Running a competition or trade promotion can be an effective way of:
1. Generating interest in your brand;
2. Increasing sales; and
3. Generating a potential customer database.
Many competitions require a person to purchase a product or service to enter and there is nothing wrong with doing so provided the cost of the goods or service is not increased for the competition.
If you need to expand a customer database, you may wish to run an online competition which requires entrants to join the database in order to enter. If you are going to use entrant’s personal information for marketing purposes, be upfront about it so they know what they are signing up to and ensure you comply with the privacy act and spam act.
If you would like people to ‘like’ your Facebook page, you may wish to run a competition which requires entrants to like your page to enter.
Which prizes work?
When determining which prizes to give away its important to consider the customers you have or would like to have and their current wants and needs. Ten of the most popular prize groups include:
- Travel- not only airfares but also accommodation and tours if possible
- Bills paid
- Music/Concerts/ Sport Events Tickets
- Movies / Arts / Entertainment Tickets
- Cooking items /Whitegoods
- Health related prizes
Whichever prize you go with should be ‘wantable’ i.e. new and/or exciting. Ultimately, what will work will depend on your brand and what excites your customers.
Perception of the chances of winning is very important. This is the reason many companies give away major prizes and a large number of smaller prizes. Entrants pay attention to how often a competition is advertised. If they are seeing it on tvcs, hearing about it on radio and reading about it in magazines they will perceive their chances of winning as being lower which, in turn, increases the need to offer more prizes.
Ways people can enter
There are an endless variety of ways you can let people enter your competition. For example you could require entrants to simply submit their details online, purchase products, make an appointment with a sales manager, write a review on your products or services, to send you photos of them using your products. You can combine a competition with a rewards program, a new product launch or a database push. Ultimately, the method you use should be based on your objective.
Entrants prefer minimal effort to enter a competition and like to see instant results. We suggest you avoid complex entry mechanics which require too much time and effort as many entrants will simply turn people away.
When running a competition it is important to consider how long it will run for. The objective is to ensure that it is open for long enough so that people can see it and enter but not too long so that people forget about it.
If you are not sure about the method you should use we are more than happy to send you a proposal based on an objective and prize pool budget you supply to us and we will do so for free.
How to set a competition up
After considering the above you will then need to ensure you have competition terms and conditions which comply with the various state regulatory obligations and have obtained any Competition permit you require.
A Competition permit is required from NSW, SA, VIC and the ACT for a chance based competition with a prize pool of over $5,000 or from NSW and the ACT for a competition with a prize pool of under $5,000. The other states still have requirements you need to consider, but do not require competition permits.
The following diagram shows the process:
We can assist you with all of the above as well, including applying for any required Competition permit, as conducting draws on your behalf (with a JP present if required). We are always happy to answer any questions you may have so feel free to get in touch.