The Truth About Contests

Often times you'll see the tip "run a contest to get more sales!", and general tips on how to do it, but there's some facts you should know before holding your own.

I've seen countless "sign up to our newsletter and be entered into our monthly contest" and see them submitted to various contest sites. Have you ever ran a contest like this? If you have you know that it will probably bring you several hundred new subscribers. Sounds like a great idea right? Wrong. While you may have hundreds of new subscribers, you have very little that are interested in buying anything from you. What you have is a list of people that are looking to WIN something, and want something for free. That's why they are on these lists you submitted your contest to - because they hope they will win free products and not have to pay for any of it. You on the other hand want BUYERS, not freebie seekers. Not to say there is something wrong with being a freebie seeker (I think we all love to get free items, and are always on the look out for deals like this!), but they are not your target market.

While contests can be a good thing and DO build your list, understand the conversion rate for a freebie seeker list is very, very low compared to one that is made up of current customers and people honestly interested in your product. While these aren't exact numbers and you will need to run your own test, it may take 1,000 subscribers on a freebie list to gain one extra sale while a list of 100 targeted subscribers may produce 2-3 sales. Quite a difference right?

Recently I ran a contest with my freebie seeker list. I offered a free product to the name drawn from those who suggested scents for candles. This list had produced little sales in the past, but as soon as I offered something free - they responded. Out of 800 subscribers, there were over 30 entries. One person was selected as the winner, and the rest were contacted personally (twice actually) to be give a coupon, plus state their scent chosen was available. Over 30 people were contacted personally, and told their recommended product was available. This experiment produced zero sales. Yes this is correct - zero. It was a fact - these people didn't want to BUY, they wanted to WIN.

So if in the future you are thinking of running a contest for your business, attract only those that want to buy even if it's in the future. Here are some recommended contests to attract only buyers:

- Questionnaire
Something such as "why you would like to buy and why". This can also be used to help determine what your target market is looking for, and what you could do differently to increase sales.

- Purchase to Win
All purchases made in the month are entered to win. You could get creative with this idea, and state higher purchased amounts get more entries. For example, $1-10 spent = 1 entry, $11-20 spent = 2 entries.

- Gift Registry
Have them fill out their gift registry with your site, complete with a list of friends and relatives that would buy your products FOR them. This costs them nothing, they are still getting their products for free, and you are making the sale. You could also give everyone they mark down the chance to win as well.

There are many other ideas that can be used with a current list or to gain new customers. Just be sure that any type of contest you are involved in does bring you buyers!

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Anita DeFrank & Kara Kelso, authors of Direct Sales Success, specialize in coaching direct sales representatives to reach their goal of becoming successful in their field. Visit http://www.DirectSalesHelpers.com for free weekly tips.