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Premium Rate Telephone Competition Services

Competitions in one form or another represent over 36% of all premium rate income and are the most dialled services in the country. Basically competitions fall into two major categories:

* Company promotions to create interest in a particular product or service.
* Competitions to generate cash via the premium rate service.

Promotions
Many more companies are using competitions as a promotion to attract people to their products or services. Holding a competition is an excellent way to attract attention to your company and its products. It's also a way to reward customer loyalty to your established client base.

Major companies such as Kellogg's, Proctor & Gamble, Clairol, Coca-Cola, Pepsi, M&M Mars, Taco Bell, Johnson & Johnson, Better Homes & Gardens, Visa, and Disney have used competitions successfully for decades to attract
new customers.

Competitions for cash
A large segment of the British public love competitions, trivia, crosswords, puzzles and pure chance. Most love to enter competitions which offer big prizes. There are dozens of magazines which cater for this demand, offering
page after page of puzzles and prizes. The vast majority of readers are women in the 25 to 55 age group.

In the UK there are a whole raft of competitions in the form of scratch cards, bingo, lotteries, football pools, etc. Plus of course the daddy of them all, the National Lottery.

Until now, competitions have been promoted through the traditional printed media, radio and television. But with the explosion of the Internet, many more companies now promote their competitions on line. Whether you decide to promote your competition on line, through the traditional media, or a combination of both, there are things you need to consider before you begin, particularly if you are using the premium rate service.

Planning Your Competition
As with any good marketing promotion, you need to plan the event carefully.

To have a successful promotion, you need to:

* Consider your goals
* Target your audience
* Decide on the type of competition
* Select the right media to promote your competition

Considering Your Goals
First, consider your reasons for having a competition. It may either be to promote your service, or to generate calls to a competition operating on a premium rate service.

Promoting a competition is an excellent way to achieve either goal. If you want to attract the public to your product or service, offering a FREE sample or a prize is an excellent way to generate interest. If your goal is to maximize call income to your premium rate service, then promoting a competition, offering attractive prizes, will certainly accomplish that.

Targeting Your Audience
You should match the offer of your promotion to the goals you are trying to achieve and the audience you are trying to attract. If you are trying to attract a general audience, then you can give away a general prize such as cash, a car, holidays, gift certificates, or generally popular prizes such as a TV, music centre, bikes, and so forth.

On the other hand, if you are trying to target a very specific niche market, you must select prizes which will only appeal to that target market. For example, if you are offering a premium rate information service for "Formula 1" fans, and wished to attract those enthusiasts, your prizes should be designed to be particularly appealing to them.

If you sell a product or offer a service?
Offer a sample of your product or a trial period of your service as a prize. The people who enter your competition will only enter if they are interested in your product or service. Although you will attract fewer callers, those who do respond will be more likely to purchase your product or service in the future.

Give serious thought to the prizes you offer.
Although you don't have to give away expensive prizes to get a good response, what you must do is tailor the prizes to your audience. There are hundreds of competitions giving away T-shirts, coffee mugs, and holiday vouchers - the public are not stupid and realise that you are simply trying to capture them for as small a cost as possible. If you adopt this approach your promotion will get lost in the vast number of other competitions giving away similar prizes.

Prizes for Premium Rate Competitions
If the purpose of the competition is to generate income from a stand alone premium rate 'Competition', then the selection of prizes is of utmost importance. Particularly if you are aiming for as wide an audience possible. This is where you need to understand who are the people who play competitions and are your potential callers.

If you are aiming at the entire population and intend to promote your competition in the national newspapers, magazines or on TV, then experience has established that the two most popular prizes are CARS AND CASH. These are closely followed by foreign holidays. WHY, because the vast majority of you callers are going to be women, and they want to win prizes which will appeal, not only to themselves, but to their husbands and family.

On the other hand, if you intend to promote your competition in magazines which are targetted at male readers, the prizes although similar should be more defined - a sports, rather than a family car; activity holidays, rather than beach holidays; computer equipment rather than household goods.

Decide on the Type of Competition
Having decided on the prizes to offer for your competition, you must now decide what form of competition you wish to promote.

There are wide variety of competitions which you can promote. The type you choose depends on how and where you intend to promote your competition. The different formats of competitions are enormous, with some very ingenious ones being devised to attract the public. Without question the most common and successful stand alone services are scratch cards. They work well because they are easy to play and the results are usually instant. This provides a huge impulse response from the public.

On the other hand, most of the printed media run regular competitions in their newspapers and magazines. Most also use premium rate numbers in conjunction with these competitions. Examples of major national papers who
regularly run these competitions are the Mail, Mail on Sunday, the Radio Times, The Sun and the Mirror.

STAYING WITHIN THE LAW
To stay within the law, Competitions must be promotions in which the participants are not required to make any purchase or payment to enter. If not, it becomes an illegal lottery or is classified as gambling which requires a license. This legal restriction is particularly important when you are using a premium rate service to run the competition. Because, by the very nature of such a service, the entrant is being charged to make the call to enter the competition, and entry is not FREE, as prescribed by the law.

Therefore, if you operate a competition on a premium rate number, to avoid breach, you must offer the participants an alternative cost free method of entering the competition, as well as entry via the phone. For example by allowing entrants to:

* post in their entry on a post card or entry form.
* enter via the internet by providing an e-mail address to which entrants can send their entries
* or you can have them complete and submit an on-line entry form.

This is a very grey area, but it appears to have been accepted by the regulators and the courts, that provided people have a means of entry to the competition which does not involve a payment, then should they decide, as a matter of convenience to use the premium rate service to make their entry, there is no breach of the law.

We must make it clear however, that this is how the system is currently working, whether the practise is in contradiction with the law is another matter. Before you act, take legal advice. In addition to the legal restraints, Phonepayplus has imposed a number of regulations, with which you must comply, if you promote the competition as a premium rate service.

PHONEPAYPLUS REGULATIONS FOR COMPETITIONS & GAMES WITH PRIZES
4.2.1 Services in this sector ('competition services') fall into five basic categories:

* lotteries,
* competitions,
* other games with prizes,
* an entry mechanism into a draw,
* information about prizes.

Most of these are subject to legal restrictions. Before setting up such services, service providers are strongly advised to seek advice on legal and excise duty implications.

Note - If you wish to run a Competition on the premium rate services, you should seek expert legal advice to ensure that the proposed service is lawful.

The main legislative controls that need to be taken into account are:

* The Gaming Act 1968
* The Lotteries & Amusements Act 1976

These are important, because, if your service falls within the Acts, a number of rules and restrictions apply which, if not complied with, will render your service unlawful.

For instance, if a competition amounts to gaming, then it is unlawful for any charge in money or money s worth to be made in respect of gaming (apart from any stakes hazarded). Given the charge on the premium rate service that would automatically amount to an unlawful activity.

In general, this is covered by the Lotteries & Amusements Act 1976. With certain exceptions, a lottery is unlawful, and running or promoting a lottery is a criminal offence.

Similarly, a 'Prize Competition' is unlawful unless the competition depends to a substantial degree on skill. It is important, therefore, to understand these distinctions if you are planning such a service.

To constitute a LOTTERY, there must be:
(a) a financial contribution from participants,
(b) a prize,
(c) and the game must depend purely upon chance.

Note - Clearly, anyone dialling a premium rate number is making a "contribution", because they are paying for the call. There will always be a prize for winners, so the relevant question is whether the game depends on "chance".

The proper test is whether any prize winning stage in the competition depends purely on chance. It is not enough, therefore, to have the first stage depend on skill, but for names to be pulled out of a hat in the second stage.

To put it another way, there must be a direct link between success and the exercise of skill. If one can establish that there is some skill involved in this way, then the game will not be regarded as a lottery.

Unlawful prize competitions
Even if there is a link between success and skill - so that the game is not a lottery, the next question is whether there is sufficient skill involved to avoid the game being judged an unlawful prize competition. If the game is too obvious, or too easy to win, there may be real problems with this.

One point to note, however, is that "skill" will, in most cases, cover the exercise of general knowledge, as in quiz competitions, and is not limited to physical skill.

For those who ask - "What about newspaper bingo and garage sales promotions?" - there is a tricky point to note. Newspapers and garage companies can run games of pure chance because the players need not make
any contribution to enter the contest. Winning Bingo numbers in newspapers can be checked out, free of charge, from the copy in the local library; and, in theory anyone can pick up a card from the garage forecourt. Therefore, these games are not unlawful lotteries, since there need ne NO CONTRIBUTION.

Unfortunately, with premium rate because the participants will always pay for the call, this method is not open to premium rate service providers.

Phonepayplus Guidance
1. If Phonepayplus is given clear expert legal advice that a service appears to be plainly illegal and, considers that a service has or is causing serious consumer harm it will put a breach of the Code to the service provider.
If, following the response, Phonepayplus receives further advice to the effect that there remains no doubt that the service is illegal, it will proceed to adjudicate in accordance with the Code.
2. If Phonepayplus considers a breach to be serious but receives expert legal advice which indicates that there is uncertainty whether the service is in breach of the law or not, Phonepayplus will not proceed under its Code.
3. Phonepayplus will, in any event, refer such cases to the police.
4. The following is a list of factors which will be taken into account when the Committee is assessing the consumer harm caused or potentially caused by a particular competition service:
* whether the service promotion is likely to reach a wide audience,
* if breaches of the Code are likely to enhance the revenue earned,
* the number of alleged Code breaches, the breaches were particularly harmful to consumers,
* the number of public complaints (in relation to the size and impact of the promotion) and any other relevant factors in the particular case.

Many service providers obtain legal advice before providing these services and try hard to avoid running illegal services. To help service providers the following would be expected to apply in the absence of fraud or other substantial abuse.

Phonepayplus will not take action (even if the service might otherwise appear to be a lottery or an unlawful prize competition) if:
1 calls to the service cost the same as or less than a first class stamp; or,
2 there is a prominent alternative entry process (not one which appears only in small print among 'rules of entry').
4.2.2 Promotional material for competition services which can cost more than £1.00 must clearly display:
(a) the cost per minute and likely playing time, or the full cost of the call,
(b) details of how the competition operates and an indication of any tie-breakers.

Note - Entry Instructions: in addition to indicating any conditions governing participation, extra matters which should be dealt with include the following:
* Notification of winners and results.
* The criteria for judging entries.
* How participants may obtain any supplementary rules which may apply.
* Whether a cash alternative to any prize is available.

Note - Availability of Results: participants should be informed before entry how and when the names of prize winners will be made known.

4.2.3 Competition services which may cost more than £5.00 must, as soon as is reasonably possible after the caller has spent £2.50, and after each £2.50 of call spend thereafter, require an active confirmation that the caller wishes to continue with the call. The method used to obtain this confirmation must have been granted permission by Phonepayplus. Failure to provide the correct responses must, after the provision of any necessary prize claim information, cause the service to be terminated immediately by forced release.
4.2.4 Competition services which are aimed at or would reasonably be expected to be particularly attractive to persons under 16 years of age must not: a offer cash, or anything which can be readily exchanged for cash, as a prize, b feature long or complex rules.
4.2.5 Promotional material must clearly state any information which is likely to affect a decision to participate, in particular:
a any closing date,
b any significant terms and conditions, including any restriction on the number
of entries or prizes which may be won,
c an adequate description of prizes, including the number of major prizes,
d any significant age, geographical or other eligibility restrictions.
4.2.6 The following additional information must also be made readily available to potential competitors. If not contained in the original promotional material, it must be available free to anyone sending a stamped, self-addressed envelope:
a how and when prize winners will be informed
b how prize-winner information may be obtained,
c any criteria for judging entries,
d any alternative prize that is available,
e the details of any intended post-event publicity,
f any supplementary rules which may apply.
4.2.7 Competition services must have a closing date, except where there are instant prize winners. An insufficient number of entries or entries of inadequate quality are not acceptable reasons for changing the closing date of a competition or withholding prizes.
4.2.8 Competition services and promotional material must not:
a use words such as 'win' or 'prize' to describe items offered to all participants,
b exaggerate the chance of winning a prize,
c suggest that winning a prize is a certainty,
d suggest that consumers must dial a premium rate number in order to participate if an alternative postal entry route is available.
4.2.9 Service providers must ensure that:
a prizes are awarded within 28 days, unless a longer period is clearly stated in the promotional material,
b postal entries have the same chances of winning as telephone entries,
c if there is any subjective assessment in the selection of the winning entries (for example, tie-breakers) in a competition open to the general public, then judging is by a person independent of the service provider and any
intermediaries involved, or by a judging panel including at least one independent member.

Advertising of Prize Promotions
The closing date of any prize promotion should be clearly stated in each advertisement, on each entry form and on the outer surface of any relevant pack, wrapper, or label.

Competition or Contest
Contests are those promotions in which the sponsor requires the entrant to submit more than just their name and address, such as a slogan, recipe, photo, jingle, answers to questions, or other creative information.

Then there are the other types of promotions such as instant-win games on specially marked packages of a sponsors products, scratch cards, trivia, etc. where the only requirement is the entrants name and address and some personal details. All the names are then placed in a prize draw, the winners being selected at random.

No matter which type of competition you choose to operate, if you are using premium rate number, there are Phonepayplus rules and legal restraints with which you must comply. To operate any competition or contest you must provide the following information to all participants:

1] Information about the company holding the competition.
Who are you? This should be stated in all adverts and promotional literature.

2] A full description of the prizes that you are offering.
You must state the exact number and types of prizes being offered. Make sure that the entrants know exactly what is included in the prizes offered.
* If you are giving away a cruise as a prize, are the airfare and ground transport included?
* If you are giving away a car, what are the specifications, is insurance and road tax included?

3] A contact address if entrants have any questions about your competition.

4] An official set of rules.
The official rules must state how the competition is to be operated. Every competition MUST have a set of published rules. The rules should state exactly how the competition is structured and any restrictions or
limitations which may apply to the promotion.

For example:
* who is allowed to participate
* how many times people are permitted to enter the competition
* the duration of the competition
* the closing date of the competition

Many first time operators fail to specify how many times a person can enter, and only realise after receiving hundreds of entries from the same people, that they should have specified that entries are limited to one per person, per household, etc.

The official rules for the competition should include the following information:
* The name of your competition.
* A description of the prizes, their number and value. If you are giving away one grand prize, 5 first prizes, and 25 second prizes, you must include an exact description plus the retail value.
* Entry requirements.In which form you are accepting entries. Are you accepting by telephone, by email, by post, in which case the address to which to send entries.
* Information you require from the participants - name, address, postcode, phone, e-mail, any qualifiers, recipes, essays, questionnaire items, and so forth.
* Residency eligibility - open to which countries
* Any age restrictions. For premium rate all entrants must be 18 years or over.
* Restrictions on the number of times a person can enter. Make sure this information is visible. Whether you are going to allow multiple entries per person or just a singe entry per person, make sure people know that before they enter.
* Entry deadlines.
* Drawing date or frequency if you have multiple deadlines. If you are holding a monthly draw, what are your entry cut-off dates and the draw dates?
* Any other information that is relevant to entering.
* An address to which people can send a self-addressed stamped envelope for the winners' list and a copy of the Competition Rules.
* Contact information if people should have any questions.

EXAMPLE OF COMPETITION RULES
The following rules relate to Scratch Card competitions which were promoted as inserts in the national press.

RULES
ACME Telephone Services Ltd. [hereinafter referred to as ACME] accepts entry into competitions the company promotes on the following terms and conditions and the submission of an entry into any ACME competition means acceptance of the full rules and conditions. Any 'How to enter instructions' for any particular competition shall form part of the ACME competition rules.

ELIGIBLE ENTRANTS
ACME competitions are only open to U.K. residents over 18 years. The competitions are not open to employees of ACME or their families, ACME'sprinters or distributors.

VALID ENTRY FORM/CARDS.
Entries to ACME competitions must be on the Entry form/card specified and supplied by ACME, no photocopies will be accepted. No purchase is necessary, a free entry form/card or personal claim number can be obtained by sending an S.A.E. to Dept. F/C ACME Ltd P0 Box 112 London W1 1AA [only one per household]. Applicants should allow 28 days for delivery. Entries must be received by ACME no later than 12 noon on the closing date
stated on the entry form/card. Entries must be posted to ACME to the address given on the entry form/card.
Only one original entry form/card can be accepted per envelope and from any one household.
Entry forms/cards containing a printing error of any kind, altered, reconstructed, forged or tampered with in any way will be declared void. Entries lost, delayed, mislaid, wrongly delivered, illegible or insufficiently stamped, will be declared void.

A certificate of postage is not accepted as proof of delivery.

Any entry without a valid personal claim number will be declared void.

Any queries regarding competition entries must be received within 28 days of the stated closing date. The ACME competition manager's decision is final. No correspondence will be entered into.

PRIZES
The number of prizes are as stated on the entry form/card or competition literature. Failure to claim by the time or in the manner specified for any prize will make the claim invalid. Where applicable the prizes will be awarded to the
senders of the 'winning entries' drawn at random after the closing date.

A 'winning entry' is one which has a winning number and/or correct answer to the competition for which that entry has been drawn together with a valid personal claim number.

In the event that there are more valid claims than there are prizes in any category the value of the prize(s) will be shared between the valid claimants.

Small Prizes.
Prizes under the value of £20. A 20p stamp and self addressed envelope is required to claim all small prizes failure to provide these will make the entry void. Small prizes may vary from those stated. There is no pre-determined limit to the number of small prizes available to be claimed on submission of a valid entry form/card.

Major Prizes.
Prizes with a value greater than £20. All claims for major prizes must be sent by recorded delivery. Major prize claims not sent by recorded delivery cannot be verified and are void. Major prize claims are verified at the end of the competition and winners will be informed in writing within 28 days of the closing date. ACME reserves the right to give a cash alternative to major prize winners.

Product Prizes.
In competitions where the product which has been specified as a prize is not available ACME Ltd. will substitute the nearest equivalent model of similar value.

Vehicle Prizes.
Motor car/cycle winners are responsible for payment of the vehicle road tax & insurance. Vehicles are supplied to base specification. Prize vehicles are ordered on competition closing date and delivery is subject to supplier's delivery time.

Holiday Vouchers
Given as prizes are only redeemable against the purchase of an inclusive holiday or flight which must be booked through the ACME appointed travel agent specified on the holiday voucher. Only one voucher may be used per booking.

Any number of persons travelling together may book on one form and this will constitute one booking. Vouchers cannot be used in conjunction with any other offer. The value of the holiday voucher will be deducted from your final invoice. Holiday Vouchers cannot be exchanged for cash.

Inclusive Holiday Prizes.
In all competitions offering an 'inclusive holiday' as a prize ACME reserves the right to substitute an alternative hotel and/or airline of an equivalent standard in the event of unavailability. All holiday or travel bookings made will be subject to the agent/operators normal terms and conditions and ACME shall not be responsible for the acts or defaults of the travel agent, tour operator, airline, ground handling, accommodation provider, or the accuracy of the holiday brochure.

There is no cash alternative to holiday prizes, and no alternative holiday destination can be offered. Holidays are not transferable and must be taken by the registered winner.

Holidays and travel must be taken within the specified period(s). winners are responsible for all UK travel costs and arrangements, vaccinations and travel insurance. They will also be responsible for all other expenses additional to those described in the competition literature.

Two for the Price of One Vouchers.
A Voucher entities one free entry item when accompanied by one full payment for the same entry item. The Voucher must be presented at time of payment. Vouchers may not be used in conjunction with any other offer or discount. Only one voucher allowed per purchase. Vouchers are not transferable. Vouchers have no cash value.

A call to the ACME competition 'claims/information line' does not guarantee a prize of a greater value than the cost incurred in the call. A list of winners is available 30 days after the close of the competition. For a full list of rules write enclosing an S.A.E. ACME reserves the right to terminate all or any part of any competition or promotion at any time and without notice winners agree that their names may be published.

SELECTING THE METHOD OF ENTRY
There are typically three ways you can have people enter a competition:
* by submitting an on line entry form.
* by telephone
* by post

Collecting Customer Data
If the purpose of the competition is to collect data from your entries, you must design an entry form and have the information ported into a database such as Microsoft Access.

If you decide to have entrants post you a completed entry form, you will have to enter all of the information manually into a database if you intend to use the information at a later date.

Spend time planning the format of your entry form to ensure that it achieves your objectives. In deciding what questions to ask you need to decide the ultimate use of the information.

It's perfectly acceptable to ask questions about consumer preferences on your entry form, such as brand name awareness or shopping habits. But if you ask for information that is very personal, such as income level, it could dramatically cut your level of response. People are very wary about giving out that sort of information.

Don't assume that because people enter your competition that it's acceptable to contact them with other product information. Provide a tick box on your entry form so people can choose whether they want you to contact them with offers, notices, or special discounts in the future.

Sending them unsolicited mail just because they entered your competition is akin to sending junk mail or spam. Your next promotion is likely be a lot less successful, because people will assume that you are just collecting names to send them unwanted mail at a later date.

If you do mail them in the future, let them know where you got their names. Most people are unlikely to remember every competition they have entered in the past few months.

If the purpose of the promotion is to get people to visit your Web site. It's perfectly acceptable to place your entry form at the bottom of a page so that you can provide some information about your product or service.

You can also ask a question on the entry form that pertains to your product or service if you want. Make sure the answer is easily found either on your other Web pages or telephone service.

There are a lot of different ways you can set up an on line competition entry form, so think about the information you want to receive from your entrants.

PROMOTING COMPETITIONS ON THE INTERNET
The internet has become a great centre for competitions, there are literally hundreds of sites which either promote or provide links to such competitions. Most competitions are offered as a free entry via email, the only requirement
being personal details of the entrant.

As a Premium Rate I.P. you can profit from such internet competitions in two ways.
* As a stand alone competition using your premium rate numbers to generate an income.
* As a promotion to attract visitors to your web site with a view to selling them your product or service which they can purchase on a pay-per-product basis via you PREMIUM RATE NUMBER. Read the section of this Manual detailing the various ways you can use your premium rate service as a quick and convenient billing system on the internet

MAKING THE MOST OF COMPETITIONS
Convince your visitors that your competition is genuine. Entering competitions has always been a popular pastime. Millions of people are are constantly seeking and entering competitions both on and off the net. Large corporations have long known the value of competitions to promote their products and services.

However, the way you promote your competition will show people whether or not your competition is legitimate. Legitimacy is the key. People are tired of e-mail scams, Web sites that are nothing but ads, and get-rich-quick schemes.

Many sites hold a competitions for the sole purpose of gathering names. For example, one site chose to give away a custom designed T-shirt every month as the grand prize. It also listed 100 second prizes per month consisting of a coupon worth $5 off of any purchase at their site.

If you want to offer all of the people who visit your Web site £5 off of every purchase, then just do it. Create a nice graphic, or coupon, or order form with the discount posted right on it. Don't hide it or disguise it as a competition.
The last thing your business can afford is to create bad will!

Promoting Your Competition
Web marketing companies claim that a competition will drive loads of traffic to your site, and you'll be able to collect huge lists of customers that you can contact after the promotion is over. You announce a competition just like you would announce any new Web site.

Announce it in news groups and on line forum websites, and submit your competition webpage to the major search engines and directories. There are currently over 50 well-known sites (both commercial and non commercial) that list on line competitions.

Press releases are also a great avenue for announcements. Competition promotions make great press releases. Go to InfoSeek (www.infoseek.com) and enter the word sweepstakes. Choose the News option (not the Web) and see what other companies are using for press release material. You can structure yours in the same manner.

Remember your target market?
If you are offering fishing lures as a prize, go to the fishing or outdoors Web sites and discuss your prize on message boards or chat forums. Announcing a new sweepstakes will create an initial surge of traffic, and
depending on the prizes that you offer and the frequency of the drawings, you could enjoy this traffic for several months.

If you decide to sponsor more sweepstakes promotions after your first one is done, remember that different prizes will attract more attention. If you offer the same prize again, people may think they have already entered it and will not visit your site again.

Summary
Don't let visions of running up your hit counter get in the way of promoting your competition in a respectable manner. Sponsoring a competition can be a very viable way of getting your Web site the attention that it deserves, but it takes good planning and careful consideration, just like any other marketing or advertising promotion.

Your business can attract a lot of attention by sponsoring a sweepstakes, and the way you handle the promotion is going to make an impact. Remember, first impressions are very important!

Competitions are the most effective ways to promote name recognition and to reward your loyal customers. These types of on line promotions are also one of the most effective ways to attract visitors and increase traffic to your Web site.

SCRATCH CARDS
The service that succeeds in good times and bad!

In terms of premium rate competitions scratch cards are the most successful. It is the one premium rate service which has proved profitable through good times and bad. During economic down turns when people have been reluctant to pay premium rate charges for information or entertainment, they continued to participate in the scratch card competitions. No doubt when times are tough, people hope they will get lucky and hit the jackpot. For whatever the reason, the competitions have proved the most resilient of the premium rate services.

In the early days of premium rate services, before the regulators had imposed their many restrictions, scratch cards regularly achieved response rates of up to 30%. This response would generate a return of 5 to 10 times the cost of your promotion. Revenue streams of close to a million pounds a month were consistently achieved, and this at a time when the maximum call charge was only 25p. a minute.

But new regulations and many more players have cut the response rate down to between 1% and 4%. Operators still continue to generate hundreds of thousands a month, but only by using a higher call charges and distributing many more cards.

Today, unless you understand the secrets of successfully promoting scratch cards competitions, you can easily burn your fingers. What you are about to learn about these competitions can make, and will certainly save you, a fortune. Whilst the profit margins are now a lot lower, if you follow the formula, you can still make thousands every month.

THE WINNING FORMULA
If you wish to promote profitable scratch card competitions you must understand and get the following factors right.

* THE PRICE
We must consider your charging structure and potential income first, since this in turn governs all the other factors in the scratch card formula. What you can charge per call is largely dictated by the Phonepayplus regulations. Under present regulations Phonepayplus restricts competitions to a maximum call charge of £1.50 per minute. Furthermore, if the call exceeds £5.00, you must place a verbal warning in your script when the call charge reaches that figure - with the result that many callers disconnect. Finally, Phonepayplus insist that in all promotional material you state either the FULL COST of the call, or state the cost per minute PLUS the maximum call duration. In both instances it is designed to make the total cost clear to the caller.

Although call charges do affect the number of calls you receive, over a charge £1.00 per entry, the demand is reasonably inflexible up to £5.00 maximum charge. Thereafter, with verbal warnings, the decline is quite dramatic. Experience suggests that you will maximise you income by using the £1.00 per minute call charge, with a 4/5 minute maximum call duration. This will give you an income of approximately £3.00 per caller - depending on
deductions made by the telecom and service bureau.

On the basis that your response follows the market averages of between 1% and 4%, you can reckon to generate between £30 and £120 per thousand cards distributed. You must now create, print and promote your scratch card
competition within those income figures.

Your income per 100,000 distributed should be a minimum of £3,000 and a maximum of £12,000. You must therefore cover your costs within those figures. To be on the safe side, you must try to keep yours costs within the
£3,000 per 100,000 costing.

* THE PRIZES
Cars, cash and holidays are the prizes with the greatest appeal. However, when offering these prizes there is a credibility factor. If you decide to offer a Rolls Royce, One Million Pounds in cash or a six month Round the World
Cruise, - as you are unknown to the public, they may well consider the contest is a scam, with the result that you receive few calls. Where the bulk of your players are women, convertible cars are particularly popular, for example
the MG Sports, VW Golf Convertible.

Cars and cash are the most popular, closely followed by international holidays. Any holiday prize should be designed for either a couple, or a family of four. Disney Land ' either in Paris or Florida are particularly popular with mums. Unfortunately, holiday prizes have become rather tarnished, because many unscrupulous scratch card promoters have used valueless travel vouchers as prizes. If you offer holiday prizes make it crystal clear that the prize is NOT a holiday voucher.

Bear in mind, that although people under the age of 18 years cannot participate, in reality many of the cards attract the attention of children, who will scratch them if the prizes are right. The favourites with this group are multi-media computers, games consoles, TVs, video recorders and mountain bikes.

In addition you must offer small value prizes which the vast majority of the entrants receive. Small prizes which have proved popular include: fashion jewellery, pen & pencil sets, diaries, posters, phone cards, sun glasses, blank videos, etc. All these items can be purchased in bulk for less than £1.00 per unit. More importantly, the cost of packaging and postage is also low.

The cost of your prizes. Clearly you must have the funds to provide the prizes on offer. If you are offering cars and cash, plus all the lesser prizes, you must reckon on a potential total in excess of £20,000 - depending on the number of big prize winners you have. For this reason scratch card competitions are normally run for a minimum of six months, allowing time to distribute several million cards, and thereby generate sufficient income to cover the cost of the major prizes won.

Bear in mind, that although you may be offering high value prizes, under the terms of your competition, you are only required to print ONE WINNING CARD for each of the major prizes. On the basis that you print and distribute one million cards a month, for six months, your odds against a winner are 6,000,000 to 1 for each prize. If you have 12 major prizes, the odds are still over 500,000 to 1 against a major prize being claimed.

If you intend to be a major player, you can arrange to ensure against the major prizes being won. For an annual fee, determined by the total value of prizes offered and the number of cards printed, you can protect yourself
against the cost of big prize winners.

Small prizes are however a cost which you must take into account. The scratch card formula works as a premium rate service because in designing the competition you must ensure that a maximum possible number of the
people who scratch the card are winners.

To discover which prize they have won, the player can do so either by telephoning a premium rate number, or if they do not wish to pay the telephone charge, they can send an SAE to receive the same information by
post.

Naturally, most people, presented with a winning card, wish to find out immediately whether they have won one of the big prizes, rather than wait up to 10 days to receive a reply by post. Therefore the vast majority dial the
premium rate number. On average 80% of the winning scratch card players will telephone, 20% will write in.

Because there can only be a dozen or so big prize winners, the balance will be small prize winners, to whom you must send a prize. So for every 100,000 cards distributed, if you have a 4% response rate, you will have to provide 4,000 prizes. Which would be a major cost. Fortunately the percentage of people who actually write in to clam the small prizes is only about 15% to 20% of the actual winners.

The reason for this is that for the players to claim their prize, they are required to send in their winning scratch card, with Claim Number, for verification. In addition they must send an SAE in which their prize will be returned. As a result, many players, having discovered that they have only won a small prize, cannot be bothered to send in their claim.

As stated above, only about 15% will actually claim their prize. In reality therefore, you can reckon on having to send prizes to less than 500 people per 100,000 cards distributed, with a 4% response. So for every hundred thousand cards distributed you should allow £300 to cover the cost of small prizes. If the response is only 1%, then claims should total no more than £150, with a proportionate reduction in costs.

* THE FORMAT OF THE COMPETITION
Each scratch card competition contains five basic elements.

* The message or headline
* The game
* The response mechanism
* The competition rules
* The recorded message

The message or headline.
This must be an attention grabber, you only have a split second to grab the reader's attention as the card falls from the newspaper or magazine. The headline needs to be big and bold and clearly state what the scratch card is offering in terms of prizes. The headline - must make it instantly clear that this is a scratch card promotion with big prizes and instant wins.

You are relying on the 'impulse factor' to generate response. If your headline grabs the readers attention and they are attracted by the prize, chances are they will stop long enough to quickly scratch the card. Then if they are 'a winner' they will study the card more closely, follow the rules and hopefully make that phone call.

Here are a few examples of successful headlines:
WIN CASH & PRIZES - INSTANTLY!
WIN A SAAB IN 90 SECONDS!
WIN INSTANT CASH!
JOIN THE EXCITEMENT. YOU CAN BE A WINNER TOO!
YOU COULD BE AN INSTANT MILLIONAIRE.
£3 MILLION POUNDS IN PRIZES
BE AN INSTANT CASH WINNER!
SCRATCH & WIN!
WIN TEN YEARS OF MEDITTERENEAN SUNSHINE!
TOP PRIZE - WINNERS CHOOSES EITHER
A MERCEDES M-CLASS OR A JAGUAR S-TYPE
THREE CHANCES TO SCRATCH & WIN
£20,000 IN INSTANT CASH PRIZES!
3 PRIZE BONANZA - CARS - CASH - HOLIDAYS!
SCRATCH & MATCH TO WIN FANTASTIC PRIZES
MORE FUN MORE PRIZES MORE WINNERS!
WIN THIS CAR! WIN A TRIP TO NEW YORK ON CONCORDE!
OVER £35,000 IN CASH & PRIZES!
WIN A PEUGEOT 205 OR £8,000 IN CASH. YOUR CHOICE!

THE GAME.
Although there are a wide variety of games which you can use on your cards, experience has proved time and again, that the simpler to game, the higher the response. Although it may appear more exciting and interesting to ask players to correctly answer a number of questions, in order to win the prize, this will cut your response level dramatically.

The advent of the National Lottery scratch cards have made them far more acceptable to the general public. But the general public also expect to simply scratch the card to discover whether they have a winning card.

Because many people react to the card on impulse, if playing the game is too complex and requires a study of the rules, these people will put the card aside until later - a most will forget all about the card.

Legally the card, to avoid being an illegal lottery, should use a game which requires skill. This was achieved in the past by asking the player to select the correct answer to a choice of questions. Here is an example of such a card:

EXAMPLE MULTIPLE CHOICE CARDS
However, in recent years the major scratch card promoters have abandoned this requirement and are now producing cards without any skill element. As there has been no adverse reaction by either the law or Phonepayplus, one must assume that the authorities are taking a fairly relaxed view of the regulations.

EXAMPLES OF INSTANT WIN CARDS
You must also consider the number of games, and therefore different prizes, which you offer on a scratch card. Once again simplicity is king. Although it is possible to create cards with a whole host of games and prizes, on the basis that a wider choice will attract more players, this seldom increases response levels.

You should restrict yourself to no more than three games, which are easily understood, and which clearly state the prizes. Irrespective of the number of games you offer, in terms of priority the prizes should be a car or cash. Finally, you must design the game to allow for both major and minor prize winners. Remember that you will only generate income from those players which reveal a winning combination. Because only those people will call to
discover what prize they have won.

THE RESPONSE MECHANISM.
Having persuaded the reader to scratch the card, you must now persuade the winning players to respond. And preferably, to respond via the premium rate number. This is achieved by BOLDLY PROMOTING the premium rate number as a fast and convenient means to immediate information about the prizes they have won.

The need to call the premium rate number can be re-enforced by stipulating that all prize winners must have a CLAIM NUMBER in order to register their claim for a prize. Once again, this is conveniently available by calling the
premium rate number. When the winner calls the number a recorded message provides them with details of the prize won, plus a 'valid claim number'.

Finally, to claim their prizes, the winners must complete the section on the scratch card by entering their personal details, plus the prize claim and a valid claim number.

However, to keep the competition legal, you must provide an alternative means for the winners to obtain the prize information and valid claim number.

This is achieved by offering to provide the details on receipt of an SAE. These instructions are normally contained in the Competition Rules.

COMPETITION RULES
It is both a legal and an Phonepayplus requirement to publish the competition rules. To reproduce the full rules on the scratch card is difficult. However, to protect yourself from unfair claims it is essential to include the most important rules on the card. In particular, you need to provide instructions on the different entry methods. In addition to providing the short list of rules, printed on the scratch card, you must also give details of how readers can obtain a full set of rules, plus a list of competition winners. This is normally achieved by offering to provide a copy on receipt of a SAE

RULES PRINTED ON SCRATCH CARD
Summary of Rules. For entry to the competition no purchase is necessary. Open to UK residents only. If you require an entry card write, sending an SAE to [your address]. Allow 28 days for delivery. Cards altered or tampered with in any way will be declared void. You must be over 18 to play. Only one entry per household. All entries must be received at our offices before 12 noon on the closing date. For a full list of Competition Rules send an SAE to {your address].

This is an independent competition/promotion and is not connected with the newspaper or magazine in anyway. Any queries should be addressed to the Customer Services Manager at [your address]. A list of winners can be inspected at our offices Mon. to Fri. 10am to 5pm. A personal Claim Number is required with each card submitted. If you require a personal Claim Number send an SAE to [your address]. Any entry without a valid Claim Number will be void.

Any queries regarding this competition must be received within 28 days of the closing date. A Certificate of postage is not accepted as proof of deilvery. Entries lost, delayed, illigible, or insuffiently stamped will be declared void. No correspondence will be entered into. The competition manager's decision is final. A first class stamp is required with each claim, entries without the required stamp will be void. Small prizes may vary from those stated. There is no pre-determined limit to the number of small prizes which may be claimed on presentation of a valid winning card. Number of prizes as stated on card. A cash alternative may be offered to major prize winners. ALL CLAIMS FOR MAJOR PRIZES MUST BE SENT BY RECORDED DELIVERY. Major prize claims not sent by recorded delivery cannot be verified. Major prize claims are verified in writing at the close of the competition. If multiple claims are received the value of the prize will be shared. A call to the Information Line does not guarantee a prize of a value greater than the cost of the call. A full list of winners is available 28 days after close of competition. [ you ] reserve the right to terminate the competition at any time without notice. Employees of [your firm] their family and friends are not eligible for entry. Printers or technical errors shall make card void. Entry into the competition means acceptance of the full rules and conditions.

THE RECORDED MESSAGE
The purpose of the recorded message is two fold.
* To provide information to the winners who call.
* To provide your income.

As discussed under pricing, although you can have any length of message, Phonepayplus regulations effectively limit you to a 4 to 5 minute duration. Therefore, in designing the content, you must ensure that you keep the caller on line for that length of time, without simply offering spurious information, which will annoy the caller and could result in penalties from Phonepayplus.

In fact, if you limit your message duration to 4/5 minutes, you will only just have sufficient time to provide the information to the callers. The caller is seeking the following information:
* which prize he has won
* a valid claim number

The manner and order in which you present the information is all important. To maximise call revenue, you must try to keep the caller on line until the end of the call. This is achieved by only revealing the Claim Number at the very
end of the message.

If you are promoting a scratch card with several games and prizes, you should ensure that details of the small prizes, which the vast majority win, are detailed at the end of your message. If you detail them at the beginning of
your message, chances are the caller will not be interested in claiming the prize and terminate the call after only one or two minutes.

As with all messages, you should take the opportunity to persuade your callers to dial your other services, particularly if you are promoting other competitions.

EXAMPLE COMPETITION SCRIPT
Hello there and thanks for calling the GREAT SCRATCH CARD claims hotline.

If you are dialing this number you are already one of our happy winners. And here's even better news, when you send in your winning scratch card to claim your prize, you will automatically be entered into our ONE THOUSAND POUND CASH PRIZE DRAW, so be sure to write down your claim number and send in your card.

To discover which prize you have won and how to claim listen carefully to the following instructions. And please have a pen and your scratch card ready, to write down your personal claim number and the prize which you have won. Your claim number will be given at the end of this message.

This competition closes on 31 September 2012. OK, lets find out which prize you have won.

So first off is Game No. 3. Your chance to win the Peugeot 406. To win this car your scratch card must have revealed two matching number plates. And if those two matching number plates also match the number plate we are about to reveal, you are the winner of this fabulous car. The winning number plate is: N206GHM that. is N206GHM.

Now for GAME No. 2 - the holiday bonanza.
If you have revealed three matching symbols, you are a winner.
If you revealed three matching Mickey Mouse symbols - you have won the big prize.
You can start packing for a fantastic family holiday at Disneyland Florida.
If you revealed three matching AEROPLANES - you have won two return flights to San Francisco.
If you revealed three matching ESPANA symbols, you have won a self catering holiday on the Costa Del Sol.
If you revealed three matching STARS- you have won a fully inclusive one week holiday for two to Tenerife.
If you revealed three matching POUND symbols - you have won ONE THOUSAND POUNDS in travellers cheques, to spend on whatever you like.
If you revealed three matching CIRCLES- you have won a £10 holiday voucher, which can be used to pay for any holiday you care to book with our sponsoring travel company.
If you're a winner hang on for your personal claim number, and don't forget, when you send in your card you are automatically placed in our one thousand pound cash draw

Finally, Game One, twenty thousand pounds in cash prizes, with a jackpot of five thousand pounds, dozens of one hundred pound prizes, plus hundreds of mystery prizes. In GAME ONE, if you have revealed two matching amounts of money, you are on the first step to winning either the £5,000 Jackpot, one hundred pounds cash, a camcorder,
a play station or one of our mystery prizes. To discover which prize you have won, you must now check the prize number printed vertically in the box along side the cash amounts. This is a five figure number.

If the prize number on your card is 66920, you have won the £5,000 jackpot.
If the prize number on your card is 99986, you have won the camcorder.
If the prize number on your card is 00087, you have won the play station.
If the prize number on your card is any of the following numbers you have won one hundred pounds. The numbers are. 03265 43860 17569 55565 33169 56921

If the number on your card is any of the following numbers you have won a pair of trendy designer sun glasses retail value of ten pounds. The numbers are: 06740 - 84742 - 96241 - 53241 - 87640 - 00127 - 16747 - 25787

That completes the list of winning prizes. To claim your prize, you must send us the complete scratch card, which must have a valid claim number, which we are about to give you, so have your pen and card ready.

Your claim number is 445566 - that's 445566. Please write this number in the box on your scratch card. Without this claim number your card will be invalid. Also write down the prize you are claiming in the box provided.

If you have won a major prize, that is any prize valued over twenty pounds, you must send in your claim by registered post together with a stamped addressed envelope.

If you have won a small prize send your entry by normal post, but this must be accompanied by a large stamped addressed envelope.

Please post your claim together with an SAE to us at the following address;
Great Scratch Card Game, PO Box 123, London, W1 1AA.

Well that completes our service for today - but before you go, if you are into big prize competitions, why don't you visit our web site at the-great-scratch-card-game.com, there are daily competitions with hundreds of prizes, including a Mercedes C class, holidays in the Caribbean and hundreds of instant cash prizes - the daily jackpot is five thousand pounds - someone has got to win it, why not you. Thanks once again for playing and goodbye.

* PRODUCTION
This involve both the design and printing of your scratch cards. The design should be done by a professional, because the visual impact is all important. Scratch cards which are distributed through the national newspaper and
magazines rely on high impact copy and graphics to grab the attention of the readers. You only have that fleeting moment when the card falls out of the newspaper or magazine to grab the reader's attention and persuade him to
participate in the game. For this reason the cards should be in full colour, at least on one side.

The size of your scratch card will be determined by two factors. Cost and the ability of the particular media to insert the size of card. Today, virtually also insertions are done mechanically. This equipment can only handle standard size and weight inserts. For this reason it is absolutely essential to check with each publication what their requirements are.

From a cost view point, the smaller the card, the lower your cost per thousand. For this reason the most popular sized cards have tended to be A6. Any smaller than this makes it difficult to provide the necessary information with sufficient impact. More recently, the major scratch card promoters have tended to favour the larger A5 card size, which gives more space and impact.

Costs for printing scratch cards can differ dramatically. To stay within your £30 a thousand budget, you must aim to pay no more than £10 a thousand for the printing. This can normally only be achieved with minimum orders of
one million cards or more.

Although ordering several million cards can reduce costs, these become less significant past the 5 million mark, simply because the majority of the cost is in the paper or card. So increased runs do not bring significant cost savings. Furthermore, because your competition must have a specific time frame, and the competition's closing date must be printed on the cards, you cannot afford to print too many cards, as you will have insufficient time to distribute them.

* DISTRIBUTION
The right media at the right price. Without doubt, if you don't get these factors right, you can lose a pile of money. To stay within your income parameters, you need to pay no more than £15 a thousand for inserts, if you anticipate a 1% to 2% response. If you can achieve response rates of 3% or 4%, you can clearly agree to pay a higher insertion rate. But never consider doing such until you have tested and proved the response in the publication.

When you contact the various publications, they will automatically quote you figures of £60 or more per thousand for inserts. However, if you state that you intend to insert scratch cards, and are interested in a full run, they can
normally be persuaded to cut charges to under £25 a thousand. To achieve insert charges of £15 a thousand you will have to persuade them that you are a major player and will be inserting cards long term.

Alternatively, use a specialist advertising agency, one which specialises in direct response advertising and inserts, and which through their volume dealing can negotiate such rates.

Your selection of media will be determined by how focused your competition is. If you are seeking a broad base of players, you should focus on the large circulation national newspapers and magazines. In particular the national
Sunday newspapers and the women's magazines.

Be careful when distributing through a large circulation national newspaper that you have sufficient line capacity to handle the response. A Sunday newspaper will receive an avalanche of calls from noon till four. If you have
inserted two million cards in a newspaper like the Sunday Mail or Express, you could expect to receive over 30,000 calls, of which at least half would be received between 11am and 5pm on the Sunday, the balance being spread
over the rest on the day and Monday.

Many successful scratch card competitions are tailored to a particular market. For example a card designed for the new male magazines have been very successful. But it is important to design the card and offer prizes which will
instantly appeal to the readers of such magazines

* TIMING
The response that you receive from your scratch cards can be dramatically affected by when your inserts appear. The same publication can have very different response rates depending on the time of year, the weather, national
holidays or even political events.

The first thing to understand is that that vast majority of people will receive the cards at home. Therefore if you are inserting in a newspaper which has a very short life - normally just one day, it is far better to insert in newspapers sold at weekends, namely saturday and sunday papers. Sunday papers are the best because more people are at home on a Sunday than any other day of the week. These people are more relaxed and have more time to read the news paper.

Months to avoid are July and August. Response rates drop by up to 30% during the school holiday periods when several million people are away from home. Equally poor results can be experienced over the Xmas, Easter and
bank holidays. You should avoid placing inserts during these periods, unless you can negotiate a substantial reduction in insert charges.

National circulation magazines which are purchased over a number of days or weeks are far less affected by the short terms factors. They are affected by summer holiday months.

The weather can also affect your response levels. In bad weather, when people are reluctant to go out, there can be a positive increase in response. On the other hand, hot days drive people out, resulting in a drop in response.
Unfortunately, the vagaries of the British weather make it virtually impossible to anticipate the effect of the weather. It may however explain an increase or decrease in anticipated response levels.

Major political events, or sporting events, can also distract people, with a decline in response rates.