Reward and incentive-based promotions, which include a wide range of marketing strategies, such as sweepstakes, contests, loyalty/rewards, couponing, sampling, and other incentive offers, are gaining new popularity in these uncertain economic times. This resurgent popularity is partly due to the power of promotions to interest, engage, and activate targeted consumer responses, and to produce immediate tangible results. Online technologies have further boosted the attractiveness of promotions by making them more efficient and cost effective, enhancing the message delivery options, and increasing the immediacy and richness of measurement and tracking.
However, promotions are also subject to a dizzying array of potential legal and regulatory requirements under both federal and state law, which can create the risk of significant fines or penalty provisions for violations. In addition, many marketers are daunted by the complicated and even mystifying "back-end" logistics of running a sweepstakes, contest, or other reward-based promotion.
Following and understanding these three steps to a successful online promotion will hopefully demystify the process and pave the way for integrating online promotions into your overall marketing strategies.
Step 1: Establish clear goals and objectives. All successful promotions should start with a clear understanding of the goals and objectives you are seeking from the promotion. These can range from building a registration database of entrants, communicating the features, advantages, benefits, and uses of your product or service, to just publicizing and drawing attention to a new product or service. Promotions should be thought through carefully to determine whether you want to incorporate a remarketing strategy such as an opt-in to a newsletter, or a traffic-driving mechanism such as a coupon. Understand your target audience and the exact marketing messages you would like to communicate and reinforce through the promotion. Promotional marketing strategies encompass a wide range of options that can be customized to meet your goals and objectives, as well as your budget.
Step 2: Determine the promotion structure that best fits goals and objectives. The range of promotional strategies to consider all have different attributes and requirements. We will discuss three main categories, each of which can readily meet your marketing goals.
1. Contest promotions: A contest is by definition an offer that awards a prize on the basis of a bona fide test of intellectual knowledge, skill, or physical prowess. The selection of winners and the award of any prize must be solely on that basis, and chance can play no part whatsoever in the selection process. Contests generally require specific criteria for the competition and the award of the prize(s). These rules and criteria must be applied fairly and on the same basis to all persons entered. Often contests require "judging" to take place, where all entries are evaluated on the same criteria by persons ostensibly qualified to apply the criteria. The required judging of all entries can be a daunting, time consuming, and expensive process. However, online technology has made it possible for remote or virtual judging panels to be employed where all entries can be evaluated, scores captured, and judging affidavits completed over a period of time, without the judges having to be brought together as a group. These online technologies have made contests more popular, and user-generated contests are now a staple of marketing strategies. Leading promotion companies have developed sophisticated software to enable this capability to be automated to a great extent, as well as store the entries in retrievable databases and capture and tabulate individual judges' marks for each individual entry.
Some promotions start off as contests, but the total number of submissions is then narrowed down to a smaller number of finalists through random drawings. This approach automatically converts the contest to a sweepstakes, which will be discussed next. Contests are often advantageous because of their ability to foster a deep interaction between the entrant and the product or service, especially in user-generated content contests. Without access to effective online technologies, this strategy can become very labor intensive and costly, which is why many such promotional strategies morph into sweepstakes.
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