Contests are a great way to promote your social commerce and customer loyalty programs. Whether your contests are on your site, offline, or on any of the popular social media networks, their success is primarily dependent upon two things: planning and marketing. In this article I will cover planning: incentives, contest platforms, and the information you need to collect. In the next article I will discuss tried and tested ways to market your contests.
Companies who utilize contests see on average 34% increase in their fan base.
Choosing the incentive for the contest is one of the most important parts of running a successful campaign. As a general rule, the prize that you are giving away should be at least 2.5x your average order value (AOV). However, depending on the price points and profit margins this may not be possible for every company. I recommend this as a good variable to A/B test. Generally, prizes will fall into one of three categories.
Gift Card Giveaway – The best gift cards are the ones that don’t have an expiration date or a minimum purchase restriction.
Product Giveaway –The product that you are using as the incentive should be something that resonates with all of your target customers. For example if you are a men’s and women’s apparel company it wouldn’t make sense to give away a pair of high heeled shoes, because most men won’t be interested and engagement will be low. Another example is something exclusive and related to the brand – like HerInteractive’s NancyDrew themed laptop. Her Interactive is a maker of interactive games for girls of all ages.
Another idea is to give away something like an iPad or iPhone even if your company doesn’t sell this product or because your product is a large ticket item like a car. Using popular products like iPad and iPhone tends to generate more engagement. Other variations of giving away product include ‘try for free’ (also ideal for big purchases like an exercise machine) and giving away accessories and add-ons.
Example: Campgear.com sells rugged outdoors sunglasses, among other things, so one of theirproduct giveaways is for a sturdy strap for the sunglasses.
Experience Giveaway – Giveaways that involve experience always generate the best engagement. This could entail a free trip to an event, tickets to some sort of outing related to your brand, or a meet and greet with a brand ambassador. For example, Unique-Vintage, a vintage clothing company and a Annex Cloud customer, ran a contest inviting customers to sign up for their newsletter for a chance to win free dresses for a whole year.
Example: A home makeover is an excellent example of an experience that most people can’t afford. If you’ve ever tried making over even one room, you know how valuable this is.
Depending on the products and services you sell, consider offering multiple experiences for customers to choose from. This not only allows you to test various offerings, it increases the entry into and engagement with the contest because the prizes will appeal to a larger audience.
Tip: Too many choices could result in diminishing returns. I recommend no more than 2 choices.
There are essentially 3 main types of contests in terms of the platform and placement, all of these can be highly effective based on the marketing tactics. They are:
35% of Facebook fans like a page so they can participate in contests
-Buddy Media Research
Example: Again Her Interactive periodically runs a contest for its popular series of games called Nancy Drew on Facebook.
Aside from affording ample opportunities to increase engagement, awareness, and sales, contests also allow companies to capture valuable insights. Brands can gather intelligence on demographics, behavior, likes and dislikes, and more. This information is helpful in providing improved products,services, user experience, checkout processes, and much more. While collecting customer information collect personal information only when absolutely necessary for your business like collect mobile phone number if you want to offer shipping status update via SMS.
Tip: Make sure to ask for permission to send text messages. When possible do not associate (or link) personal information with the individual’s contact and security information in your database. For example; if you need date of birth and gender information for your demographics based market research only, keep this information separate from the actual person’s name, email, and phone number in your database.
Below are some data attributes that we have seen our customers implement:
Contests are a highly effective marketing tool to help you achieve multiple goals at once. With proper planning they help increase brand awareness, user participation and engagement, customer interaction, and increased revenue and profits.