Tag Archives: Australian competition permits

Competition Fundamentals Part 5

In this article we discuss the process of competition design, ensuring the competition is conducted in accordance with the terms and any required permits.

Step One- Consider your objective

The first step is to consider what you want to achieve by conducting a competition. Common reasons for conducting a competition include:

  1. To encourage loyalty;Modern business concept
  2. To increase sales of goods or services;
  3. To incentivise sales staff;
  4. To launch a new product or service; or
  5. To gain insights into customers.

When planning, executing the competition and subsequently analysing the results it is important to come back to the work you have done at this step. The measure of success will be framed in this context.

Step Two- Plan the promotion

The second step is to plan the promotion mechanic, prizes, and timings. Here are some questions to consider:

  1. How will entrants consider their chance of wining a prize?. i.e. if you offer more prizes your entrants may feel more comfortable with their chance of winning. It is important to be clear with entrants and not to overstate the chances of winning. It is less commonly known that the chance of winning a prize in a competition is typically much greater than of winning a cash prize in a typical national lottery.
  2. Is the value of the prize commensurate to the difficulty of entry or the purchase required? i.e. if you are only asking for someone to provide their contact details, is it worthwhile giving away a million dollars? Equally if you expect someone to purchase a product, enter their details, answer questions will a low value prize attract many entries?
  3. Are you able to meet the timings and dates specified. Be careful to ensure that you are able to open, close, draw promotions in accordance with the dates specified in your competition. Also ensure you allow about a month between applying for competition permits and your first print deadline- as you need to include permit numbers in all advertising.
  4. Are people going to hear about your promotion? There is no point in building a website and expecting people to come. A competition must be integrated into a campaign which includes advertising that will reach your intended audience.

Step Three- Document and get approvals

Any promotion should be supported by clear terms and conditions which document the competition rules. Click here for considerations when drafting terms and conditions. The lottery departments have a number of requirements which you must comply with in respect to timings and inclusions in the terms.

Overview

 

Permitz Group can assist you with each of the above aspects. Whilst we specialise in competition permits we also have experience in sourcing prizes, assisting with competition design, developing a competition website, conducting an electronic competition draw, and managing winners. Once you have terms ready you will then need to apply for competition permits- refer to our earlier posts for more on this.

Win! Grateful customers

Most of Australia’s largest and best-known brands give away cash and prizes every year via competitions, but there’s nothing to stop soloists getting a piece of the action, too.

Competitions can work very well to promote what it is that businesses large and small sell. Entrants can be required to purchase a product or service. Some applicants lodge multiple entries by purchasing multiple products, which can give your bottom line a boost.

When it receives an entry in a competition, a business is provided with useful information about a consumer. However, it is essential to comply with the Privacy Act, National Privacy Principles and Spam Act in the collection, storage, use and updating of, this information.

Competitions also create a general feeling of excitement and interest in a business brand. As an alternative to discounting, competitions can be a more cost effective option in that predetermined prizes are being won as opposed to losing a percentage off an undetermined number of sales, which cannot be accounted or budgeted for in advance.

How to successfully run a competition and avoid the pitfalls

Compliance with all state based regulations on trade promotions is absolutely essential if you are running a chance-based competition. Compliance with Australian Consumer Law is also essential for all competitions, whether they are chance or skill-based.

For national competitions, where the winners are determined by an element of chance, there are a number of essential requirements. These include:

  • You need terms and conditions clearly setting out how and when people enter, the prizes including their value, the number of winners, and how you will notify the winners;
  • Trade promotion permits will be required from NSW and ACT (unless an exception applies) if your prize total is $5,000 or less;
  • Trade promotion permits will be required from NSW, ACT (unless an exception applies), SA and VIC if your prize total is over $5,000.
  • You cannot begin advertising your competition unless you have received all of the relevant permits.
  • You will need to display minimum (condensed) terms along with permit numbers in all advertising of your competition; and
  • You must collect entries, draw the winners and award the prizes you say you will in your terms and advertising. Records, including entries and winners, must be kept.

If you are going to run a competition, it’s essential to ensure that you comply with the relevant laws.

When conducted properly, the running of competitions can be an exciting and cost effective way to generate increased sales and further promote your company’s goods and services.

Have you run a competition? Was it a success?