We know people are hurting for money in this sagging economy. So why not run a promotion giving them a chance to win some cash from you? How big of a prize are we talking about, and where would you get the money to pay off a winner? The handful of restaurants that offer these contests rely on outside providers to come up with an appropriate dollar figure while also assuming the risk of paying the prize. The format is a proven revenue producer for organizations that use it wisely, with sports-themed promotional contests being the norm. Why not give it a try in your restaurant, maybe even tying it to a food-related event like the Top Chef finale or the James Beard Awards?
But be sure you don’t go it alone if you do. There are several companies that specialize in providing promotional risk coverage for businesses. They cover everything from those hole-in-one-for-a-Mercedes charity shootouts at the local golf course to the $100,000-for-a-made-half-court-shot attempts you see at the halftime of NBA basketball games. Restaurants will not only need these companies’ insurance money in case they have to pay off a winner. They’ll also need their expertise on other key aspects: deciding how much prize money to offer to make the promotion attractive to potential customers and calibrating the actual odds of paying off a winner for a particular event or task.
Think you could handle this latter step on your own? Consider a recent promotion between the Chicago Blackhawks and the Illinois State Lottery. Their deal called for one Blackhawks hockey fan chosen randomly at each home game to be eligible to win a $1 million prize if the Blackhawks scored a goal at exactly the 10-minute mark of the game’s second period. The timekeeper had to stop the clock to read exactly 10:00, not 9:59 or 10:01.
Make a guess on the odds of that happening? One in a million?? A billion?
We’ll give you a clue. Someone took home the $1 million at the third game of the “Illinois Lottery Million Dollar Minute Promotion.” It turns out the odds of a hockey player scoring a goal at any second of any given game are about one in 1,000. Factor in the total number of home games for a season-long promotion like this one and the odds drop to one in 25. In contrast, there’s about a one in 50 chance that a contestant taking a half-court shot at a basketball game will hit it.
There are a couple of ways big-buck sports promotions have worked for restaurants. For the past six years, the Sonic restaurant chain has run a promotion in its Kansas City market in which one customer has a chance to win $25,000 if a Kansas City player hits a grand slam home run in a designated game. More than 7,000 fans visited area units to register beforehand. “By tying into the team with a big prize promotion, we generate a lot of excitement and have something that everyone can relate to,” says Sonic’s Christina Bell. “It’s a great way to drive business, but it is also a wonderful way to reward our loyal customers.”
The Jillian’s restaurant in Boston ran a football contest that offered one lucky patron a $5,000 prize if a kickoff was returned for a touchdown during a New England Patriots NFL game. The chain paid off twice during the season, but what a way to fill your restaurant on game days.
How much does it cost to hook up with a promotional company that can handle these contests for you? It depends on three factors: the prize amount, the triggering action that determines when a win occurs and how frequently the prize is up for grabs.
“Typically, the cost of the promotion comes in between two percent and twenty percent of the actual prize value featured,” says Todd Overton of SCA Promotions, a Dallas-based provider of promotional risk coverage for contests, games and events. It’s all a matter of knowing the odds. “If a bar or restaurant wants to do something with a baseball team and wants to offer a $10,000 winning prize for every game, that’s going to be expensive because there are a lot of baseball games. But if they offer just the big play prize on Tuesday nights—a typical slow night for bars and restaurants—it makes every Tuesday special, draws bigger crowds on that night and greatly reduces the fee.”
While these big prize promotions are effective at any time, we think they can be especially successful right now. And don’t limit yourself to sports-related contests; other themes, including those related to food, will work. We’re sure the companies that specialize in these promotions will be eager to work with you to develop something different.
Of course, if you want to do the heavy lifting of contest development yourself and self-insure the prize, we salute you. Just remember to make sure the odds of the action that triggers a win occurring are long. Not lottery long—chances of a player hitting all six numbers in traditional lotto drawing are one in 10,179,260 and one in 195,249,054 for Powerball. But long enough that you know the odds are on you side.