How to use gifts, prizes and sweepstakes in your marketing

The U.S. News and World Report marketers had a formula that was used for many years. Prospective subs would receive a double postcard offering some very attractive business premium (like a desk calculator, back in the day when they were special) as a bonus for a paid subscription. It must have worked because it was repeated so long. The benefit of requiring an upfront payment helps cash flow. But it ultimately does not foster a loyal subscriber base and both the pub and this advertising concept are pretty moribund these days.

The U.S. News example demonstrates both the appeal and the danger of using product giveaways to help you get customers. A certain number of people will always pop just for the gift… and the more attractive the gift, the more questionable the quality of these freeloaders to your business. What you’re hoping is that enough otherwise qualified folks who were on the fence say “sure, why not” because they like the premium and these folks also like what they see when they receive your publication, product or service. To make this work, the giveaways needs to be closely aligned with the interests of the person who matches your core prospect. Everybody would like to win an all-expenses paid trip to Disneyland, for example, so that is not a qualifying offer. Today’s popular iPad is much better. It’s trendy, techy and business focused… all of which match the profile of certain types of readers.

The next question is what you’re going to make people do to get the gift. U.S. News requiring payment is a good example since traditionally pubs have very poor pay up from their “free issue” promos. Keep in mind that in addition to the cost of the goods you’re going to have the expense and administrative headache of fulfilling them. Most marketers farm this job out to a fulfillment shop that will ship in anonymous boxes. This is expensive and misses an opportunity to do additional marketing inside the fulfillment package.

If asked by a client, I will always recommend a sweepstakes where one person, or a few people, win as opposed to a gift for everyone who responds. The greed appeal is still there but the cost is much lower since there are only a few units to buy. Companies worry about sweepstakes liability and if this is a serious issue for you, there are companies that will write the rules, choose the winner and indemnify you for a flat sum, most recently $25,000. If you’re on a shoestring budget, I would advise you to study a number of competitive sweepstakes in your market space, download the rules (which the marketers are legally required to publish) then create your own contest structure based on what others have done before (or pass the buck and have your lawyer do it).

A final consideration is that the giveaway should not overshadow the product or service you are selling. There are two ways this can happen. The giveway can become the most exciting and prominent thing about the promo, with sales playing second fiddle. This was the case with the notorious Publishers Clearinghouse sweepstakes. Magazine subscriptions were an afterthought and the subscribers gained this way were of such questionable quality that “sweeps sold” mailing lists often were rentable at a substantial discount.

More insidious is the situation when a premium is so unusual or complicated that substantial real estate is required to present it. This is the case with many brilliant ideas that clients come up with, for oddball items they happen to love or their kid has told them about. The ink required to describe these items is parasitically siphoning attention from your main selling proposition and can only hurt your results. As a rule of thumb, if it takes more than a few sentences to describe what it is and why you want it, then it isn’t a good premium.

Whenever I go to direct marketing trade shows I look up the booths of Konik and Co. and other sellers of premiums and “advertising specialties” (the latter being something that has your logo prominently printed on it, such as a baseball hat). I ask them what’s new and what is selling best and they always have a few idea starters for me. I also get lazy and look at what marketers of products similar to my clients’ are offering. Right now it’s iPads so might as well copy them. You can never get too many chances to be a winner, right?