How to ensure a great return on your prize investment
If your students and parents aren’t motivated to sell, you won't raise as much money as you'd like, no matter what your percent profit is. Chances are your students are becoming bored with the same type of incentive plan while you continue to listen to complaints from your parents about the lack of quality in the prizes.
If you’re open to considering better prizes for your fundraiser you may need to rethink your profit strategy. In other words, should you continue to offer a cheaper prize program at a higher profit or, consider offering a better incentive at a slightly lower profit?
More Traditional Prize Programs
Historically, elementary school sponsors have selected more traditional prize programs that have less expensive prizes at the lower levels. Students have to sell more items from their brochure to reach the better prize levels. It’s the prizes at the higher prize levels that initially get students excited about selling, but most will only end up winning prizes from the lower levels. The problem with these types of prize programs is that even though groups may receive a higher profit margin, they tend to not motivate as many students to sell. There have also been complaints about the quality of the prizes. Many sponsors are thus more motivated to choose better prize programs because students tend to bring in more sales.
Unique High School Incentives
Sportswear prize programs allow students to win sportswear for selling instead of the more traditional prizes most schools are used to. The advantage with earning sportswear is both parents and students find the quality and usability to be better than with traditional prizes; however the profit percentage that groups make can be lower as well. Sportswear prize programs are most popular with high school groups.
Cash Prize Programs are also more common with high school students, like bands and cheerleaders. Older groups like cash because it motivates them to sell more, and sponsors don’t have to deal with prizes. The company will issue a check to the sponsor for the cash that's been earned once their bill has been paid in full.
Newer Incentive Options for Elementary Schools
A newer type of prize program that's starting to catch on is where students earn admission to a fun activity like a party or a show for reaching a certain fundraising goal. The advantage to these prize programs is that both students and parents seem more motivated to sell because they appear to be fresh and fun. Students can attend the event by selling a minimal number of items. This tends to increase overall participation which can lead to an increase in sales.
Compared to a traditional prize program where most students who only win cheap prizes, getting to go to a fun activity instead is more appealing. These programs also encourage students to sell more because there are also higher prize levels. The potential drawback is that certain sales minimums usually need to be reached in order to receive these events for free. Some school fundraising companies offer a prorated charge back on their invoice for groups that don’t reach their minimums.
Prize Programs Determine Fundraising Profit
Generally if a school picks a traditional prize program for their fundraiser, there is more flexibility on what profit they can receive. This is due to the overall cost of the prize program from the company’s standpoint. More expensive prize programs like sportswear and event programs generally offer a lower percentage as a tradeoff. However, the tradeoff can be well worth it.
Sales vs. Profit Percentage
When selecting a prize program for your school fundraiser, it's important to also consider how you can impact sales rather than just focusing on what percentage of retail you'll get. Schools can actually end up bringing in less money even with a higher share of the gross. Remember, you don’t take profit to the bank, you take money.
Prize Programs Should Increase Sales
The most important factor when selecting a prize program for your fundraiser is how well it motivates your students and parents to get out and sell. You can receive the highest percentage in the world, but if your prize program doesn’t bring in sales it won’t matter. In general, better prizes may mean a lower percentage of gross sales, but a higher fundraising profit in the end. What you ultimately take to the bank should be the most important factor.