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Contests, Giveaways, and Promotions

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  1. Sweepstakes and Contests
  2. Giveaways
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You've probably heard the expression "You've got to give something to get something." This push-pull method of increasing traffic and sales is practiced on the Net by many businesses - because it works. In this article, Frank Fiore provides an overview of your options for giving something away in order to get something (business) from potential customers.
This article was adapted from Frank Fiore's book, TechTV's Starting an Online Business. Frank is a regular contributor to InformIT.
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Your marketing bag of tricks needs to include more than just an advertising campaign. There are other ways to promote your e-business and spend your marketing dollars. The key to your e-business success is being able to generate a steady flow of new qualified prospects to whom you can promote your product or service. Contests, giveaways, and shopper services are some of the best ways to do this.

There are basically two things you can accomplish with these types of promotions. You can draw attention to your product or service offer, and you can generate a database of prospects that you can market to later. Either way, these promotional elements should be seriously considered when creating a marketing plan for your e-business.

So, let's start with contests.

Sweepstakes and Contests

Sweepstakes and contests are one of the most popular promotion gimmicks on the Net today. Do a search on Yahoo! for sweepstakes and you'll come up with hundreds of sites listing tens of thousands of sweepstakes in which consumers can participate.

Sweepstakes and contests can increase awareness of your product or service offer and drive traffic to your web store. In addition, sweepstakes are a great marketing tool.

You can announce your sweepstakes to newsgroups, online sweepstakes groups, and search engines. You can add a feedback form on the sweepstakes page asking for comments on your web store, product, or service. If you have a new product, consider making that your sweepstakes prize. By using your own products or services as a prize, this will target people who are interested in those products or services.

Another marketing trick is to build a list of potential customers by asking them to check a box if they would be interested in receiving email, newsletters, updates, or possibly catalogs of your products. And don't forget to contact all participants via email when you announce a winner of your ongoing sweepstakes.

Ongoing? Right! You can run a sweepstakes monthly, weekly—even daily. Announcing winners to all participants is a great way to keep your web store and its offerings in front of potential customers.

Great promotion tool, right? So what's the downside?

How about hefty fines—and even jail time.

Keep in mind that although sweepstakes and contests can be an effective marketing tool, you must structure them properly to ensure compliance with federal and state laws. But we'll get into this a little later.

Starting Your Sweepstakes

For now, how do you begin? As with any good marketing promotion, you need to plan the event carefully. To have a successful sweepstakes promotion, you need to take the following steps:

  1. Determine your promotion goals.
  2. Determine your target audience.
  3. Design the structure.
  4. Promote your sweepstakes.

Determining Your Promotion Goals

First step—determine your goals. That's easy. You want to drive traffic to your site. But after potential customers are there, you can use your sweepstakes for any number of things, such as gathering feedback on your web site and product offering, or building a mailing list of prospects (always ask if they want to be included in future mailings).

Determining Your Target Audience

Next, you need to target your sweepstakes to make the most of your promotion. Match your promotion to the goals you're trying to achieve and the audience you're trying to attract. Are you after a general audience? Offer a general prize such as cash, a CD player, VCR, or TV. Provide something almost everyone can use. If you want to target your offer to those consumers who use your particular product or service, make the prize either your product or service, or a similar one. The prize in this case qualifies the player for you. Although you'll attract fewer entrants, the ones who do enter will be more likely to purchase your product or service in the future.

Finally, give some thought to your prize. You don't have to offer a large expensive prize, such as a trip around the world or a new Porsche, to get a good response. But don't skimp on your prize, either. If you offer prizes such as coffee mugs, mouse pads, or T-shirts, your sweepstakes will get lost in the thousands of contests on the Net today.

Structuring Your Sweepstakes

After you've determined your target market, prize, and goals, it's time to actually structure the sweepstakes.

First up are the rules. Listing the rules on your site is very important in conducting a sweepstakes. At the bare minimum you should do the following:

  • Include the number of entries allowed (one per entrant or as many times as they like).

  • Mention whether the sweepstakes is run daily, weekly, monthly, or just one time.

  • Mention any restrictions or limits, such as age limits, if open to U.S. residents only or international.

  • Tell entrants when the sweepstakes ends and when the prize will be awarded.

  • Detail any and all information required for entry, such as name, address, zip, phone, email address, and so on.

Next, give some thought to the entry method. Will contestants email their entry to you in response to your advertisement or posting, or are they required to go to your web site and fill out a form? The latter is preferred if you want to ask some questions or get some feedback from the entrants or find whether they want to receive more information, a free email newsletter, or a free catalog.

In addition, make sure that the following information is included on your sweepstakes page:

  • Information about your company, or at least a link to your "About Us" page on your site.

  • Full description of the prize you're offering. Let entrants know exactly what they might win. For example, if they win a cruise or a weeklong stay in Disney World, is the airfare included?

  • A way to contact you in case an entrant has questions about your sweepstakes.

  • The official rules that address in detail the elements that make up the structure of your sweepstakes. Every legitimate sweepstakes must have a set of official rules. The official rules should state exactly how the sweepstakes is structured, as well as any restrictions or limitations about your promotion.

Promoting Your Sweepstakes

The final thing to consider is how to promote your sweepstakes across the Net. There are a number of web sites where you can post your sweepstakes and announce it to the world, such as Sweepstakes Online and FreeStuff 2000's Games & Giveaways page .

Keeping It Legal

Adhering to the law is extremely important with sweepstakes and contests. And it goes without saying that before you run an online sweepstakes to promote your e-business, you should seek good legal counsel first. The key point to remember is that a sweepstakes is not a lottery. If your online sweepstakes is considered by legal officials to be a lottery, you're breaking the law!

So what's the difference between a sweepstakes and a lottery? A sweepstakes invites eligible participants to register for a chance to win a prize. A drawing at the conclusion of the sweepstakes usually awards prizes. A lottery consists of a prize, chance, and consideration. It's the consideration part that makes lotteries illegal in most states. Although the definition of a consideration differs from state to state (you need that lawyer again), generally, consideration means that a willing participant is required to purchase something or pay for access to be eligible to enter the contest. Another example of consideration might be the requirement of the participant providing detailed consumer information to be eligible.

Finally, you must offer an alternative method of entry (AMOE). Allowing participants to enter offline via mail or fax is a form of AMOE. Why should you do this? Including an AMOE for your online sweepstakes might decrease the risk that a regulator will view a sweepstakes promotion as an illegal lottery.

In addition to the risk of legal action, if you run your sweepstakes improperly, or if the participants feel that it was run unfairly, you risk a public relations nightmare that will be hard to overcome. Just because you're a small business, don't think that you're safe by flying below the radar screen of state and federal regulators. Don't be lulled into a false sense of safety in numbers. Seek legal advice and run your sweepstakes properly.

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