Drawing in Dollars: Using Sales Contests as Carrots

Sell more products and improve collections by making it a game

Phil Sasso is the president of Sasso Marketing (www.sassomarketing.com), a technical marketing agency specializing in tools and equipment. Subscribe to his free marketing tips at philsasso.com./blog. I’ve heard contests can increase customer involvement and sales. How do I organize a contest? You can use a contest to get customers to come out to your truck, to buy more stuff and even to be consistent about making their weekly payment. Technically a “contest” is judged on a skill or...

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I’ve heard contests can increase customer involvement and sales. How do I organize a contest?

You can use a contest to get customers to come out to your truck, to buy more stuff and even to be consistent about making their weekly payment.

Technically a “contest” is judged on a skill or talent — like American Idol or Dancing with the Stars. So, unless you’re asking customers to Salsa, or something, what we’re actually talking about is a “drawing.” The reason it matters is a legal one. You can charge someone to enter a contest. A drawing must be “no purchase necessary,” or it becomes an illegal lottery. (I’m a marketer, not a lawyer, and situations vary. So, ask your attorney or DM about the local laws and such on this.)

To sidestep legal issues, give everyone coming out to your truck an entry form. Then, give customers an extra entry for making a purchase and another entry slip for making a payment. (In the McDonald’s Monopoly game, for example, you get more game pieces for buying more.)

Drawings are a fun way to train your customers to be better customers. The more a client is rewarded for doing what you want, the more likely he is to keep doing what you want him to do, such as buying new stuff or paying on time. Like training a horse, there are two ways to get customers to follow your lead: a “stick,” such as punishing him for missing a payment, or a “carrot” like rewarding him for being consistent on his weekly payments.

A one-time drawing can be fun and engaging. But a weekly or monthly drawing can be more effective. An ongoing drawing can create customer loyalty as customers choose to buy from you over the competition to get more entries in your drawing. A rewards program is another good way to create more loyal customers. I’ll cover that in a future column.

Here’s a quick outline of how to run a series of ongoing drawings:

Set A Schedule

Some dealers like weekly drawings. That’s fine, but I think a monthly drawing is better. You can afford to give away a bigger prize monthly than weekly. When given the choice between a smaller prize with better odds and a bigger prize with lesser odds, more customers will be drawn to the bigger reward.

It’s also obviously less work because you only have to come up with a prize every 30 days.

Choose a prize

There are many prize sources. You could ask your flag, WD or supplier to pitch in a free product, or you could ask to buy one at a deep discount. You could give away branded jackets, shirts or hats. Or you could give away a gift certificate for certain items on your truck like “Good for $50 toward any socket set or crow’s feet. May not be redeemed for cash.” By determining what they can spend the gift certificate on, you can direct them toward certain items you want to promote and/or items that have higher margins and cost you less to give away.

Prizes like gift cards for local stores or restaurants or iPods are nice, but will likely cost you much more. You’re the tool guy. Make your prizes tool-related! Think creatively. It’s also a good idea to change up your prizes every month to keep the contest interesting. Some dealers sweeten the pot during historically slow sales months with bigger prizes. That can work. But during a period like the winter holidays, discount pricing and value-added deals can work better. My take is to give away bigger prizes during your biggest sales months. That’s because it can help you sway sales away from the competition when customers are spending money – and you’ll likely have more money to spend on the prize.

Set the deadline

Consistency is key to running a successful monthly contest. It’s best to set the deadline so you draw your winning entry around the last business day of each month. Make sure everyone knows the deadline. That’s not too hard for everyone to remember a monthly contest deadline since for example the June contest will end June 29 or 30.

Create an entry form and rules

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