Sales Promotions: Exploiting Consumer Vulnerability?

In recent times, the Nigerian marketing landscape has been bombarded with an avalanche of sales promotions from almost every sector; financial, telecoms, automobiles… suddenly everyone seems to be in a desperate grab for the consumer’s already overstretched naira.

The prizes are sometimes so outrageous, it’s difficult to believe! Etisalat grand prize is one million dollars! MTN has at least 3 different promotions (above and below the line) running simultaneously; Glo has Text 4 Millions. Practically all the banks have been running unending promotions since the lull of the capital market in an effort to raise cash to shore up their depleting base. The promotions come in various packages, sizes, stages and targeted at parents, yuppies, traders…even children!

While the trend might be seen as an effective effort to keep the business mill turning in a global recession like this, the sudden bandwagon to entice the consumer to spend even more is very alarming. A guesstimate of the value of prizes on the sales promotion landscape to date must be in billions!

That does not include the additional billions spent on publicity, advertising, draw events, and all the attendant marketing support such extraordinary brand activity entails. In fairness to businesses, sales promotions are legal instruments to effect a desired change in market dynamics.

It has proven effective in achieving decisive shifts in market share, improving cash flow and exciting slow sales seasons. For the brand owners and service providers, sales promotions usually portend good news.

The benefits of sales promotions seem however stacked dangerously in favor of the service provider at the expense of the consumer. The troubling question though is, is the Nigerian Consumer aware? How protected is the consumer from the minefield of exploitation prevalent in the sales promotion option?

Are the laws regulating sales promotion in Nigeria comprehensive or even effective enough to reassure the consumer that his vulnerability is protected? Who is responsible to look out for the consumers in such highly tempting and intoxicating situations as sales promotions are proving to be?

First is the processes many of these promotions employ to determine participation. The most common is to encourage the consumer to make a purchasing decision to qualify for instance; text “win” to a short code like 222 or 5000 at N50, N100, and N200 or save N10,000 in your account within a certain period and you qualify to participate.

As simple as this is, it raises the question, what is the focus of the promotion? Is it a loyalty platform or a sales drive? Most brands claim it is a means of rewarding loyal consumers but how can you claim to be rewarding me for past business yet I have to spend something again to have a chance at the supposed ‘reward’?

The only promotion I have seen that has been faithful to the principle of rewarding loyal customers is the First Bank Big Splash Promo which I witnessed at one of the draws in Lagos. The process of selection was transparent and totally chance based because it was computerized and all the winners who emerged were called on the phone right there in the hall.

None of those winners was even aware of the promotion. They were just regular First Bank customers and were automatically included in the promo because their accounts had the minimum balance required. They were not made to fill a form or submit anything. They won because they were loyal to First Bank. That is a loyalty promotion.

Not so with the telecoms industry however. The exploitation of consumer vulnerability is massive here. By global consumer practice, consumers should not pay any extra to participate in a promotion where their options of winning are determined by chance. It is termed as illegal lottery.

A lottery is a promotion that consumers pay a token to participate in a chance draw. A sales promotion is when consumers make regular purchase decisions at regular prices and their decision within the period qualifies them to participate in a chance draw.

The only promotions that can charge more than regular purchase decisions are the ones that require some skill from the consumer e.g. answer 5 questions to qualify for the draw where the draw is also determined by some skill display e.g. a shortlist of 20 people who will answer more questions to emerge winners (like Who wants to be a Millionaire).

Once skill is involved, it is no longer a lottery. However, a critical appraisal of most promotions running shows that the consumer is rarely required to show any skill, yet he is charged a premium to participate in such promotions. That is illegal lottery.

Another issue in this sales promotions jamboree is the psychological exploitation of consumer vulnerability. The harsh economic realities in Nigeria make every opportunity to get a “breakthrough” more attractive to the struggling masses. It is thus easier to entice them with promises of millions of naira, big cars, and foreign trips. Etisalat even promises one million dollars!

The concern for consumer protection experts is that given the prevailing poverty within the society, can Nigerian consumers really make rational decisions on participating in such promotions? There is a risk that the attraction of such mouth watering prizes can be so great, it could influence consumers to make biased judgments that could affect their financial habits which could eventually impoverish them further.

Most promos are cunningly designed to encourage consumers to send multiple entries and at the kind of premiums they charge, a consumer could get hooked sending multiple participation that other necessary expenses of his daily life may suffer. I was informed that a winner of one these promos claimed to have spent up to N2.5m in entries to emerge winner!

Another participant claimed to have spent over N1m and still lost! All in a bid to win N10m in a purported ‘treasure hunt’. Those consumers could have put that money to more productive use if they saved same with the vigor they participated in these promotions.

In cases of psychological and economic vulnerability as we obviously have in Nigeria, government through agencies like the Consumer Protection Council has the responsibility of intervening when service providers run promotions that could inadvertently take advantage of consumers who could be vulnerable or unfairly influenced by the attractions of the prizes.

Once we get past the resolution of lotteries versus promotions, other ways this can be achieved is if a regulation is passed to limit a consumer’s total participation in any promotion to a reasonable number of entries that would not inadvertently impoverish him.

Many of these promotions declare winners who never get the promised prizes. There are no means of proper monitoring as some promotions have so many levels of winners, it is practically impossible for regulatory agencies to verify that the “winners” exist and got the prizes.

Many of the brands also do not cooperate with the agencies in their efforts to monitor these promotions so the only protection the consumer has is the integrity of such brands and how faithful it chooses to be to that integrity. That is not good enough for the Nigerian consumer.

There is a great need to educate and enlighten consumers on the chances of being exploited when participating in any of these promotions. The brands also should have a special customer care line dedicated to educating consumers on the processes of their promos and taking their complaints. Advertising and publicity is not enough.

For the consumer, it is still our responsibility to find out details about these promotions before deciding to participate. An informed consumer will make rational decisions about his limits of participation and how trustworthy the brand’s activities have been before the promo.

Don’t be enticed simply by the star prizes alone. Always remember that no one gives anything without any conditions. Find out those conditions and determine if you can live with them before participating.

If you have been declared ‘winner’ and have not received your prize, get in touch with CPC and make a complaint. Better still, email or text me with your concerns. I would be glad to help you resolve it.

Let’s start taking back our rights as consumers. It is the only way to make the government and service providers accountable.