Contests and Sweepstakes : how companies benefit from their use

Contests and Sweepstakes

Contests and sweepstakes are two forms of sales promotions which attract consumers by offering them the chance to win a valuable prize.

Introduction

Consumers tend to like sales promotions because they get something for “free. ” If you as a marketer really want to get their attention, however, give a select few of them the chance to receive something with a high value.

Marketers who want to use this type of sales promotion have two options to choose from:

• Contests
• Sweepstakes

Contests

Contests normally require the participant to perform some type of activity. The winner is selected based on who performs the best or provides the most correct answers. No purchase is required to enter a contest and a panel of judges determines the winner. Consumers can enter as many times as they wish, although it is permissible for firms to restrict customers to one entry per visit to the store.

The Best Quote Wins: Contests require skill; sweepstakes generally only reward luck.

Sweepstakes

There is another consumer sales promotion known as a sweepstake (also known by its inflected forms which are both single and plural: sweepstakes and sweeps). These have become associated with marketing promotions targeted toward both generating enthusiasm and providing incentive reactions among customers. A sweepstake entices consumers to submit free entries into drawings of chance (and not skill) that are tied to product or service awareness wherein the featured prizes are given away by sponsoring companies.

Prizes can vary in value from less than one dollar to more than one million U.S. dollars and can be in the form of cash, cars, homes, electronics, and so on. In Australia, New Zealand and the United Kingdom, a sweepstake is known as a competition.

Sweepstakes frequently have eligibility limited by international, national, state, local, or other geographical factors.

Sweepstakes are often referred to by marketing promoters as second-chance sweepstakes when utilized in conjunction with the awarding of unclaimed prizes during instant-win promotions.

General Structure of Winning a Sweepstakes Prize

Almost every sweepstakes in the United States offering prizes valued at 600 dollars or greater will typically follow the following structure:

Sponsor
promotion

• Creating the sweepstakes promotion for a sponsor or sponsors;
• Advertising the sweepstakes, prize structure, and the official rules;
• Opening date for receiving entries;
• Closing date for receiving entries;
• Drawing date to judge winning entries.

Winner notification

• Sweepstakes promotion judges contacting the prize winner;
• Winner filing publicity release with sponsor’s sweepstakes promotion agency;
• Winner filing affidavit of eligibility (compliance with official rules) with sponsor’s sweepstakes promotion agency;
• Winner filling any required federal or state tax forms with sponsor’s sweepstakes promotion agency;
• Winner receives prize.

By law, the sponsors of sweepstakes must not require the prize winners to pay any shipping or handing charges in order to win or receive their prizes.

Sweepers frequently send out SASE (self addressed, stamped envelopes) to receive free game pieces, official entry forms, and copies of the official rules that are unique and pertain to individual sweepstakes promotions.

How Marketers Value from Contests and Sweepstakes

Marketers have a lot to gain from giving away valuable prizes to consumers. Contests and sweepstakes allow them to:

• Create a buzz about the product — With the rise of social media, word-of-mouth marketing can help make or break a product. Exciting events, such as contests and sweepstakes, encourage people to talk about the company and its products. It is a great, cost-effective way to extend your advertising reach.
• Draw traffic to their website or store — Some consumers may never have heard of your company before. So contests and sweepstakes offer these companies an opportunity to build brand awareness with such consumers.
• Build an e-mail list — Marketers usually give contestants a newsletter or mailing list opt-in option when they enter the contest or sweepstake. New names mean new potential customers in the long-run.
• Perform marketing research — Marketers can easily add a survey to a contest or sweepstakes entry form. The information gathered is just as valuable to them as the prize is to the consumer because it can help marketers better understand their target audience. This better understanding can lead to better marketing campaigns.
• Strengthen their relationship with their customers — People buy from people they like. Contests and sweepstakes allow consumers to interact with the company in a fun way and creates a positive image of the company and its products.