind. One company’s activity does not require you to do something similar in your promotions approach. In fact, there are a few lessons that can be learned:

1. Consider what you’re willing to lose, what is to be gained, and what the scenarios will be in either extreme. Though your end result will likely hit somewhere in the middle of these scenarios, it’s always best to be prepared for the best or the worst.

2. Ensure you have a redemption cap. Limiting the number of customers that can participate in your promotion may seem unfair, but ultimately you have to keep your bottom line in mind. This also, incidentally, has the potential to create greater demand.

3. Be aware of the promotion’s spread. With social media and dedicated sites like Red Flag Deals, it’s easy for your promo to get spread across broadly quickly. Adding clauses such as “local redemption only” will ensure you don’t get stuck fulfilling long distance orders (which could cost you in the end).

If you have never ventured into major discount promotions, it’s best to speak with an experienced marketing expert. This is where 6P Marketing is available for you. We have worked with companies on a variety of promotional opportunities.

Contact our offices at 204.474.1654 or email us through our contact form, and we will be happy to meet with you to discuss discount programs.

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