Competitions and Brand Loyalty

January 1, 2009 by admin  
Filed under Ask Prizetastic

If you are a business owner, or perhaps just as a consumer, you may wonder what effect, if any that competitions and sweepstakes have on brand loyalty? Do consumers change brands just for the sake of entering a competition? Do consumers try new products because of a competition? Do they stick with products after a competition finishes?

Now, don’t get me wrong, I don’t have actual statistics, because this data would be very brand and product specific, but from my past few years in the “comping” environment, and even talking to friends, family and colleagues I can say with 100% certainty that for most product purchases, people are more than willing to brand hop if there’s a worthwhile prize on offer.

There are several reasons for this…. One of which is economic and monetary: People like the idea of getting something for nothing. With current financial uncertainty worldwide, many families are struggling so the thought of winning cash, holidays or other luxury’s is enticing to say the least!!

Another reason will always be that people will change brands for competitions because they were never brand loyal anyway. Many people brand hop based on price anyway, so throw an extra incentive and chance to win into the mix and many people will choose to swap brands.

Then of course there’s people who comp as a hobby and can spot the word “WIN” at the other end of the supermarket, that one is just a no brainer.

Do people stay with a brand they’ve chosen even after a competition? Of course just like any other consumer choice that one’s variable. It often depends on the product. For instance there are products such as soups, sauces and other food items that seem to have regular competitions. In that case, it may be harder to retain customers who see little difference between sauce brands, but it is often harder to switch a customer from a brand of coffee or alcohol for example and then continue to retain their loyalty.

For companies that are willing to invest the time into running a competition with worthwhile prizes, well structured rules, and a fun and easy entry process, there is definitely a benefit to them… For consumers, it’s great to know that brands out there care enough to try and offer some reward or “chance” at a reward for trying their product, and it’s even better to become a winner.

I won a major prize for a deodorant competition, and to this day that is still the deodorant I use, and will probably continue to do so, it helps that it was a great product, but that winning feeling made the brand stick in my mind forever :)

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