The success of a contest or sweepstakes is heavily influenced by its prize pool. After all, it’s the prize that motivates customers to answer your questions, take a photo or share the promotion with a friend to enter.
That’s why prize strategy is a critical part of the overall development process. The prizes should fit your unique brand and audience as well as your budget and marketing goals.
One of the first questions to consider is whether your prizes should be digital, physical or both. Let’s look at the advantages and drawbacks of each:
Physical Prizes: Unique and Complex
A physical prize is considered anything that must be shipped. As you can imagine, the prize options are endless. You can award — and ship — everything from a prepaid debit card to furniture, electronics and vehicles. Because of the wide variety, audiences tend to be most excited about physical prizes. It’s also easier for brands to select a prize pool that resonates with their unique consumers.
The trade-off comes in the time and cost of prize fulfillment. While a sweepstakes fulfillment company will send prizes as quickly as possible, shipping can still takes several days — a contrast to the immediate delivery of digital prizes. This process will also raise the price for each prize, factoring in the cost of delivering items to the fulfillment management company along with warehousing, packing and finally shipping the items to winners.
One of our clients believes in the value of physical prizes so much that a recent promotion included printed coupons as low-tier prizes. Tens of thousands of winners were mailed the product coupons, which had a much higher likelihood of being redeemed in-store than a digital coupon that could end up in a spam folder or be quickly forgotten.
Digital Prizes: Fast and Limited
While physical prizes tend to generate more excitement, in our experience, digital prizes garner more entries. Often, this is simply because the pool of winners is larger: Without the shipping, handling and warehousing costs, brands are choosing to award more prizes.
Digital prizes are limited in scope — typically to gift cards or coupon codes — but can be swiftly awarded and delivered. They’re a natural fit for instant win games, where winners play online and are already expecting an immediate prize. Gift cards and coupon codes tend to appeal to a wide audience, which can be another strategic reason to plan a digital prize pool.
One drawback is that digital prizes distributed via email are more likely to get lost in the winner’s junk mail folder, potentially creating confusion or frustration. Brands should plan to follow up with winners to ensure they received and were able to download or access their prize. Winner communication is a key aspect of contest and sweepstakes prize fulfillment, and your prize fulfillment company should be able to provide a communication strategy tailored to digital prizes.
Strategically Layering Promotions and Prizes
Of course, many brands choose to maximize the benefits of physical and digital prizes by including them both in the prize mix. One of our favorite — and most popular — strategies is to layer an instant win game with a grand prize sweepstakes.
Brands garner deep and repeat engagement through the instant win game, which allows every player to earn sweepstakes entries and a chance to win a digital prize. Users can return to play in each time period to earn additional entries and prizes.
After the instant win game is closed, the sweepstakes winners are selected to award the grand prize(s) — typically a high-value physical prize such as a dream vacation. With this strategy, brands are leveraging the unique benefits of each prize category — successfully generating excitement, appealing to a wide audience, minimizing shipping costs and maximizing entries. With a contest and sweepstakes management company like Realtime Media, the design, execution, legal administration and prize fulfillment of both promotions can be seamlessly integrated.
From t-shirts to trucks, there’s no limit to the types of prizes that can be awarded and delivered to customers. There’s also no universal prize that will be the right fit for every brand and every audience. Instead, your strategic prize mix should be determined based on your unique audience and strategic goals for the promotion. You can even let the audience do the deciding with a personalized prize strategy that results in powerful brand data.