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.
Have a sales strategy or helpful hint you'd like to share? Send your "30-second sales seminar" to email@example.com, and see your suggestion featured here!