And....the loser is....

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. And then there are the hundreds and hundreds of 'competitions' every day on social media. You have seen this on Facebook: "Like us to win blah blah blah". If I am seeing your post there is a really good chance that I HAVE ALREADY LIKED YOU. Then there is "Share this post to win". Well, frankly I don't want to fill up my timeline and bore my precious Likers/Follwers with non strategic competitions that may or may not appeal to them. 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 that its value 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. * And if you are going to run competitions on social media, always ask them to provide you with their email address at a minimum, and a few other questions that will help you identify whether they are in your target market. These details don't have to be posted publicly - Share a 'link' to an online form.

Any other suggestions for well run competitions?

Seen any really great – or better still really bad competitions lately? Please comment.