Everyone wants to be a winner. Whether it’s a friendly game of backyard cricket or a million dollar lottery draw, if you’re in it, you probably want to win it.
There are psychological explanations for this innate competitiveness. According to some researchers, “‘competitiveness’ is a biological trait that co-evolved with the basic need for (human) survival” (remember that the next time you buy a lottery ticket).
However, when it comes to competitions, there’s no need to overthink things. Entering a competition is fun. Winning a competition is fun. And, for marketers and entrants alike, competitions can be hugely rewarding.
Consequently, it should come as little surprise that competitions & prize giveaways are a highly effective marketing strategy. To put this in context, XCOM have developed and launched more than 2,000 client competitions over the past 14 years; acquiring approximately 60 million entrants. That equates to an average of 30,000 entrants per competition. Put simply, people love competitions.
So, what makes competitions such an essential acquisition strategy? We analyse the key benefits of competitions from an email marketing perspective, plus some bonus tips on how to get started with your own amazing competitions!
Build Your Audience
Competitions are one of the most reliable and cost-effective acquisition strategies. While giving away awesome prizes is fun (and might make you feel a bit like Santa), generally, audience acquisition is the primary goal of a competition or prize giveaway.
Most well-designed competitions rely on the ‘rule of reciprocation’, that is, offer your customer something worthwhile, and they will feel like they should provide you something in return. In a competition context, this usually means offering a prize in exchange for the customer’s email address. In a competitive landscape where customers are increasingly savvy, offering a prize in exchange for an email address can be an effective strategy, increasing your chances of success.
There are countless examples of brands using competitions to achieve significant audience growth and increase conversion rates. To highlight a few, Fatherly ran a Facebook prize giveaway which resulted in 49,000 new email subscribers and an 85.9% conversion rate – all for a prize worth just $1,200!
Elsewhere, French fashion brand Ventee-Privee launched in the UK with a competition offering a weekend trip to Paris. Over 34,000 people entered, of whom, 40% (13,600) signed up to become members.
Closer to home, XCOM’s recent ‘Undress for Winter’ competition led to a 13% increase in Destination Gold Coast’s subscriber database. Check out the full case study here.
If you’re not yet convinced, a survey by Unbounce found that landing pages which offer a $500 prize collect 700% more email subscribers than landing pages without any prize offer.
Basically, when it comes to building your audience, competitions have no competition!
Building your audience is great, but it doesn’t mean much if your new subscribers aren’t engaged and converting. Luckily, competitions and prize giveaways are also a great way to increase audience engagement. One study found that 52% of people who receive a promotional giveaway go on to develop “a consumer relationship with the brand”.
For example, XCOM’s recent scUber competition reached an estimated global audience of 3.3 billion and generated 3,900 positive news stories. While not every competition will achieve this level of engagement, a well-crafted competition that understands its target audience and uses techniques such as interactivity, authenticity, and gamification can yield excellent engagement outcomes.
Competitions that capitalise on gamification can be particularly successful, with Gallup research finding that brands who engage customers via gamification experience 63% less customer attrition as well as a 55% higher share of wallet. One example of a high-performing ‘gamified’ competition is McDonald’s Monopoly, while other formats such as online scavenger hunts have also been successful.
Harnessing user-generated content within competitions can also be an excellent way to increase engagement. A recent survey found 60% of consumers believe user-generated content is the most authentic type of content. Photo and video contests, such as Airbnb’s ‘AirbnbShorts’ competition where users uploaded “15-second videos that would inspire people to visit their city”, are a great way to leverage user-generated content in a competition format.
Prizes Make Perfect
Most people have probably read the call to action ‘Enter now for your chance to win’ so many times that it has lost all meaning. Still, an awesome prize can be nearly impossible to resist. When it comes to competitions, prizes make perfect. A good prize can be the difference between a success or an underperforming competition. However, choosing the right prize isn’t as easy as it seems.
Firstly, the higher the barrier to entry, the more valuable a prize should be. If competition entrants need to fill out a long form or create their own content like photos or videos, the prize should justify this effort.
Further, a free iPad might seem like a great prize, but if it isn’t relevant to your brand, then there’s a good chance you will attract the wrong type of entrants. People might sign up for the opportunity to win an iPad, but have no intention of engaging with your content. Offer a prize relevant to your brand, which will encourage entrants to continue interacting with your content.
Another key consideration is product-based prizes vs experience-based prizes, as a recent survey showed 72% of Millennials prefer to spend money on experienced-based products such as travel or music festivals. Offer a prize that is not only relevant to your brand, but relevant to your target audience.
Finally, teaming up with partners to offer prize components can be beneficial for both brands. This was evident during our recent scUber collaboration between Uber and Tourism and Events Queensland. Additionally, our ‘Undress for Winter’ competition achieved a 57% opt-in rate for prize partner Mantra Hotels. Developing business relationships via prize giveaways is another key benefit of competitions!
This guest post was written by Dom Murray, Marketing Specialist, XCOM. This post was originally published on XCOM’s website and has been republished here with permission.