Choosing the “right” prizes is one of the most important aspects of running a successful instant win contest. It might be tempting to simply give away something everyone will love, e.g., cash or the latest tech. However, there are better strategies for choosing prizes for your contest.
By carefully planning your contest and choosing your prize, you can ensure your promotion will help your business hit your KPIs. Whether you’re looking to collect leads, engage customers, increase brand awareness, or boost sales, you want to be sure the prizes appeal to your target market.
Calculating Contest ROI
Remembering your budget and potential ROI is essential when choosing your contest prize or prizes. It can be helpful to estimate your ROI when comparing prize options.
To calculate the ROI of a marketing campaign, you use the following formula:
[((number of leads x lead-to-customer rate x average sales price) – marketing cost)/marketing cost] x 100.
- Number of leads: Those interested in your product or service.
- Lead-to-customer rate: Percentage of leads who make a purchase.
- Average sales price: Cost of product or service minus any discounts.
- Marketing cost: Cost of the marketing campaign.
For example, say you ran a contest where you collected 1,500 leads with a lead-to-customer rate of 10% (150 leads became paid customers) and an average sales price less discounts of $100. The contest cost was $3,000, including $1,500 prizes, $1,251 promotion and the $249 contesting software.
Here are those numbers placed in the ROI formula: [((1500 x 0.1 x $100) – $3,000)/$3,000] x 100 = 400%. As you can see, the ROI for the above example is 400%.
When estimating your ROI, you should consider the following elements, along with the type of prize you’ll give away:
A single prize vs. multiple prizes
Giving away a single prize or multiple prizes can significantly impact your contest. It might seem like a single grand prize is the best way to attract the most entrants. However, this isn’t always true, especially for instant win contests. A single grand prize can deter participants from entering, especially if they expect they have little chance of winning.
Instead, consider a multi-prize approach for your instant win contest. For example, you could give away many lower-value prizes, even allowing everyone who enters to receive something. Another option is to award smaller instant win prizes, then randomly draw a grand prize winner at the end of an entry period. In most cases, awarding multiple prizes is highly recommended when running an instant win contest.
Number of participants
It’s also important to estimate the number of participants you expect. If you’re looking to run a contest that will receive 1,000s of entries, you might offer a different prize mix than if you’re expecting 100s of entries. You might be more willing to invest more in prizes if you expect a lot of entries with a reasonable conversion lead-to-customer rate versus very few entries with a poor lead-to-customer rate.
Furthermore, contesting platforms often charge based on the number of contest submissions, so having an initial estimate will help you choose a platform that meets your needs and estimate contest administration costs.
Length of contest
The length of your instant win contest will also help inform the number of prizes you give away. For example, you might award 15 instant win prizes for a one-day contest but 60 in a month-long contest.
Digital vs. physical prizes
Remember that physical prizes require shipping, so account for the cost of sending your winners their prizes. Digital prizes are generally less expensive to award, assuming you currently use an email marketing platform.
Continue on to learn about the main types of digital and physical prizes for your contestants.
Types of instant win prizes
The type of prize you choose should appeal to your target market and reflect the effort participants must put forth to enter. Below are five types of prizes to consider for your instant win contest.
Swag (think branded t-shirts, hats, frisbees and keychains) is a popular instant win prize. Many companies have a lot of swag inventory to give away freely. Swag serves as subtle advertising for your business. Plus, your biggest fans will love wearing your gear and repping your brand.
However, swag might not drive new leads to your contest, as it’s unlikely that someone who isn’t a customer would be super interested in wearing a hat featuring your logo.
Winning a discount can motivate customers to make a purchase. You’ll often see discounts awarded as prizes in contests on e-commerce sites. However, any type of business can award discounts. Consider a range of discount sizes (e.g. 20%, 35%, 50%, 75%) and offers (e.g. free shipping, BOGO).
Discounts DO require your customer to spend money to reap the reward. Remember your target market when promoting your contest, as you want to ensure these hefty discounts get into the hands of people likely to redeem them.
One technique many marketers use is to award EVERY participant a discount. Giving everyone a discount makes all entrants feel like winners and can drive sales from new and existing customers.
Free products or services
Including your products or services as prizes is a great tactic for ensuring the leads you collect are people who are genuinely interested in what you offer. If someone wants to win the prize you’re offering, and that prize is your product or service, then it’s clear the entrant is a potential customer.
Beyond collecting qualified leads, using your products and services as prizes will save you money. Instead of going out and purchasing prizes from other businesses, you get your prizes at cost.
Products or services that complement your business
Giving away products that complement your business or have great appeal to your target audience can be another opportunity to gather qualified leads. For example, if your brand specializes in hair care products, offering a well-known blow dryer or hairbrush would be complimentary prizes for people who want healthy hair.
Furthermore, consider partnering with a business that provides a complimentary product for your giveaway. This partnership will improve your reach and reduce prize costs. Sharing the contest leads will be a win-win for both parties.
Big ticket items
Big ticket items can grab a lot of attention for your contest. However, these items might also generate junk leads and spam entries. Everyone wants a free car, and some folks will go to great lengths to increase their chances of winning by creating bot scripts and even manually finding workarounds to enter many times.
This isn’t to say that big ticket prizes are no good. Maybe you sell cars, or you run a cruise line. If that’s the case, then a free car or cruise makes a lot of sense. However, be sure to write your rules in a way that will help you disqualify any fraudulent entries that might find their way into your submission pool.
Your prize mix
Consider mixing and matching your instant win prizes across a few prize categories. For example, your prize pool might include 250 prizes in total, with:
- 100 Discounts,
- 75 Pieces of swag,
- 50 Free products
- 25 Complimentary products.
Ultimately, the best prize mix for your contests attracts your target market and helps you meet your marketing goals. You should experiment to find out what mix works best for you.
Looking to run an instant win contest of your own? ShortStack can help! We have several instant win contest templates and games to choose from. Contact our sales team to discuss your goals for your campaign today.