Why Companies Hold Competitions and Sweepstakes?

October 9, 2008 by admin  
Filed under Competition Talk

Sometimes it’s obvious, sometimes not so much…. but have you ever wondered why companies hold competitions, contests or sweepstakes?

Of course the most obvious answer is to get exposure. In the online world it’s common knowledge that creating “buzz” and making things go “viral” are important in establishing both brand awareness and loyalty. It’s exactly the same for companies big and small.

Even if you aren’t like me, who enters almost anything and everything I can, I am sure at some point inĀ  your life you’ve entered a competition or sweepstake that was driven by “buzz”. Think about your favourite soft drink brand, shopping centre or television program. Chances are, you’ve jumped in on entering something that offered a prize that seemed irresistable.

Competitions and Sweepstakes work! (If they are done correctly but I’ll write about that another day).

Companies hold them because they want you to try their product. They hope you’ll fall in love with their product and stay converted. They hope you’ll tell your friends and family about the amazing potential prize they have on offer, and they hope you’ll spend lots of money on their product in order to win. Truth is, most of these wishes will be fulfilled.

I won a $10000 prize from a deodorant company, and unless there is another competition on deodorant, I still buy that brand religiously. It helps that it’s good and it works, but had I not won a prize (especially such a big one, that loyalty wouldn’t exist).

There’s so much to discuss about the business side of competitions that I am going to start a new blog category, but the important thing is to remember is that -

Companies hold competitions for viral buzz, brand exposure and increased sales

Competitions only work really well if they are held and conducted properly, if a competition appears to be dodgy, unfair or misleading it can have a negative effect for the brand.

Competitions build brand, consumer excitement and most importantly are always a “good news story” when someone wins a prize.

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