Lottery-style Lead Generation: How to Use Contests to Boost Your Business

After seeing the huge excitement surrounding the latest Powerball jackpot, do you wish you could generate that kind of attention for your business? What if instead of you being the buyer of lottery tickets, you could be on the other side, offering the chance to win?

This post was inspired by a recent meetup of Oahu Online Business. I got to talking to Brian, an entrepreneur who sold baby clothes with his wife. His website is Baby Jolie’s Closet. The other members and I brainstormed ways to help him generate more traffic.

Originally, this post was going to be a round-up list of traffic tactics. But the contest idea was the most attractive to me, and was very timely considering all the media coverage of the Powerball lottery.

Why Contests?

As we can see by the interest in lotteries and the billions of dollars Las Vegas casinos rake in every year, gambling is a major form of entertainment.

The best way I’ve heard a marketer describe why contests work is “random incentivization.” Predictable is boring, random is exciting. As for incentivization, big prizes beat small prizes.

One great example is comparing vending machines to slot machines. The first machine gives predictable small prizes. The second machine gives random and potentially much bigger prizes. Which machine do people get addicted to for hours on end?

Contest Strategy

Now contests are fun and all, but you have to be clear on your goal. In most cases, it’s a tool for list-building. So after everything is said and done, what we want to have is an e-mail list of qualified leads that we can follow up with future offers.

How to Choose the Right Prize

This is really like 90 percent of the battle. If you pick the right prize, you’ll get a flood of targeted prospects. If you pick the wrong prize, you’ll build a list of freebie-seekers who waste your time. Think of it as the bait you will use to attract the right fish.

The Worst Prize: Money

Cash is the most general prize, which leads to attracting the most un-targeted audience. You’ll get people who don’t care about you, your business or your product. They just want the money.

On a related note, I’d put generic gift cards–like Visa or MasterCard or even Amazon–in the same category. Really niche-specific store gift cards can work, e.g. Whole Foods if you’re targeting the health and fitness market. But there are better prizes I’ll describe further down.

The Second-Worst Prize: The Latest Apple product or hot gadget

Same problems as offering money. You’ll get people who want the new iPhone or iPad, not those who are interested in what you offer. These contests can also appear really spammy.

The Best Prize: A Super-Mega-Deluxe Version of Your Product or Service

Let’s use our baby vendor as an example. The best prize for his business would be to give away a big bundle of his products. Not just one bib. Give away a whole wardrobe: pajamas, shirts, sweaters, jackets, etc. One of everything. Totally outfitted from head to toe.

Ideally, you want to get people excited about what you offer. The contest is a good excuse to put your products in front of the right people.

Hot tip: ask the winner to record a simple video (like with their smartphone) showing their face and more importantly showing off the prize–your products! A low-budget video like that carries way more credibility with your prospects than a slick production that would cost you a lot more. You can use that video as a testimonial for future contests and general advertising.

If the winner recorded her child wearing the baby clothes, even better. Baby videos in particular can go viral, so he might get free sharing from that.

For those who sell info products, consider offering something really valuable and intangible, like a unique experience. For example, a free 1-on-1 coaching session. If you have followers who look up to you as an authority, this can be a prize beyond price. Access to the guru is an awesome prize.

What would it be worth to have 1-on-1 basketball coaching with Michael Jordan? A jam session in a studio with your favorite band and getting feedback on your guitar playing? Talking investments with Warren Buffett? A critique of your novel manuscript by your favorite author? Use those examples to jump-start your imagination.

The Second-Best Prize: A Famous Product for that Niche (or Used by Someone Famous)

Continuing in the baby niche, what immediately popped into mind was those fancy baby strollers that Hollywood movie-star moms use. Just for fun, I did a search and came up with this article: The A-lists’ Favorite Baby Strollers. That’s an extra tip right there: choose a product you can say is used by a celebrity. Instant credibility.

This can sometimes work better than offering your own product as a prize, because a famous product will have an established market value. If your product isn’t well-known yet, it’s hard for prospects to know what it’s worth.

I read about an entrepreneur in the photography market who added a clever twist to his prize. He was trying to build a marketplace for photographers. In a stroke of genius, he made the prize a choice of either the latest Canon camera or Nikon camera. That’s an endless debate in that niche. Then he let photographers argue which one was better in the website comments, generating tons of discussion and engagement.

You can think of how to apply that for your niche. What are the top two brands in your industry that have big, rabid followings? You could offer one product from either brand as your prize.

I’m imagining what kind of discussion would go on for that baby vendor if a case of baby food was the prize. Where the winner could choose what brand. “Gerber is terrible! You only feed that to babies to punish them! Happy Family Organics all the way!” Disclaimer: I found those brands in a Google search and know nothing about baby food.

Hot tip: contact the company and see if you can get them to give you the prize for free, in exchange for giving them free advertising on your contest website. If you display their logo on your contest page as a sponsor, you’ll also be building authority and social proof for your business. Of course, get their permission first to use their logo when you request the free product.

You might have to call up the company and ask for public relations, promotions or a department like that. Works really well if you want to offer a really expensive prize where you wouldn’t want to shell out the money yourself, like how my baby vendor could avoid spending $1,000 on a luxury baby stroller. But don’t be ashamed to ask even if the prize is cheap–the real goal is to see if you can get the sponsorship and position your business alongside the big brands.

Going further, try and see if the company that makes the prize would be willing to promote your contest to their audience. Wouldn’t hurt to ask.

Summing up, the best prize is irresistible and niche-specific. While you might get lower entries than if you offered a hot mass-market product, the people who do sign up will be much more likely to later convert into buyers.

How to Target the Right Audience

Selecting the right prize will help you get more targeted leads. The other thing is to narrow your advertising to only reach the people most likely to be interested in your offers. That’s the one-two combo that will make sure only the hottest prospects enter your contest.

Sit down and brainstorm a list of competitors, brands and other businesses already selling to your audience.

Use the Facebook Audience Insights tool to learn more about your prospects. This is a tool that helps advertisers come up with ideas for targeting their ads.

In the “Interests” field, enter each competitor and run the tool. Do this for each competitor individually. You’ll find a lot of overlap, but also find some different things you might not have known about.

You’ll learn tons of great information about your audience: what businesses they already buy from, who are the influencers they follow, what websites and magazines they read regularly.

There are a variety of things you can do with these target ideas:

  • Run Facebook ads targeting those interests.
  • Go directly to the websites, contact them about doing “direct-to-site” media buy, and place banner ads on their website. Note: this is an advanced strategy and you’ll need to use an ad server platform to host your ad images and track them.
  • Contact website owners and influencers and try to get them to promote your contest for free. If you’re not sending their audience directly to a sales page, your contest could be a fun thing for them to share with their lists. Also makes them look powerful and well-connected to be notified about an event like this. You’ll probably have better luck with individual bloggers, rather than big brands or big media sites. That’s okay, some audiences are more engaged with individuals and more responsive, e.g. Oprah’s audience vs. CNN’s audience.

Basically, you want to attract people who would want to buy your stuff anyway.

How to Manage a Contest (tech stuff)

The easy way would be to run it on Facebook. Do a Google search for “Facebook contest app” and you’ll find loads of tools. However, be careful about rewarding people for sharing. See “Legal Stuff” section below.

I’m currently researching contest tools if you want to run your contest outside of Facebook. If you do a Google search for “sweepstakes tool,” “giveaway tool” and “contest tool,” you’ll find a lot of them.

Here are some key features you should look for:

E-mail integration. The No. 1 goal of running a contest is to build an e-mail list of targeted leads. Check to make sure the tool works with Aweber, GetResponse or whatever e-mail service provider (ESP) you’re using.

Some apps are a little sly and say you can export a .csv file of the e-mail addresses and upload them to your e-mail service.  That is not what you want. You want the contest tool to automatically add e-mail addresses to your e-mail list.

Hosted landing pages. You do NOT want to put the contest entry forms on your website. You might be a victim of success. If your contest goes viral and gets popular, the surge in traffic could overwhelm your web hosting and crash your website, if you’re on a shared hosting plan. Use a contest platform that will host your landing pages for you on their server(s).

Fraud detection. For any contest, you will get people who try to cheat. Like people entering multiple e-mail addresses for themselves, among other shady tactics. You want the contest tool to deal with that for you.

Gamification. Where you can give users extra points and chances to win if they complete certain actions, e.g. following you on social networks, e-mailing their friends, visiting your website, etc. This helps you get more viral traffic.

Some tools I’m looking at: ContestDomination, ViralSweep and Gleam.io.

If you want to do it the low-cost (but kinda ghetto) way, you can simply collect e-mail addresses using your e-mail service provider like Aweber and then pick a random e-mail address as the winner.

You might want to set up separate lists for each contest campaign you run. If you do like one every month, this will help you stay organized. You can have separate lists for each month, and one “master list” where all the e-mails get fed into for later broadcast messages. Check your e-mail service provider’s support documentation for “automation rules” to learn how to do this.

After the deadline passes, export the list then import it into the List Randomizer. Paste the e-mail addresses of the registrants and hit the “Randomize” button. Then you can pick the winner.  Simplest solution is to just pick the first e-mail at the top. But you can be original like, “My birthday is on the 10th so I’m going to pick the 10th e-mail address as the winner!”

How to Announce the Winner

Hot tip: record the winner-picking with a screen-capture tool.  Then you can embed the video on an announcement page that leads to an offer (more on that later). Also makes the process feel more real and authentic. Like a live lotto drawing. Feel free to have fun and inject enthusiasm in your voice: “And the winner of the Baby Bundle Complete Collection is . . . !”

As for tools, there’s Screencast-o-Matic (free up to 15 minutes). For PC, there’s Microsoft Expression Encoder. For Mac, QuickTime does screen recording (but not on PC, as far as I know). On a side note, if I wanted to create a video course as an info product but had no budget, those are what I’d use. If you’ve got the money, you can get Camtasia Studio (PC) or Screenflow (Mac).

However, one big drawback for recording the announcement with the List Randomizer is potentially exposing those e-mail addresses. Some people might have privacy concerns. Using a contest platform that only displays the winner and no one else would be safer.

Advanced tip: do a webinar that sells your main product, and announce the winner at the end of the webinar. Hot tip: make it a condition that the winner has to attend the webinar in order to get the prize. If they aren’t able to signal their presence by responding in the chat box or comments while the webinar is live, the prize goes to the next person (say this in your e-mails to induce scarcity).

To take it up a level, have three prizes. At the beginning of the webinar, give away the 3rd prize. In the middle of the webinar, give away the 2nd prize. At the end, announce the 1st prize winner.

For example, let’s say our baby vendor is not selling clothes and is instead selling an info product called the “Baby Brain Boost Master Class.” He could have a webinar where he talks about how there are foods that makes babies smarter, there are exercises that makes babies smarter, there are learning toys that do that, etc. without giving away too much of what’s in the main product, a video course. If it’s framed in an educational way like a web class or live interactive workshop, attendees won’t be turned off and might even really want to tune in.

GoToWebinar is the paid solution. Google Hangouts on Air is a free equivalent. The nice benefit is that the hangout is automatically recorded on video and exported to YouTube (you can change the privacy settings on the video later if you don’t want it to be publicly viewable). You can use any of the YouTube video download tools out there to grab the video to use in other things. GoToWebinar can record too, but you have to remember to do it.

However, one big drawback is that Google Hangouts can have horrible lag. So if you’re interacting with another co-host or with an attendee in video chat, there can be a long delay between when one person says something and when the other person hears it. This often leads to people talking over each other.

How to Monetize a Contest

The short answer: sell to the losers.

Follow up with everybody else by e-mail and say something like, “Thank you for entering. Although you didn’t win, I still want to show my appreciation by giving you a 50 percent discount on my products for the next 48 hours.” Then link to your website. You can get more creative with the offer.

Or like I mentioned earlier, you can e-mail a teaser message to drive users to an announcement page. “You may be a winner! Go to this page to find out if you won!”

Important: after you draft the announcement e-mail, you might want to check your language against a list of spam keywords. Lotteries, contests and sweepstakes can sometimes be filtered as spam by Internet Service Providers and e-mail services.

On that announcement page, you can put the screen-capture video of you picking the winner. Then in the video itself and/or in the text under the video, you can describe your offer for everyone else, then have a link or button to take them to the sales page.

Example:

“Didn’t win the baby bundle? Don’t worry! I don’t want you to leave empty-handed. As a thank-you for entering, you can get 50 percent off all my products for the next 48 hours.”

You could give them a coupon code, but my instincts say it’s better to do the work on your end and change the prices yourself and re-set them back to normal later after the promotion ends. One less hoop for the customers to jump through.

Hot tip: put a retargeting pixel on the announcement page and show ads to those people with your offer after they leave your website. They jumped through the hoops and went all the way to the final step of the contest, so they’re the most responsive.

Legal Stuff

I’m not a lawyer, so you should check the terms of service on any websites you plan to advertise your contest. Some ad platforms might have restrictions due to abuse–most likely by affiliate marketers touting free gift card and free iPhone/iPad/iPod “e-mail submit offers” from CPA networks.

Also check with your city or state’s department of commerce and attorney general for their rules on contests.

Although I’ve used the terms interchangeably in this article, these are the definitions I’ve seen:

Sweepstakes — requires no purchase and no skill.

Lottery — requires purchase and no skill.

Contest — requires skill. Also requires more work on the part of the promoter, since they have to judge the entries and select the best. With the other two, you just pull a random winner’s name and you’re done.

I’m not sure how up-to-date this is, but I found a newsletter with more information: An Introduction to Sweepstakes and Contests Law (PDF).

From what I’ve seen, the FTC has rules on if you reward people for sharing about your contest. This would definitely impact any viral marketing. There have been articles about it, but I’ll link you straight to the source:

The FTC’s Endorsement Guides: What People Are Asking

You’ll definitely want to look to see if you can be compliant with the rules and still get people to share. Social sharing can spread your contest far beyond your original promotion effort.

Recommended Resources

How to Cash in Big by Using Contests and Sweepstakes to Hype Your Promotions! – This is an issue of The Gary Halbert Letter that first exposed me to the idea of contests as a promotion tool.

Don’t know who Gary Halbert is? He’s one of the best copywriters and marketers who ever lived. Many of today’s best marketers have been directly or indirectly influenced by him.

The website isn’t pretty and there were lots of broken links last time I visited. Probably because it originally was a print newsletter. If you want to really level up, find a PDF of the newsletter archives. Get it and read it. Much better than navigating the website. If you find most marketing training to be boring and dry, Gary’s newsletter is like a jolt of electricity. He has a voice that leaps off the page and fires up your brain with ideas.

Advanced Guide to Sweepstakes – This beautiful online guide was put together by ViralSweep, a sweepstakes tool.

Leveraging Contests for Leads & Influence on Facebook (Video) – This is a presentation delivered by Travis Ketchum, the founder of Contest Domination, an online platform for running contests. He gives more up-to-date advice on using online contests to promote your business.

However, it’s still worth reading the Gary Halbert article. Although he primarily wrote about offline marketing like newspaper ads and direct mail, his stuff is still relevant.

What I Learned From Growing My Email List 3,418% (Nearly 200k) in Just 11 Days – An epic guest post on the Smart Passive Income blog. Josh Earl takes you behind-the-scenes of his massive contest campaign. What I love about this post was how Josh was open and transparent about all the things that went wrong: website crashes, fake entries from people trying to game the system and his own self-doubt that nearly sabotaged his success.

One takeaway lesson I took from the article was to not run your contest on your WordPress website. Use a third-party hosted contest platform to manage your contest. I think that would have solved 90 percent of the tech problems he encountered.

How to Gather 100,000 Emails in One Week – This guest post on Tim Ferriss’ blog reveals the insider details behind the launch of Harry’s, a men’s grooming brand. It’s good to see an example of using giveaways to launch a business selling physical products, in this case shaving equipment.

[Case Study] How We Collected 1,626 New Subscribers & Over 3,000 New Social Followers By Running a Giveaway – Great guide from Authority Hacker with lots of pictures and graphics.

How to use a giveaway to get 2,239 email subscribers in 10 days – Lots of good tips on free promotion for your giveaway.

Why We Keep Playing the Lottery – This article goes more into the psychology of why lotteries are so attractive, despite all the logical reasons why people should not play. The story follows Rebecca Hargrove, the mastermind who built several state lotteries into huge empires.

photo credit: PowerBall jackpot is a whopping $800 million via photopin (license)

2 thoughts on “Lottery-style Lead Generation: How to Use Contests to Boost Your Business

  1. Jeff Orig

    This is a great post! Sorry, I missed the meeting you talked about this due to a prior engagement. I will be at the next one. Do you have a favorite Contest tool? Or even one that you have tried? There are so many to choose from. Thanks.

    1. Marcus

      >Do you have a favorite Contest tool?

      Hi Jeff. I’m currently researching contest tools. If you do a Google search for “sweepstakes tool,” “giveaway tool” and “contest tool,” you’ll find a lot of them.

      Here are some key features you should look for:

      –E-mail integration. The No. 1 goal of running a contest is to build an e-mail list of targeted leads. Check to make sure the tool works with Aweber, GetResponse or whatever e-mail service provider (ESP) you’re using.

      –Hosted landing pages. You do NOT want to put the contest entry forms on your website. You might be a victim of success. If your contest goes viral and gets popular, the surge in traffic could overwhelm your web hosting, if you’re on a shared hosting plan. Use a contest platform that will host your landing pages for you on their server(s).

      –Fraud detection. For any contest, you will get people who try to cheat. Like people entering multiple e-mail addresses for themselves, among other shady tactics. You want the contest tool to deal with that for you.

      –Gamification. Where you can give users extra points and entries if they complete certain actions, e.g. following you on social networks, e-mail their friends, visiting your website, etc. This helps you get more viral traffic.

      Some tools I’m looking at: ContestDomination, ViralSweep and Gleam.io.

      Good luck.

Comments are closed.