Marketing Sweepstakes and Contests

Marketing Sweepstakes

Have you ever thought about using sweepstakes as a marketing tactic? If you haven't, maybe you should . . . But before you announce your Grand Prize, here are a couple of things you'll want to consider.

Everywhere you turn there is a company offering a contest or marketing sweepstakes.

From free products to millions of dollars in prize money, the potential payoff for customers can be significant. But what's the payoff for businesses?

The popularity of marketing sweepstakes is just one indication of its promotional value. Companies rely on sweepstakes and contests because they have a proven ability to attract customers and generate brand recognition.

Although the size of the grand prize can reflect the promotional value of the sweepstakes, it's a mistake to think that bigger rewards will automatically deliver better results for your business. You don't have to give away a million dollars for an effective marketing sweepstakes contest. But you do have to be intentional about using the contest to deliver the right results.

Here are a few marketing sweepstakes tips that may come in handy:

• Goal setting. The design of a promotional sweepstakes begins by considering what you hope to achieve. The two most common goals for sweepstakes are brand enhancement and new customer acquisition. Even though these goals aren't necessarily exclusive, the one you choose to focus on will influence the shape of your contest.
• Establishing a company tie-in. To maximize the effectiveness of your sweepstakes, you'll want to make sure it relates to your company's mission and purpose. Carefully consider your sweepstakes' company tie-in rather than settling on a disconnected prize simply because it's convenient.
• Managing costs. Marketing sweepstakes promotions can quickly get out of hand. As much as you would like to offer a huge grand prize to one lucky customer, you have to weigh the cost of the promotion against its anticipated return. If you can't justify the sweepstakes' price tag, then you may need to consider an alternate promotional device.
• Sweepstakes details. The idea of a marketing sweepstakes is attractive for many small business owners. But it quickly loses its luster when it comes time for promotion and management. Unless you have significant sweepstakes experience, it's usually best to partner with a sweepstakes administration company who will handle all the details for you.
• Legal compliance. An added perk of working with a sweepstakes administration company is that they will handle legal compliance issues. Sweepstakes are highly regulated and one misstep could easily put your company in the legal hot seat.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities

Contributors

Business Glossary