Everybody loves competitons. Prize Draws, Tie breakers, Lotteries. They get people excited, they’re challenging and above all, they’re fun.
A competition adds a little spice to a person’s day. Even though the chances of winning are slight, it still provides a little hope and joy. So hold a competition from time to time, enjoy yourself and promote the business at the same time.
There are some very good reasons for holding a competition or prize draw.
- It creates interest in the business. Customers will often tell others about it.
- It gets people involved. By taking part they feel slightly closer to your business.
- It spreads the message. By including questions about your business you are educating customers about the services you offer and reinforcing your key messages about quality and values.
- It’s a data gathering tool. You can use the opportunity to ask customers if they would like to be added your mailing list for future promotions and information.
BUT IS IT LEGAL?
Competitions are a murky area of the law in the UK. Most competitons are covered by the Lotteries and Amusements Act 1976. This makes a clear distinction between a ‘lottery’ which is ‘the distribution of prizes by lot or chance where entry is secured by the payment of a stake’, a ‘prize draw’ where there is ‘a clear and genuinely free entry route’, and a ‘competition’ which must involve a ‘substantial degree of the exercise of skill’. Prize Draws and Competitions are fine if conducted properly. Lotteries, on the other hand, are highly regulated (which means illegal for you and I).
For most competitions there are no rules on registration or management, although everyone I have ever consulted on the subject recommends seeking legal advice (which means that I too must also recommend the same to you). However, here are some simple guidelines:
COMPETITIONS – A MEMORABLE EXPERIENCE
A competition is a challenge, much more fun than a simple draw and gives you the chance to make people think about your business. It can be as simple as a multiple choice question or as complicated as a crossword, word puzzle or even a task that has to be completed on your premises. Whatever you choose, make sure that it is safe and relatively easy to understand. If your customer can’t immediately see what has to be done, or feels intimidated in any way, they won’t want to participate, no matter how big the prize.
PRIZE DRAW – QUICK AND EASY
Equally, any competition where the answer is so obvious that even the cat could answer, may well be deemed a ‘draw’ rather than a competition. The rules for prize draws are slightly different – it must be free to enter and open to everyone. ‘Free to enter’ is generally accepted to mean ‘reasonable costs’ like making a phone call or posting an entry. It doesn’t mean a £15 phone call to 0898 123456 or spending £250 to get the appropriate number of coupons. Sneakier promoters will make it look like you must make a purchase to secure entry, but you will find some form of free entry mechanism buried somewhere in the small print. Once again, if you plan to follow this strategy – take legal advice.
If you want to make it easy for people, hold a prize draw. You’ll be surpised how many people are willing to give you their name, address, email address and inside leg measurement, if there’s a chance of a prize! And once you have their permission, you can then send them further news or offers about your business. A good first mailing might say ‘Sorry but you haven’t won the prize in our recent draw. However, we’d love to offer you…’
And with social media platforms such as Facebook, running a draw is even simpler. Just create a post inviting followers to enter by posting a comment, liking and sharing your post.
JUST FOR FUN
Competitions and prize draws are not there to make money. Use them to promote the business, but don’t be greedy. If you venture into the world of premium telephone lines and ‘purchase-necessary’ promotions you are treading the fine line between what counts as a competition and a lottery. In fact, any situation where someone ‘pays’ for a ‘chance’ to win, whether by phoning a premium rate service, buying such and such or simply purchasing a ticket could be deemed as a lottery and, in my opinion, is best avoided.
IT’S ALL ABOUT WINNING
Holding a competition doesn’t have to cost the earth. Simple prizes like free treatments, upgrades or gift vouchers are more than enough to encourage people to take part, and although there are several benefits, the most important outcome should be that your business stands out from your competitors. So maybe it’s right to say that creating a little competition from time to time will actually make you more competitive and help beat your local competition?
Now I’m confused…