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Getting a buy-in Featured

10:00am EDT July 22, 2002

When Jeffrey Chernoff learned he had been selected a Consumers' Choice Award winner, he knew of the program's prestigious reputation, but was hesitant all the same. After all, the program required him to pay a fee for the right to advertise his win.

"I was skeptical," says Chernoff, who at the time owned a veterinary practice with retail pet stores in Canada. "So I met with the principals, met with the agent for the survey company, asked intelligent questions and got honest answers."

He was impressed. The fact that the award put his business in a league with AT&T Canada and the Hoover Co. didn't hurt, either.

"That was another proof for me," says Chernoff, who won the award five times before selling his business and becoming involved in marketing the Consumers' Choice Awards.

Not everyone warms up to the Consumers' Choice Award program as wholeheartedly as Chernoff, though. When the program was introduced in Columbus last spring, only about half the winners were willing to fork over mandatory participation fees. Fees originally ranged from $950 to $4,300, Chernoff says, but have been lowered to $300 to $3,900.

Although organizers lost money because of the participation rate, it wasn't totally unexpected, Chernoff says. It was the first time the awards had been presented in the United States and, given his own initial skepticism, Chernoff probably knew what questions might be running through business owners's heads. Clearly he had a sell job to do here, one that will continue this year as the program gears up for its second survey this spring, followed by an awards program in June.

That sell job may have been made harder last year when apparent inconsistencies surfaced in conjunction with the Consumers' Choice Award. In April, media were given a list of "top award recipients"-which included the Hyatt on Capital Square, Wendy's, Cord Camera and Three-C Body Shop-at an introductory breakfast explaining the program.

In June, when the paid program participants were announced, Cord and Three-C were not listed, even though the April release said "all winners" would be officially announced that month at a gala award presentation. Chernoff says the April list was a sampling of recipients, not a reflection of any ranking, and that those who did not pay for the program were still considered winners, although they would not be recognized as such publicly.

That's a new approach for local business owners used to programs such as Ernst & Young's Entrepreneur of the Year Awards, the U.S. Small Business Administration's Small Business Awards and the Better Business Bureau's Business Integrity Awards, which do not charge winners a fee to publicize their honors.

To clear up confusion surrounding the Consumers' Choice Award program, SBN contacted area business owners and program organizers for additional information. Here's what we learned.

Why do business owners have to pay to publicize their awards?

"It's important for people to understand the two components: the [award] survey and the promotional program," Chernoff says. "They're kept independent to maintain the legitimacy and the authenticity of the program."

Business owners can participate in the promotional program-which does not alter the ranking established by the award survey, he says-on various levels.

For example, business owners can pay the base price of $300 to obtain only the sociodemographic results of the survey used to determine the winners, but that doesn't allow them to publicly promote their win. For publicity rights, the business owner must spend at least $950. The full promotional package costs $3,900 and includes survey results as well as media advertising, inclusion in a paid television broadcast coordinated by Consumers' Choice, award decals for the winner's use, lapel pins for sales staff, invitations to networking breakfasts after the event, promotion on the Consumers' Choice Award Web site and invitations to the awards gala.

Those who opt not to buy the promotional packages, however, cannot use the Consumers' Choice Awards name or logo in their advertising efforts.

Refectory owner Kamal Boulos, whose business was named the gold Consumers' Choice Award recipient in the "Fine Continental Cuisine" category, sees the program as part of his regular marketing and promotion. He would not disclose how much he paid to participate, but said he did not purchase the full promotional package.

"We opted to participate on a level that made us feel comfortable with at least just acknowledging the fact we had been selected and at the same time extending them some courtesy for their efforts," he says.

What happens if an award recipient chooses not to participate in the promotional program?

Chernoff says the ranking of the recipient will not change. For example, if the gold winner in a category opted not to participate and the silver winner did, Chernoff says, the silver winner still would receive the silver award.

That happened in the "Carpet and Rug Cleaners" category, in which Master Clean, the silver winner, participated in the promotional program but the gold winner, Stanley Steemer, did not. Nevertheless, a print advertisement for Master Clean included in a coupon circular last year carried a gold-trimmed Consumers' Choice Award logo with no indication that the company was not the top award winner. Chernoff says such designations are not necessary and that although participants receive promotional materials, such as stickers, in colors corresponding to the award level they won, color print advertising could include the generic Consumers' Choice logo, which has a gold-toned border.

Other categories, such as "American Family Restaurant," in which the top three winners-Bob Evans Farms, Max & Erma's and Cooker-did not participate, were dropped from the promotional program.

Chernoff says that in coming years, he will send to all recipients, regardless of program participation, a certificate denoting their ranking in the survey results.

How are businesses selected for the Consumers' Choice Award?

The organization hires an independent polling company to conduct a two-part telephone survey.

First, approximately 15 percent of the 1,550 respondents were asked to name a favorite business in some of the 241 categories such as fine continental cuisine and pharmacy, says Steve Valigosky, associate director of services/sales for Opinion Research Corp. International, the Maumee-based firm used for the Columbus survey.

Calls were made to consumers, executives of small and medium-sized businesses and executives from construction and automotive businesses, with certain category questions presented to each, Chernoff says. Jewelry, for example, was a consumer category, while duct cleaning was a construction category.

The most mentioned companies in each category were then compiled into a list and presented to the remaining 85 percent of the sample in the form of closed-ended questions.

The number of businesses from which respondents could choose during the closed-ended questioning varied from three to 10, depending on the category, Valigosky says.

How were award winners ranked?

Using a formula to compare percentages of responses, Opinion Research provided to Consumers' Choice the results of the survey, with businesses ranked first, second or third, says Scott Chambers, Opinion Research project manager.

Chambers explains that even though one business might receive more votes than another, a tie would be called if the results may not have enough of a "significant difference" theoretically and statistically.

That happened in Columbus in the jewelry category, in which International Diamond & Gold's 15.9 percent share of the vote was not significantly different enough from J.B. Robinson Jewelers's 13.3 percent to make either individual winners. Both, Chernoff says, were awarded gold rankings, while Diamond Cellar, which garnered 11.4 percent of the vote, received a silver ranking. Chernoff says business owners were notified if there was a ranking and/or a tie in their category, and that it would be noted on the business's contract should they enter the promotional program with Consumers' Choice Awards.

Despite this, International Diamond & Gold-which opted to participate in the promotional program, while the others did not-ran radio spots advertising itself as coming in first and the others as second and third. Chernoff says he was unaware of the ads and would clarify the rankings with International Diamond & Gold.

Business owners who were unaware of the ranking process and promotional program policies were left with a negative impression of the program.

"They had come to us and said, 'Gee whiz, you won. You were the Consumer's Choice for the jewelry category. If you spend so much money on these packages, you can publicize that,'" says R. Andrew Johnson, president of the Diamond Cellar, whose company was initially listed on the "top award recipients" list under the jewelry category in the April media release.

"We asked for more credibility, ratings and rankings because we didn't want to get involved in anything that wasn't 100 percent ethical," he continues. "They were a little bit reticent to get into that, and we said basically we can't get involved in that because it didn't meet our qualifications for ethics and things."

Chernoff says the final rankings showed that International Diamond & Gold received the top number of votes, and the selection of the Diamond Cellar for the company listed on the first release was arbitrary-a situation he called "unfortunate."

"For the sake of clarity, I probably should not have released it as early as I did, but we wanted to get as much publicity as possible," he says. "Next year there will only be an announcement after the final tabulations are made and we know everyone's ranking."

In addition, Chernoff says he will not release winners names in the future, only the promotional program participants.

IDG president Uziel Haimoff says he also was skeptical of the program at first, but he participated at the highest level after talking with Chernoff, seeing the statistical rankings and learning that Consumers' Choice invested in excess of $50,000 in the independent survey.

"The concept is good for the consumer. It doesn't say the other people are no good. It highlights people the consumer felt were the best," Haimoff says. "Most people come to buy jewelry in a place they trust. In our case, it has been very positive along those lines. It gives people confirmation that they're in the right place."

How did the Consumers' Choice Award program fare financially last year?

Chernoff says the 1998 participation did not cover the $250,000 it cost to get the program started in Columbus, but declined to say how short of the break-even point revenues fell.

Chernoff says he was pleased, however, with the participation rate of nearly 50 percent.

"Typically the program sees a dramatic increase in participation as the community at large becomes more aware of the nature of the program," he says, noting that in Canada's major markets, participation is 70 percent or better.

In Columbus, Chernoff says, a 75 percent participation rate would pass the break-even mark for the program, which was supported financially here by business sponsor Eddy Rajczyk, president and co-owner of Columbus-based Lighting Unlimited Inc.

Rajczyk became involved in the program after he saw it in Canada and was impressed that the results were backed by a survey.

"The legitimacy aspect of that got me very excited about the program," he says. "It gives the clout and advertising power to go out and say, 'We're No. 1.'"