Category Archives: Competition ideas

Four important points when designing a competition

Each competition has a different measure of success. Common indicators of success may include:

  1. An increase in sales over the promotional period;
  2. Increased awareness of the brand or your products;
  3. The development of a potential customer database for email or direct marketing; and / or
  4. The collection of data on your current or potential customers.

On review of over one hundred recent promotions, we have determined that there are a number of factors that influence success. These are listing in order of the priority as we have found them:

  1. Whether the right people know about the competition. A competition will not attract entrants unless the right people know that there is a prize on offer. Advertising should be aimed at entrants. Competitions are a very good call to action in an advertising campaign.
  2. Perceived odds of winning. Promotions which are widely advertised with fewer prizes on offer may be perceived to offer lesser chances to win. By offering major and minor prizes you can increase people’s perception of their own chances of winning.
  3. The relevance of the prize. The competition prize on offer should be something that your target entrants actually want to win.
  4. Ease of entry. Many competitions include layers of bonus entry mechanics or steps that entrants need to follow to enter. The harder it is to enter, the less entrants you will have.

The actual value of a prize is one factor that is not as important in determining the number of entries. Most entrants do not readily appreciate the difference between $5,000 and $10,000- they are both just a large sum of money & are hard to visualize.

Successful promotions: various factors at play

In our last post we spoke about the importance of ensuring that the prize on offer in a competition is in proportion to the steps someone needs to take to enter, i.e. looking at a consumer promotion as a trade between the consumer and brand.

Whilst we believe this to be an important factor, there are many other significant factors influencing the success of some competitions over others. We have spoken to an academic in this field who will be bringing this topic into focus with his work. In the meantime we wanted to discuss some of the factors with relevance as we see them. Running a successful competition may be part art and part science. Indeed, the copy, the artwork itself and the way the competition is communicated are important. Here are some other factors:

Competition effectiveness imageAdvertising is one of the most important aspects of competition marketing. Ensuring that people, and more importantly the right people, hear and know about the competition.

As discussed in our last post, the complexity of entry should also be considered. If a competition has a number of steps to be followed, it may also turn time poor people away.

Whilst the above is by no means comprehensive or definitive it does bring to mind the question: “is there a formula for success?’ If you have had experience with either successful competitions or a competition that did not meet your objectives we would love to hear what you think you did right or could have done better.

 

Essential elements to a successful consumer promotion

Consumer promotions or competitions are a form of trade between a consumer and a business. In exchange for the ‘chance to win a prize’ or multiple chances to win, the consumer is asked to provide their personal information, to purchase a product or service or to interact with a brand in some other way.

For a consumer promotion to be effective, the trade-off made by the consumer needs to be in proportion to what is on offer via the competition-

The most topical example of the above over the last quarter has to do with the collection, use and disclosure of personal information collected when someone enters a competition. It is fair enough to say that most consumers have an expectation that the information they provide will be used for marketing or promotional purposes.

However, if the use is too wide or the trade-off too unfair, potential entrants can be turned away. If you were asked to consent to receive unlimited marketing material from unknown third parties for a chance to win a holiday, you would be more hesitant to do so than if you were asked to simply subscribe to a newsletter (and given the opportunity to opt-out at any time).

Since the protection and understanding of use of personal information is such a relevant topic, it is now more important than ever to ensure that consumers understand how the personal information they provide will be used by the company collecting it. To do this, the intended use and disclosure should be clear on the term, in the advertising and in the Promoter’s Privacy Policy.

What is a reasonable trade-off will largely depend on the intended audience for the promotion which should tie back strongly to the actual brand and the types of customers the company is looking to attract or retain. Entry methods, prizes, ways of communicating with entrants and potential winners and advertising of the competition need to be focused on the demographics of the entrants that are sought.

Many companies go to extreme lengths to include various social media ‘likes’ follows and ‘shares’, to allow various layers of bonus entries and have a number of steps that need to be followed by an entrant to enter. These steps can overcomplicate the competition and push the balance away from a proportional trade off.

Simplicity is usually the answer.

Conducting a competition that is focused on your consumers, is proportional in what is on offer, and is communicated via advertising effectively is the right way.

Votes, shares, and referrals- do I need a competition permit?

We are often asked if competition permits are required for a competition where the winners determined on the basis of the number of votes, shares or referrals.

Such competitions can be an effective way of spreading a message or growing a customer database in a viral manner. Commonly such a competition would require the original entrant to submit an entry which others then vote on or require the entrant to refer friends and colleagues. The winner would be the individual with the most number of likes, shares or votes.

When conducting a referral based competition it is important to ensure you are compliant with the Privacy Act and Spam Act. It is not okay to send third-parties marketing material when they have not consented to the receipt of such material.

When conducting a vote based competition it is important to ensure you consider means to limit the risk of individuals buying votes or submitting multiple votes in breach of the terms and conditions. Permtiz can assist you in understanding your options to limit this risk.

Such a competition may involve an element of chance which would result in a need for competition permits. An element of chance may be introduced if a draw is involved or if a limited number (determined at random) can participate.

Chance can be avoided if the winners are determined on the most number of likes, shares or votes and there is a tie-break mechanism that requires and is judged on the basis of skill. For example, if two or more entrants receive the same number of votes, to determine the ultimate winner the Promoter could ask the tied winners to submit an answer to a question and then judge the winner on the basis of their answer.

Facebook update! The good bits and some potential issues

By Connor James

iStock_000023515521XSmall

Facebook updated its Facebook Page Terms on 26 August 2013 and the changes have far reaching implications in the world of competitions and trade promotions. There is already a reasonable amount of commentary but in this article we want to just let you know what the changes are and how they will impact you.

Easier to set up and more options

The big news is that Facebook promotions no longer have to be administered via an application in Facebook. Previously entry into a Facebook competition could not be on the basis of purely ‘liking a page’ but now, it potentially could be. There are still some restriction on the ways that people can be allowed to enter, specifically on the use of Personal Timelines to administer promotions:

“Promotions may be administered on Pages or within apps on Facebook. Personal Timelines must not be used to administer promotions (ex: “share on your Timeline to enter” or “share on your friend’s Timeline to get additional entries” is not permitted).”

Examples from Facebook of what is now okay, include for a business to:

“a. Collect entries by having users post on the Page or comment/like a Page post;

b. Collect entries by having users message the Page; and

c. Utilize likes as a voting mechanism.”

These changes introduce greater choice in terms of the entry mechanics which can be used for a Facebook competition.

The challenge introduced by the greater range of options is for marketers to ensure that they continue to review and manage the risks. Under trade promotion laws there is a requirement to keep records of entries and winners, and to ensure that only valid entries are included in a draw.

An example of where this could be a problem is where a business runs a competition open only to Australian residents over the age of 18 with entry via ‘liking’ a Facebook page. Without the entrant providing their details there would need to be another way of confirming that entries are valid.

Publication of winners on Facebook

Another significant change is the removal of the restriction on publishing winners of a competition on a Facebook page. In the past we were constantly asked to justify why this restriction was in place and we are glad we won’t have to in future.

Where responsibility lies

Responsibility for a promotion conducted on Facebook still lies with the business who has set it up. Facebook promotions must still contain:

“a. a complete release by each entrant or participant of Facebook; and

b. Acknowledgement that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.”

This in effect means that you (the Promoter) are responsible for ensuring that the promotion you run complies with Facebook’s terms and all other applicable laws. In Australia, significantly, this means that if you are running a chance-based competition you will still need compliant terms and conditions and competition permits.

For more information contact us or go to: https://www.facebook.com/facebookforbusiness/news/page-promotions-terms

Why businesses give away cash!

Each year hundreds of thousands of dollars in cash and prizes are given away by businesses via competitions. There are a number of reasons why businesses run competitions (also referred to as trade promotions). Competitions, when compared to discounting, can be a more cost effective marketing method in that predetermined prizes are being given away as opposed to a percentage off an undetermined number of sales.

Competitions can increase sales. Entrants in a competition can be required to purchase a product or service to enter. If the competition is structured correctly, the same customers can then lodge multiple entries when they purchase multiple products. Most of the top consumer brands run competitions in this way, promoting the competition on the product and at point of sale.

Competitions can also help businesses build customer databases. When it receives an entry in a competition, a business is provided with useful information about a consumer. In doing so, it is essential that the business comply with the Privacy Act, National Privacy Principles and Spam Act.

The essentials

There are many requirements to consider when establishing a competition. When drafting terms and conditions, a business must fully set out how and when people can enter, what the prizes are, their value, how the winners will be determined and how winners will be notified. Consideration must also be given to how many times people can enter the competition. The primary responsibility of the business is to be fair and abide by the terms and conditions.

Competition permits will usually be required from the state gaming agencies if the winners of a competition are determined on the basis of an element of chance such as a prize draw. Competition permits will not be required if winners are determined by a suitably qualified judge or judges on the skill shown in the entrant’s answer and there is no element of chance involved.

Conclusion

When conducted properly, competitions can be an exciting and cost effective way of increasing sales and further promoting a business’ goods and services. Businesses give away cash and prizes as they receive something in return and consumers love to win prize.

Permitz Group has been set up in the niche of competitions and trade promotions. Permitz Group can help set up your business’ competition and apply for competition permits on your behalf.

Tips to run a successful competition

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:

  1. Cash
  2. Travel- not only airfares but also accommodation and tours if possible
  3. Electronics
  4. Cars
  5. Vouchers
  6. Bills paid
  7. Music/Concerts/ Sport Events Tickets
  8. Movies / Arts / Entertainment Tickets
  9. Cooking items /Whitegoods
  10. 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.