You’ve decided that your current marketing tactics just aren’t cutting it. Instead, you think it’s time to do something big, bold, and different. You’ve heard about contests, sweepstakes, giveaways, and loyalty programs. But what’s the difference between them? And, which is the most effective option?
The short answer is that it depends on your objective. Is your goal to improve brand visibility? Is your priority driving traffic to your website? Do you wish to reward current customers? Do you want to engage with customers? Or are you hoping to accomplish something else entirely? Whatever it is, there’s a promotion that can deliver the results you want and your company needs.
Read on to learn the pros and cons of each type of promotion and when to use them.
Many people use the word “contest” any time there’s a promotion that encourages consumer participation, but it’s a little more nuanced than that. Technically a contest is a game of skill, and winners are selected according to an established set of criteria.
Of course, “skill” is loosely defined and encompasses everything from creating a new tagline for your company to creating artwork of your latest hamburger to posting a video energetically opening a subscription box.
How Contests Work
In developing a contest, start by what you want to accomplish and work back from there. Think of something that will be fun for consumers to do. The complexity of the contest should somewhat match the prize that you’re offering. For example, people will do a lot more to win an electric riding lawnmower than a branded insulated thermos.
You’ll also want to make it relatively easy to enter. But remember that you’ll need to have one or more people judge the entries. That’s why you’ll want to set the bar high enough, so judging isn’t more trouble than it’s worth.
Then spend some time outlining how people can win. Is it creativity? Is it originality? Is it the drawing that makes them most hungry? Document everything and make it readily available for people. Your website is a great place to post your contest rules.
You’ll also need to find judges. If you’re holding a high-stakes contest, take time to find people with some clout. For example, if you’re having an essay contest, find published writers. If you’re holding a baking contest, invite experts from the local bakery. If they allow you to use their names in promoting the competition, that’s even better!
Ideas for Customer Contests
There are so many opportunities for customer contests. For example, you may ask customers to:
- Show how much they like your products — This could mean submitting the best photos or videos of them using your products. So if you sell power tools, maybe the contest is to create the best social media post that shows them using one of your products for a home improvement project.
- Create opportunities to use your products — For example, if your company makes cookware, maybe you challenge customers to submit original recipes.
- Celebrate events with you — Contests don’t always have to be product-related. They can also be a way to share important events with your audience. Perhaps you ask people to share their favorite stories about mom when it comes close to Mother’s Day.
- Express thoughts about shared causes — 71% of people prefer to buy products from companies that share their values. So, if your company is committed to specific issues, you may consider having a contest that focuses on that. For example, if improving waste is a company priority, maybe you have an essay contest about recycling or other “green” activities.
What You Get Out of It
Contests are an interactive way to build brand awareness, engagement, emotional connection, and audience loyalty. A little competition puts your fans at the center of the story, allowing you to deepen your relationship with them in a fun way. The bonus is that customer-generated content can be used in future marketing activities — as long as it’s specified in the contest rules.
A genius example is the Pillsbury Bake-Off. Recipes from this annual contest are used for decades in promotional activities to encourage people to buy their products. And, who hasn’t purchased a canister of refrigerated croissants to try out a delicious-looking party appetizer?
When a Customer Contest Isn’t the Right Choice
If you’re trying to collect customer information, a contest that depends on “skill” might not be the right choice. Because it requires people to invest time and energy in their submission, those who enter customer contests are often customers. The exception is if the prize worth a lot or has coveted notoriety as with the Pillsbury Bake-off.
A sweepstakes is a program in which a consumer fills out a paper or online form for a chance to win a prize. While contests and sweepstakes may seem similar in many regards, the big difference is that the winner is always selected at random with a sweepstakes.
How Sweepstakes Work
Companies use various prizes from life-changing mega sweepstakes to more budget-friendly options like gift cards or movie tickets. Of course, what you offer will likely impact the engagement.
Sweepstakes are easy to implement and should be really easy for the consumer to enter. Entrants typically need to confirm that they are within the eligible age range and that they have read and agreed to the promotion’s official rules.
But there are a lot of rules for sweepstakes and giveaways. So, look for an experienced partner for online sweepstakes to help you navigate the nuances.
What You Get Out of It
A sweepstakes is effective at attracting attention and driving interest in your brand. If people visit your website for a chance to win a prize, there’s a good chance that people will stick around to learn about your products. So, take this opportunity to serve up the most irresistible content you can imagine. And, of course, the chance of winning can help people feel more positive about a company and its products.
But sometimes, ROI on sweepstakes is measured by the number of new contacts that result from the promotion. The personal information that the consumer provides on the form — typically name, address, and email — can be used to build a lead database or email contact list. Just remember to include an opt-in for receiving messages from your company.
When a Sweepstakes Isn’t the Right Choice
Sweepstakes are not the ideal choice if you’re hoping to deepen customer relationships or move people further down the buyer’s journey.
Rewards and Customer Loyalty Programs
We’ve heard it before: It costs about five times more to acquire a new customer than keep an existing one. And we know sales associated with existing customers are typically much higher than those attributed to new customers. So what should companies do? The clear answer: Reward them.
How a Loyalty Program Works
There are many different types of customer loyalty programs, including tiered loyalty programs, points-based systems, cash-back loyalty programs, punch card programs, coalition loyalty programs, premium loyalty programs (fee-based loyalty programs), and hybrid loyalty programs — each with different advantages.
It’s important to remember that loyalty programs don’t have to be complicated. A discount on a future order or points earned on every purchase can go a long way toward encouraging repeat business. Just make sure that the rewards are something that your customers care about, and you clearly explain how they can earn them.
But since this is a more significant lift from an ongoing administration standpoint, you’ll want to look for a customer loyalty platform that makes it easy to track and engage customers.
What You Get Out of It
There are so many statistics about loyalty programs that underscore the value of using rewards to engage customers. Here’s just a few:
- 79% of consumers say loyalty programs encourage an ongoing relationship with a company.
- The average order quantity can increase up to 319% after incorporating a loyalty program into an e-commerce platform.
- After receiving an incentive from a company, 75% of consumers say they are likely to make another purchase.
The answer is clear: Loyalty programs result in more loyal and engaged customers who spend more.
When a Loyalty Program Isn’t the Right Choice
It’s hard to create a lot of buzz about a loyalty program — so it might not be the best choice if you’re trying to make a splash. In addition, loyalty programs usually aren’t that great at attracting new people to your brand. However, in some cases, an incentive or loyalty program may push people to complete the check-out process.
Sales Incentive Programs
When selling B2B products, the sales process can be highly challenging. Products are more complicated, there are multiple decision-makers, the sales cycle is longer, and competition is high. That’s why companies typically depend on a direct or an indirect sales team to navigate the sales process. To encourage desired behaviors in salespeople, many companies often use sales incentives.
How a Sales Incentive Works
Incentivized behaviors can be directly related to the sales process — such as the number of scheduled product demos — but don’t have to be. For example, companies may provide a perk for completing sales training, completing paperwork on time, or sharing a success story with their peers.
Companies often gamify sales incentives, making them contests that pit the performance of one salesperson or team against another. When using sales incentive contests, ongoing communications are essential to keeping the sales team motivated for the duration of the incentive. While email is a reliable method, sending goodies to your sales reps through the mail can be a great way to get their attention. If this seems like too much work, Point B can source the giveaways and coordinate the mailing for you.
Using a sales incentive platform can make it easy for companies to track and influence salesperson behavior. For example, our customer USG Flooring and Roofing leveraged our incentive app for an incentive program. Their sales team earned points for merchandise by participating in polls and surveys, watching videos and uploading files. The app also made it easy for the reps to track progress toward sales goals.
What You Get Out of It
The right sales incentives can lock in higher sales for your company — and if you make the process engaging, your outcomes will likely be even better.
When a sales incentive isn’t the right choice
A sales incentive may not be the right choice if you’re selling directly to consumers or if the sales process for your products is straightforward.
It can be a bit confusing to talk about promotional giveaways. That’s because people use the term to describe different things:
- A sweepstakes program in which customers have the chance to win a free item
- Contests in which people show off skills to win a prize
- The items that are given away
No matter how you choose to use the term, there is a universal truth: The choice of promotional items and prizes can make a big difference.
In devising giveaways, consider offering robust reward options including prizes, points, miles, cash-back, discounts, preferred customer status, or something specific to your organization.
Of course, the value of a good tchotchke isn’t limited to contests and sweepstakes. Promo items are great to use for in-person events, and unique or hard-to-find items can often stop event traffic and help you secure leads.
Giveaway items can be useful to show appreciation to loyal customers. And, because they can remain on desks and in homes for years to come, promo items can serve as an excellent reminder of your brand.
Are You Ready for a Rewarding Relationship?
Choosing the most rewarding promotional program depends on your company, your customers, and where they’re at in the customer journey. Regardless of which approach you to choose, you’ll need an end goal that’s meaningful to participants — and a way to make things happen. We can support you with every aspect of your sweepstakes, contests, loyalty programs, and sales incentives.
Our online sweepstakes platform and incentive and loyalty platform make it easy to encourage and reward specific behaviors. We can ensure that your programs follow the legal requirements and help source and distribute prizes. If you’re not sure what’s the best choice for the situation, let us know. We can help design a promotion that’s perfect for your goals.