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Are competitions the most mis-guided marketing tactic employed by small business...or just an indication of a lazy marketer?
Why do businesses run competitions?
They usually say it is to build a data-base. And though they don’t say so, they think that by running a competition they will build a data-base for the price of a bottle of wine....or a dvd....
So not only lazy, but also cheap.
And an absolute waste of resources.
You know the score. They put up some prize. People hand over their details to be in the draw. The biz gets a stack of email addresses.
But who ends up on the data-base? People who want to win stuff.
Do they fit the profile of the most ideal potential customer for the business? Most likely not.
In fact it could be argued that the people who have entered are the ones who are least likely to have money to spend.
Some thoughts about competitions:
* Around about 20% of people are compelled to take action to win something IF the prize is appealing enough. Do the math – that’s 80% of people who won’t enter
* If you are going to run a competition choose a prize that reinforces your brand position. For example, if you are an accountant who promotes that you take the stress out of your clients’ life, have a prize of a massage or a weekend at a spa.....So, for the 80% of people who see the competition and don’t enter, they have still got the message that is at the core of your marketing strategy.
* Don’t theme your competition unless it is a direct match for the core message that you are trying to convey....Just because it is Valentines’ Day doesn’t mean you need to run a competition to win a romantic dinner for two. Just watch out for all the Easter themed competitions that many businesses will launch next month....
One of the few times I have seen a holiday/season/date competition work really well was when 2MMM ran a competition for Mothers’ Day....The prize was a penile implant for dad. It generated word of mouth and reinforced the, then, edgy brand of the Ems, whilst appealing to their core target market – whether they entered or not.
* Try not to give away your own product/service. You are telling people it is good value if it is free. If you have to run a competition approach relevant prize providers to enter into an in-kind arrangement where you cross-promote their product/service.
* Don’t exaggerate what a prize is worth....Especially when it is hours of your time/service. “Win $1000 of coaching” sends a message to potential clients that you are expensive or just deluded.
* Do get a permit. Unless you are running a competition that is a Game Of Skill, any form of Random Draw for prizes at most $ values in Australia require a Permit from the State or Territory that the competition is being run....and for online competitions that means every state and territory unless you preclude some within your terms & conditions.
* Do have terms & conditions. Can the prize be traded for something else? Is the outcome open to discussion? When/where will the prize be drawn (which is part of your Permit application)? How will the winner and non-winners be notified (also a legal requirement)?
* If you are going to have good old fashion entry forms distributed in multiple locations or through magazines/newspapers, put a code onto each different one so that you can evaluate the response from the various sources.
* If you are going to have entries online, again, create various identical landing pages, so that you can evaluate where the hits came from.
* If you are going to have people tell you their name and email address, at least take the opportunity to find out other key things about them – so that you can segment the data-base after the event into those who it may be worth following up with.
Any other suggestions for well run competitions?
Seen any really great – or better still really bad competitions lately?
* And has there ever been a decent photo taken of someone being given their prize?
Comments
If I want what a business is selling, no competition is going to "push" me from a "possible" buy to an "must buy now".
If the prize is sooooo good, I just have to enter, then it had better be in the luxury car market category.... Just a thought.
My thought process goes like this, "I am not putting my business card in that pile because I don't want to be harrassed by current and future sales people." That's pretty much the gist of it. I don't even have a 2nd thought to go with it.
One point you made needs to be highlighted. There is value associated with cost. When you give things away, the recipient often negates the value of that product or service. If you make them pay for it, they're invested - in you, your products and your services.
Thanks for a great post.
Yes - giving away your product or service really damages your brand. You create a perception that it has less value - and I think you send a message that says "I am not that busy with paying customers...".
I would extend this thinking to the newer business who discounts their price to secure those first few ellusive customers. As well as never giving away your product/service for a competition (Unless it is for a charity) I also recommend that you send an invoice that details the full price and put in print that the price is discounted by X% (even if that is 100%) in acknowledgement of securing a new customer.
I have seen many small biz caught by doing something at half price in the hope of getting the full price gig the next time....only to be told by the client next year that "but we only budgeted what you previously charged...", or worse "But why have you doubled your fee?". Doh!
I love the idea of a massage or spa visit as a prize, instead of giving away professional services. My main concern is that often small business competitions can reek of "amateur marketing/desperation."
Lots to think about.... thanks for sharing this!
Re a name for your blog however - rather than thinking of it as a competition - perhaps you can just go to your trusted advisors, visitors to your sites, customers and ask them to help you "crowd source" a name. It would certainly big a good question to pose to the Twitterverse.
There are also some great tools out there to get the creative juices flowing. Try www.wordlab.com
(And remember, utlimately, your blog name is just part of all of the branding tools that you use to convey the personality of your business. But from an SEO point of view much better just to call it Blog).