Tag Archives: Competition planning

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.

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.