The value of sweepstakes and instant win games for promoting your business

By: Jack Winston

A few posts back, we discussed the group discounting phenomenon and the potential for these types of programs to drive a large influx of new customers. The key challenge for these programs is the expense of running them. In order to create a compelling campaign, businesses need to offer steep discounts to their normal pricing. For this reason, businesses typically can only afford to run such a campaign periodically (often just once in an effort to transform their business). Other forms of promotional marketing – like free samples, coupons, contests, and games – are used more commonly as ongoing marketing programs to retain customers, drive incremental business, or collect valuable market data. Sweepstakes are a particularly interesting class of promotions that have seen increased use with the relative ease of setting up such a program online or via mobile devices.

Economists have long observed a phenomenon known as “Long shot preference behavior.” Simply put, people tend to prefer a small chance at winning something of high value (A NEW CAR!!!!) to the guarantee of a small reward (e.g. 10% off your next purchase). This concept allows marketers to create the perception of a high value offer without actually breaking the bank. When the contest entry is set up to be simple and fun, these kinds of promotions are a great tool for 1) generating awareness and interest in a product or business; 2) gathering information from entrants; 3) creating a positive experience between company and customer.

Responding to the growth in online access, traditional marketing agencies have adapted their sweepstakes and contests programs to include online and mobile versions. With the growth in social media usage, a new class of companies like Wildfire and Votigo, has emerged to offer sweepstakes and contests tied to social platforms like Facebook. With the ease of forwarding on an interesting email or Facebook news feed item to other friends, online sweepstakes have the potential to “go viral” if set up and promoted properly. With a well thought out set of prizes and rules around the contest, this kind of promotion can create a tremendous amount of awareness and buzz while keeping tight control of marketing costs.

In past posts we have discussed the value of social media participation including Facebook “Likes” and check-ins on location aware platforms.   With privacy concerns growing, consumers must be offered something of value as an incentive for giving up valuable pieces of information like their contact information, their preferences, or their shopping habits.  A chance to win a valuable prize can be sufficient incentive to allay privacy concerns and drive up participation rates in social media or location based services programs.

Businesses are connecting with consumers through new channels thanks to social media, location based services, and mobile devices. New twists on traditional marketing programs like sweepstakes, contests, and games of chance have the potential to play an interesting role for businesses looking to engage their customers in new ways.

Creating new tools for businesses to engage with their customers is a focus of Bozuko and we are really looking forward to telling you more about what we have planned. 

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