Brands have used sweepstakes and contests to attract and delight customers for the last 100 years.
Whether it's a standalone campaign to boost engagement or the cornerstone of your sales promotions, sweepstakes offer many advantages over traditional contests. We all love the thrill of being in with a chance to win something – it’s one of the great societal experiences. And they're an effective tool for customer acquisition across a range of B2C and B2B industries.
Today, we’re going to explain why.
Sweepstakes vs. Contests
In a nutshell, a contest is a game of skill. A sweepstakes is a game of chance.
The key thing to remember is that, while sweepstakes are a type of contest, not all contests are sweepstakes. Contests come in many different forms, including gift-with-purchase, instant win, and social media contests. Another key difference between sweepstakes and contests is the winner selection process:
- Sweepstakes winners are selected at random from the pool of qualified entries. While some sweepstakes may be segmented by certain criteria, every entry has an equal chance of being chosen. This gives them the advantage of being easier to enter. Use experienced sweepstakes vendors when starting any campaign.
- Contest winners are selected based on their merit, either by a judge or by public vote. Unlike sweepstakes, contests ask people to submit something for judgment by others to determine the winners. For example, a photo, video, or idea.
How do Consumer Sweepstakes Work?
Consumer sweepstakes and contests work because your audience believes you’re offering something of perceived value for free (or at least at a discount). Simple, right?
Well, not exactly.
There’s a lot of psychology that goes into a good sweepstakes, which explains why it’s such an effective tool for your customer acquisition strategy. But as we’ll see, it all revolves around the idea of perceived value.
The customers' evaluation of the merits of a product or service, and its ability to meet their needs and expectations.
Customer’s Expected Benefit – Customer Perceived Cost = Customer Perceived Value
The Psychology of Perceived Value
From simple purchase and non-purchase sweepstakes to sophisticated omnichannel campaigns, there's a different type of sweepstakes for every occasion. But whichever one you choose, they're all built on the same psychological foundations.
You can create more excitement by bumping up perceived value using the following three levers.
Urgency is a powerful motivator that spurs people into action. It requires customers to rely on their instincts, rather than their reflective judgement. This can provide a welcome change of pace in a world where we’re forced to make careful decisions every day.
One of the best ways to use urgency to create continued engagement is with a series of rapidly approaching deadlines. For example, "Last chance to claim!" or "Don't miss out". We love contests with a countdown clock.
“Limited edition”. “One night only”. “Exclusive”. These simple words can increase the perceived value of a prize tenfold. It’s supply and demand, pure and simple. When there’s less supply, there’s more demand.
But scarcity doesn’t have to be limited to a single value. Flexibility is one of the biggest advantages of consumer sweepstakes promotions. A one-night-only event, for example, can further boost scarcity by limiting the number of tickets available.
Nothing says great value like the word "free". For many, it's an irresistible hook. In his book Predictably Irrational, Dan Ariely observes that people change their behavioral patterns to be more compliant when something free comes along. It also increases the perceived value of something because the cost (if we remember the equation above) is zero.
Capture your audience's imagination with a great prize and common entry barriers (scanning a receipt, completing a form, sharing a social post) suddenly become much lower. A great prize is one that both resonates with your audience and aligns with your brand message.
The Advantages of Consumer Sweepstakes in Customer Acquisition
Consumer sweepstakes create opportunities for people to get something in exchange for engaging with your brand. Unlike a hard sales pitch, we find that customers are more open to this softer approach. Contest emails, for example, have an average open rate of 8.8%. That's 5.5% higher than common email marketing campaigns.
Deployed correctly, some brands see an average of over 34% of new customers acquired through sweepstakes, contests, and similar marketing activities. But to achieve this, you can’t just give anything away.
Rewards aren't just about giving customers cool stuff. It’s best done by giving customers more options, instant gratification, tailored offers just for them, and an emotional connection or a sense of fun and adventure.
– John Fauller, EVP, Product and Innovation
The only way to acquire the customers you want is to understand who they are and what they need. This won’t just help you pick the right reward, but also the type of sweepstakes that will resonate best with them. More than that, sweepstakes are a great tool for engaging with and strengthening loyalty among existing customers, as well as increasing loyalty program participation.
9 Tips to Unlock Your Sweepstakes Advantages
So, how do you design a sweepstakes or contest that delivers? This will depend on various factors, including your overarching objective, industry, and audience. But here are the basics.
1. Make it Valuable
When we talk about 'value', we mean valuable to your target audience. Put the data you’ve collected to good use. For example, people might consider a Rolex valuable, but does it align with your brand demographics? Surprise and delight customers with more personalized interactions and relevant rewards to build true brand loyalty. For maximum engagement, consider giving customers the opportunity to earn bonus entries for extra rewards.
2. Make it Urgent
A sweepstakes promotion shouldn’t outlive customer interest and attention spans. Remember, urgency generates hype!
3. Make it Omnichannel
Increase participation by allowing entry via social media, text-to-win, the web (either the brand website or a micro-site for the promotion), or your dedicated app. Everyone has their go-to method for participation; leave no one behind.
4. Make it Defined
Do you want to increase web traffic? Boost app downloads? Build your CRM database? The goals you define at the outset should inform every aspect of your promotion.
5. Make it Easy to Enter
If your goal is to increase traffic, then make sign-ups easy. We’ve found that a simple text to an offer code, triggering auto-entry into a consumer sweepstakes promotion, is extremely effective. If you're looking for people who use the product, then include a purchase element.
Snipp Tip: Adding simple questions to a contest entry like "would you prefer a or b?" and/or other demographic-related questions can reveal more insights without the additional friction of sign ups.
6. Make it Viral
Allow participants to earn more entries by sharing the sweepstakes with their friends. This allows you to reward your most loyal brand advocates while reaching a wider audience.
7. Make it Scalable
With the right technology, you can capture the early results from your promotions to inform your wider campaign. You can then quickly adapt to customer responses and deliver more engaging, cost-effective promotions that will please your end consumers. Not sure what to look for? Invest in a sweepstakes management platform that covers all the bases: from activation and winner selection to legal.
8. Make it Legal
9. Make it Insightful
To enjoy the advantages of a consumer sweepstakes, you must have a mechanism for capturing and harnessing customer data. For example, our sweepstakes platform offers built-in data capture and analytics. This gives you actionable insights into customer behavior that you can use to inform future promotions.
Snipp tip: Looking for a shot of inspiration? Check out our sweepstakes case studies to see how we've helped global brands create their ideal sweepstakes promotions.
Make Sweepstakes a Key Part of Your Customer Acquisition Strategy
Sweepstakes and contests are great ways to drive sales, improve brand awareness, nurture customer loyalty, and elevate your customer acquisition strategy. They help you highlight product lines, promote events, and forge long-lasting brand partnerships. Consumer sweepstakes campaigns can even help you capture valuable zero- and first-party data, providing greater insights into your consumers’ preferences, needs, and purchasing behaviors. Make sure your sweepstakes agency sets you up for success!
But most importantly, they thrill your customers and keep them coming back for more. To learn about our Sweepstakes Management services, click here.