How using big prizes can ruin your prospect list

If you saw a contest online where you could win a luxury trip to Hawaii for 10 days – all expenses paid, all you had to do was leaving your name, address and other contact info and agree to receive information from some company, would you do it? Even if the product the company sold was something you never would by – and I mean never?

The odds are you would enter anyway and a vital reason is the size of the prize.

Companies have used different kind of prizes to grow their potential client list for centuries, many successfully . There are more than enough academic papers proving the link between the stimuli of a reward and the response (could be getting more people on your email list).

But is the true goal having a big list? Many marketers believe so, or at least believed it was so. With a big list you would always have some recipients that would be interesting in what you had to offer and since most of these lists was based on the fact that you would send the same newsletter to the whole group.

Today this is no longer relevant. More and more email marketing to day is not based on mass communication, but rather different messages to different prospect in you email list – based on knowledge about what the user wants. The keyword being segmentation.

Now the quality of the list is the most important. The more non qualified entries the more difficult it is to do good segmentations. And the more work you have to do to eliminate those who just signed up for the possibility of winning something.

I tweeted about Breitling last week and their prize where you could win a private pilots licence. The prize is for the winner of the “Spirit of Aviation” photography contest, promoted through their Facebook page.
This contest is probably not a very bad example of using prizes, although the prize has a pretty big value. The reason is that there is a clear link between the prize and the message.

The worst examples are when you use a prize just to “motivate” people to sign up for your newsletter, email list and so on.
My business school learned this the hard way. We did – as did many of our competitors – offer prizes to get people to sign up for more information about our school. In one incident we ran a big online campaign to get people to sign up for more information and the no. 1 prize was a big laptop (this was some years ago so laptops was still a pretty expensive buy).

We got an enormous response on the campaign and more people than ever signed in. And since we let people sign up for just the contest of winning the laptop (without receiving any information from us) we thought that the quality of the list with the people that signed in and wanted information from us would be higher.

But we where proven wrong. When going through the list of those who sign up for getting more information we found that whole families had signed in. And we found quite a few people below the age of 6 and many above the age of 80 – all wanting to receive more information from a business school.

We did telephone interviews to find out more about why they had signed in to receive information from us and not only for the contest of winning the laptop. It turned out that, even though we had informed them when they where signing in that they didn’t need to receive information from us to join the contest for the laptop, they didn’t believe us. They thought that just signing on for the contest would weaken their chances on winning the computer.

We used weeks to call all who singed up to establish if they where merely signing up for the chance to win a computer or they really wanted to hear from us. It cost us lots of time and money before we had a list that was relevant to communicate with.

The lesson we learned was this:

  • Don’t use prizes – try getting people to sign up based on the relevance you can provide them – earn their trust with content marketing –  We eventually stopped using prizes and started telling people exactly what they can expect from us when signing up
  • If you do use prizes – use small ones. It doesn’t have to be a big prize to get people to register. If they are interested they might do it anyway and the bigger the prize more “garbage” you will get in your list.
  • Use prizes that are relevant to what you offer. It can be your product or some add on to your product. Before we stopped using prizes we did try with some other prizes that worked pretty well. Like book checks that could be used in the campus book store.

There is not one set of rules that apply to all. Breitlinger in the luxury segments can utilize prizes in other ways than a FMCG company would.

There are parallels between this and the race for more followers, likes and friends in Social Medias. Having a big group of followers does not necessarily increase your influence.

An example here is the case of Audi who is perceived to very good at generating engagement at their Facebook site, but an important reason is that the users are “forced” to like them before they can view the content.

This entry was posted in Marketing and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s