It’s true people like to win things, and it’s true you can promote your business by giving things away. And almost any small business with an online presence can do it. But there are several important considerations before getting started.
Before you jump right to it take some time to consider what you goals actually are because the outcome of the campaign could vary greatly depending on your approach, and although you may think it’s adding up to a successful campaign, it may turn out to be a disappointment. For example, are you building awareness for your business, building your email list, or trying to generate revenue from sales or advertising? The first two scenarios would hold more promise than the latter because a great percentage of registrants to your sweepstakes will only have one thing in mind and that is to win something.
Look Out for the Sweepers
They are called sweepers because entering sweepstakes is what they do. I’m not sure what the exact profile of this person is but for the most part they don’t care what the giveaway is, as long as it’s free and very easy to enter, they will enter. They will enter a sweepstakes for a lifetime supply of shoelaces just as eagerly as they would enter to win a new car. And usually it’s not going to benefit your business if a sweeper does win because they have no intentions of ever purchasing from your business, or even visiting you Website again except to enter another sweepstakes. In fact, most sweepers will opt out of any future mailings from your business so you don’t even get the benefit of trying to convert them into a customer.
Who’s Your Audience
So before you get started you’ll need to identify your audience and figure out how to reach them. In most cases it will be pretty easy. If you have a product or service that’s in demand then really all you have to do is narrow you sweepstakes announcement down to the online channels where your audience exists. These channels will be forums, social websites like Twitter and Facebook, and even message boards. And hey, just maybe you have a product or service that is so generalized that even the sweepers need it as well, in that case it’s easy, just enter your sweepstakes on one of the major sweepstakes sites like www.online-sweepstakes.com and watch the registrants come rolling in. Otherwise you’ll need to identify and target your online audience more accurately. Other approaches like sponsored search and press releases work well to, but they add to the overall cost of the campaign.
Identify Your Budget
But identifying the audience is just the start, and as you probably suspect, there are many important things to take under consideration before launching your sweepstakes, such as your budget. How much is this whole thing going to cost you? Well it all depends on the prize offering. Simplicity is key, low cost simple prizes are less expensive to giveaway, while expensive complicated prizes could easily exceed $10,000 just to write rules, purchase insurance and set up the campaign. But we are talking low cost here, so we will be giving away a low cost simple product.
Tips to Keep It Cheap
Costs can add up quickly, but there are ways to limit it. Many states require registration of the sweepstakes regardless of where you are located, but this is also dependant on the value of the prize. So by keeping the prize value low you lower cost of registeration. Currently New York and Florida require registration when the retail value of all prize is more than $5,000. Rhode Island registration is prize value of $500 or more. So by keeping that prize value lower you eliminate the cost and hassle of state registration.
Another issue is affidavit tax documentation for tax reporting purposes. If a prize exceeds a certain value then you are required by law to administer the tax reporting process on behalf of the winner. Many 3rd party services will handle this for you, but they do drive up your cost. But by keeping the prize value low, say in the $100 range, you place the tax burden on the winner. You can also keep insurance costs low by giving away a low liability prize.
Sweepstakes Rules and Responsibilities
All this sound simple enough that you could technically launch the sweepstakes yourself. Some sweepstakes promoters do launch their own campaigns, including writing the sweepstakes rules themselves. And if you look around the Internet you’ll find sweepstakes that don’t even have written rules – never do this. The rules are your official contract with the public and you can’t change them once written. So to stay safe and legal seek a legitimate sweepstakes service. There are plenty of them out there and they vary in cost of several hundred dollars to several thousand for simple rules writing. The National Sweepstakes Company is one to look at.
The best approach to low cost sweepstake campaigns is to take the proper precautions the first time, such as a set of professionally written rules and necessary insurance requirements, if any. While having the sweepstakes professionally consulted will drive up the cost of the initial sweepstakes, it won’t be much. And from then on you can manage your own sweepstakes by applying your existing professionally written rules. And you’ll be nice and legal with all your bases covered.
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