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Anyone who saw last month's Trouble at the Top documentary on BBC2, which revisited the Hoover free flights debacle, will have been reminded of the seismic impact a badly thought-through SP campaign can have on the fortunes of a company, and on consumer perception. Yet despite the very public dressing down of the vacuum cleaner manufacturer 12 years ago, figures compiled for P&I by the Advertising Standards Authority (ASA) show that complaints about SP are on the up.

The latest ASA figures show that complaints about SP rose by 22 per cent to 2,043 in 2003. It has to be noted that the total number of SP complaints as a proportion of all those received by the ASA remained static at 14 per cent, so the increase could simply mean consumers have become quicker to complain than in the past. But whether it's this, or the notion that there really is more reason for consumers to be upset, it's a worrying trend.

A breakdown of the ASA results indicates significant changes in the types of mechanic consumers complained about. Complaints about prize draws - already the most regularly disputed area - shot up by 40 per cent to 1,435, while disagreements over free offers climbed by 10 per cent. However, complaints about competitions fell by 27 per cent.

"With prize draws, the complaints we normally get involve confusion about the nature of a prize," says an ASA spokesperson. "If you have a headline prize of £10,000, customers with winning tickets often assume they have won that amount. But the small print could explain that a total of £10,000 is available; they might have won only £1."

Disappointed consumers

With free offers, disputes tend to focus on availability, as was the case with Hoover 12 years ago. It's no different today, although admittedly on a smaller scale. The ASA spokesperson says that although the Committee of Advertising Practice (CAP) code says goods should be supplied within 30 days, clients running the majority of the complained-about competitions cannot meet demand and disappoint consumers.

As with Hoover, this scenario does not need to occur. Mark Kimber, managing director at PIMS-SCA, says Hoover approached the risk-management firm for advice. "I said it would cost them at least £25 million, but the company said it had a fixed-fee deal with the travel firm. Yet Hoover didn't check the company had the strategy or the finances in place to cope."

Could Hoover have done something once the promotion was up and running?

"It could have pulled the plug," says Edwin Mutton, director-general of the Institute of Sales Promotion (ISP). "It would have been a PR disaster, but it could have saved a financial disaster. The longer it went on, the worse it got. Instead of cutting its losses, it put on extra shifts to produce more goods."

Although the Hoover brand has recovered its positioning in consumers' eyes, it's had to be on best behaviour for more than a decade to do so.

In a less than perfect world, marketers are still making similar mistakes.

Take mail order make-up firm Avon and its recent free Orange phone giveaway for the Anew range (see case study). Consumers paid £15 to get a free phone, but the offer was quickly oversubscribed. The number of vouchers available to Avon was fixed, so a fifth of applicants had to make do with a 50 per cent refund. Those who did get vouchers often found Orange stores out of stock and had to wait for their phones.

An Avon spokesperson points out that the offer was subject to availability.

But that doesn't wash for PIMS-SCA's Kimber, especially as Avon relies so heavily on its representatives selling to friends, families and colleagues.

"We once insured a promotion for Avon that resulted in a big claim," he says. "Unlike standard offers, Avon promotions are recommended, and generally by people you know. 'Subject to availability' may be legally watertight, but people get very upset. The fact that it's friends and family telling you you're not getting your phone makes it considerably worse."

Taking a knock

There's not much doubt that consumer perception of the brand took a knock, as perhaps it did with Cadbury's Get Active campaign last year. This involved children collecting chocolate wrappers so their schools could obtain sports equipment. Cadbury saw the scheme as a way of getting kids playing sports, but bodies such as the Food Commission perceived it as encouraging chocolate consumption and were quick to point out this view to the national press.

"There was nothing much wrong with the Cadbury campaign," says Mutton. "But although Cadbury will defend it, I'm sure it won't do it again."

If giveaways are still giving cause for concern, then those marketers running competitions have pulled their socks up, says the ASA spokesperson.

Complaints about competitions have fallen as those organising them "have learned the hard way. Competition organisers seem to be much more aware of the legal requirements, and they have also made terms and conditions clearer."

The message is straightforward enough: to maintain credibility with the consumer, communication has to be honest and clear. Yet, as the ASA spokesperson points out, marketers sometimes ignore clear communication in favour of a more attractive promotion that could give it a longer shelf life. "At the end of the day, if consumers are making purchases they don't need to, because whatever it is that communicates the promotional activity isn't made clear enough to them, they'll feel duped," concludes the ASA spokesperson. If your brand doesn't have the strength and longevity of Hoover, Cadbury or Avon, that is a high price to pay.

HOOVER - WHAT HAPPENED

"Anyone with an iota of sense could see it was a bum steer," says Edwin Mutton, director-general of the ISP, on the Hoover free flights debacle, the granddaddy of all SP cock-ups.

The promotion, launched in August 1992 and created by an in-house marketing team, offered two free flights to the US under the tagline "Two return seats: Unbelievable" to consumers who spent £100 on Hoover products. The going rate was around £400 per flight at the time.

The offer really was too good to be true. It cost the company £48 million, led to the sacking of its three top executives and resulted in Hoover selling up to Italian operator Candy in 1995.

When Hoover proved unable to meet demand, the outcry took on a life of its own. National newspapers took up the story as furious customers took Hoover to court. When early cases failed, the Hoover Holiday Pressure Group was set up, attracting 8,000 members, led by Harry Cichy. "Hoover wouldn't let you speak to anyone," he says. "This was a reputable company. I thought it couldn't be capable of putting together what was more or less a fraudulent offer."

Cichy claims to have seen Hoover's logging reports, listing 800,000 applications for pairs of flights. Around 200,000 people flew.

So, how did Hoover get it so spectacularly wrong? "What is on offer should never exceed the customer spend," says Mark Kimber, managing director of risk-management firm PIMS-SCA. "The reward-versus-spend balance was all wrong."

Mutton concurs: "The offer was too achievable. People happily paid £100 and sold the goods on."

Hoover didn't include conditions to cover itself, adds Kimber. "It gambled, and got it very badly wrong."

AVON ANEW

Avon Anew was a free mobile phone offer devised in-house that ran between February and April this year. The aim was to push sales of Avon's premier skincare range, Anew.

Avon's 160,000 sales representatives were given vouchers for free mobile telephones from Orange, which were passed on to customers who spent more than £15 on Anew products.

The promotion was rapidly oversubscribed. The promotional phones were often out of stock, leading to delays in delivery, and one-fifth of those who asked for vouchers never received them: the company had arranged to receive a fixed amount from Orange. Those without phones were offered a 50 per cent refund on their initial Anew purchase.

"The promotion exceeded our expectations," admits a spokesperson for Avon. "We anticipated high demand and the offer was subject to availability. But we are sorry some people were disappointed, which is why we offered to refund half the money from the orders of people who did not get a voucher."

If it were to run the promotion again, says Avon, it might consider upping the initial customer spend, but says its customers expect aggressively priced offers. Ideally, the company adds, it would want to offer the same deal but have enough phones to satisfy each applicant.

"We would want to obtain more vouchers," says the spokesperson. "When we realised how popular it was, we tried for more vouchers, but couldn't get them as it was a fixed contract."

CADBURY GET ACTIVE

The Cadbury Get Active promotion was run from March 2003 to April 2004 in conjunction with Triangle Communications.

A response to the outcry over child obesity, Get Active was designed to tackle the decline in physical activity and the increase in sedentary lifestyles by offering training for teachers and sports equipment for schools. Once a school had registered for the scheme, its pupils had to collect Cadbury wrappers to claim the sports gear.

The Food Commission calculated that in order for their school to qualify for a set of volleyball posts, pupils would have to consume 5,440 chocolate bars containing 33kg of fat and nearly 1.25 million calories. Newspapers joined the protests, as did the Consumers' Association. The Government's obesity taskforce was critical too.

Bizarrely, Cadbury itself had predicted problems. At the launch, director Trish Fields said: "Undoubtedly we'll receive some criticism for embarking on this, but it takes a big-hearted business with far-reaching brand awareness to do this job properly."

Cadbury UK and European media manager Tony Bilsborough insists the scheme was a success, with 6,000 schools signing up. But Get Active has been replaced by the current Great Things To Do promotion. The deal offers two-for-one access to a variety of activities, such as ice skating, on a single purchase. Bilsborough would not comment on whether Cadbury would reprise the free sports equipment idea in the future.

SALES PROMOTIONS COMPLAINTS 2003

COMPLAINTS 2002 2003 +/- +/-%

Prize draws 1,028 1,435 407 39.6

Competitions 124 90 -34 -27.4

Free offers 369 407 38 10.3

Scratchcards 103 75 -28 -27.2

Lotteries 37 27 -10 -27.0

Loyalty schemes 8 9 1 12.5

TOTAL 1,669 2,043 374 22.4

Source: Advertising Standards Authority