Hitting the Marketing Jackpot Through Sweepstakes

Sweepstakes can be a dynamic tool to help direct marketers achieve their goals. In this article, an authority on sweepstakes tells how and why sweepstakes can make your direct marketing effort more effective. The article provides an overview of what sweepstakes are, the different kinds of sweepstakes that can be used, and how you might go about using them.

HOW SWEEPSTAKES CAN HELP THE DIRECT MARKETER

Let's start by agreeing on the objective all marketers share: selling the product.

In many ways, your job as direct marketers can be a lot more difficult than that of someone who sells through retailers. Once the customers are in the store, they already have a mind set that will lead to action.

Contrast this with your potential customer. We would all like to believe that there is something so unique, so compelling about our own offer that the customer can barely wait to place an order. The truth is, too often, that your piece may get thrown away unopened. Your advertising message, no matter how well executed, may never reach your potential customer.

Obviously, to get your product sold, you have to accomplish three things; you have to:

1. Get the customer's attention.
2. Get him or her to hear what it is you want to say about your product or service.
3. Get them to act on the offer.

This is where a promotional overlay can really make a difference. But first, a basic definition: A promotion is the offering of something extra that the customer does not expect to receive in the normal course of the transaction.

The principle that makes the promotional device so effective is very simple: everyone, regardless of demographics, is anxious to get something for nothing, something they haven't really earned. That's why we all love a bargain, getting more than our money's worth.

The chance to win something falls into the same category. The desire to win crosses demographic lines. Witness the success of statewide lotteries in the United States. The chance to win a dream, the chance to get something for nothing is a positive motivating factor to a large portion of the population.

How can sweepstakes, the opportunity to win that dream, can make your mailing more effective? Actually, it works in three ways:

1. It helps to get the envelope opened.
2. It helps get people to read the mailing.
3. It gives an extra push to act on the offer.

Getting them to open the envelope

You've selected the right list. You have a compelling message. You've developed a good-looking piece. What happens next? Will they toss it out unopened? Will they put it aside to maybe look at another time? Or will they act on it? There's some research to support that 60% of all direct mail is thrown away unopened, unlooked at. So, if the use of the word "free" or "win" can get your potential customer in, involved, and excited--it can mean the difference between success and failure.

To get that envelope opened, you have to get past distractions. If on your envelope you announced, "Everyone to get this mailing will receive one ounce of gold--details inside," I'll bet better than 95% of those envelopes would get opened. Well, somewhere between that ounce of gold for everyone and absolutely nothing is a means that is both affordable and successful in motivating large numbers of people and that's a sweepstakes...the opportunity to win the dream! The words "You may already have won your dream home, or dream car, or dream vacation" on the envelope can break through clutter and provide extra motivation to find out more.

Getting them to read what's inside

You need to be able to tell your potential customer what's new or special or different about the product or service you have to offer. Here, involvement questions can be helpful. In filling out the entry, the customer is asked to answer some questions. The answers to these questions can be found in the sell copy. So if they want to win, and we already know they do, they have to go back and read that sell copy carefully.

Getting them to act on the offer

The final thing the mailing has to do is motivate response. Remember Newton's first law of physics: a body at rest remains at rest! Sweepstakes offer a powerful weapon in overcoming inertia.

First of all, if the order form and entry blank are the same piece, in filling out their entry they've already completed part of the order form. This really gives you a chance to ask for the order. They may have been thinking about it before, but now they have to make a decision--yes or no.

Frankly, for a sweepstakes to be legal, a "no" entry has to have every bit as good a chance to win as a "yes" entry. But research shows that most people believe that saying "yes" will increase their chances of winning. This belief often contributes significantly to a lift in orders. (By the way, having separate "yes" and "no" return envelopes plays into consumer skepticism about a "no" response can often be worth the extra investment.)

The prize structure can also be designed to speed up response. Extra "Early Bird" prizes can be awarded to those having their entries in by a certain time. This adds a sense of urgency and immediacy. For example, if your objective is getting Christmas orders in early, the offer might read, "For every day before Christmas your order (or entry) arrives, $500 will be added to your Grand Prize--if you're the Grand Prize winner".

BEWARE OF CREATING A LOTTERY!

You must be extremely careful not to create a lottery instead of a sweepstakes. Here's how to avoid that legal pitfall. The law defines a lottery as "a scheme where consideration is required for a prize that is dependent on chance". In other words, the combination of the three elements--prize, chance, and consideration--comprise a lottery. And privately run lotteries are very definitely not legal. For your promotion to be legal, one of these three elements--prize, chance, or consideration--must be eliminated.

Let's take a look at what might form a lottery:

1. Send in an order--that's consideration; a purchase was required
2. To enter a drawing--the element of chance
3. To win a car--the prize

Prize, chance and consideration are all present, so this offer would be a lottery--and against the law.

The current interpretation of the lottery law says that while consideration may not be required, it may be requested. With this in mind, we can reconstruct the offer to say:

1. Send in a order or print your name and the name of the product on a plain piece of paper
2. To enter a drawing
3. To win a car

Because consideration, requiring the entrant to make a purchase, has only been requested, but not required, we now have a sweepstakes, which is legal.

TYPES OF SWEEPSTAKES

There are two primary kinds of sweepstakes used by direct marketers: preselected and random draw. Each type has its advantages and disadvantages:

1. In a preselected "lucky number" sweepstakes, prizes are first awarded to persons returning entries that match preselected winning numbers. Unclaimed prizes are then awarded in "Second Chance" random drawings. A preselected sweepstakes permits you to state, "You May Already Be a Winner," a strong motivator to find out more. It also permits you to claim that every respondent has two chances to win because of the "Second Chance" drawings. Bear in mind, however, that individualizing entry forms and scanning for winners can increase costs. Because of the need to provide individualized entries, preselected sweepstakes are not practical in mass media. However, for direct mailers, the preselected sweepstakes is a very feasible and popular route.
   
   
2. A random draw sweepstakes is one in which winners are selected on a random basis from all entries received. A random draw sweepstakes is administratively easier to control and, therefore, less expensive to execute. It lends itself to sponsors who use TV, radio, and magazines as their primary advertising vehicles. However, it does not allow the use of the eye-catching copy points: "You may already be a winner", and "You have two chances to win".

Our experience shows that both types of sweepstakes can be successful. The decision as to which type to use should be based on logistic and cost considerations measured against potential response.

PLANNING A SWEEPSTAKES

Once you've decided on which type of sweepstakes to run, there are a few basic steps to follow:

1. Decide on a theme. You'll want to relate it somehow to your advertising theme but you also need something that implies luck, that sounds exciting, that sounds like fun. Old standbys such as "Race for Riches" or "Go for Gold" may sound hokey, but they work over and over again.
   
   
2. Prepare a strong prize structure. The two secrets here are an exciting Grand Prize and a lot of runner-up prizes. Prizes should relate to the theme, to your audience, and to your budget. For example, if a trip is the prize, for a tennis magazine, it might be expressed as a trip to Wimbledon. For a more general magazine, it might simply be a trip to London. For a program aimed at teens, it might be shown as a trip to a rock concert in Liverpool. As for the low-end prize, it's the chance to win something that really matters. It doesn't have to be a big prize, but there has to be a reasonable chance of winning. That means lots of prizes. By the way, you don't need to spend a lot of money on prizes. Often it's not the value of the prize that makes the difference; it's the chance to be a winner.
   
   
3. Arrive at the mechanics and keep them simple. Too complicated a set of requirements can inhibit response. It scares the potential respondent off. And remember, for direct mailers, an important mechanicism is the "Yes/No" box on the entry form. Besides complying with the lottery laws, the "Yes/No" boxes also help overcome the inertia that can put off a purchase decision.
   
   
4. Comply with legal requirements. A good set of official rules is key here. Rules serve two purposes:
   
   
1. They advise participants about timing, eligibility, how winners are determined, and any restrictions imposed.
2. They incorporate all the appropriate disclaimers and required statements needed to fully protect yourself against future complications.
   
   
Don't let any of this scare you off. Just as the fact that there are traffic laws doesn't keep you from buying a car, the fact that there are laws governing sweepstakes shouldn't keep you from running them. Sweepstakes regulations are complicated, but if handled properly, they are completely manageable.


5. Save money. Some companies, particularly smaller ones, lack the resources to fund a high-value sweepstakes on their own. Larger companies may want to test a sweepstakes before making a major financial commitment. The solution is a co-op sweepstakes in which costs are shared among several unrelated companies. For example, Ventura offers one program with over $100,000 worth of prizes, yet each participating sponsor pays only $9,999. (For more information, see Doc. 6045, Co-op Sweepstakes.)

DISPELLING NEGATIVE STEREOTYPES

Sweepstakes can be an effective tool for the direct marketer. Don't be deterred by any of the following negative attitudes:

"We use advertising, not promotion, to sell our product." Think of it this way: If Magazine A has a cover price of $2.50 and features articles on make-up, fashion, and hairstyles, and Magazine B has a $2.50 cover price and offers comparable articles PLUS the chance to win an expense-paid dream vacation, which offer do you think the consumer will find most attractive? The presence of the sweepstakes becomes an added product attribute.

"A sweepstakes isn't really consistent with our image; our audience is too upscale." That part is up to you and the manner in which the sweepstakes is presented. Consider that American Express, New York magazine, Doubleday Book Club, and the Franklin Mint are all very upscale marketers, and all are regular users of sweepstakes.

"The result can't be measured." Consider this: Test-conscious marketers like Time Warner, Fingerhut, and Readers Digest all devote major portions of their marketing budget to promotion devices, including sweepstakes. They do it because they found it works. For you as direct marketers, the ability to test results is simply measuring against a control. You'll find that with a sweepstakes overlay, response levels can increase by as much as 50%-100%.

Information for this article was provided by Ventura Associates, a New York City promotion and marketing agency specializing in sweepstakes design and administration.