Contests as Ecommerce Marketing Tools

Contests have always been a popular marketing tool, right from the days of clipping and mailing in entry forms to online contesting, where people find thousands of legit contests to enter on any given day. But is an online contest right for your ecommerce site?

When it comes to running an online contest, Ben Pickering, CEO of Strutta, a company that allows organizations of all sizes to create dynamic contest campaigns, says that it's important to define your marketing objectives before launching a contest.

“It can be a great tool for user engagement,” he said, “but at the same time you have to plan, market and promote your contest for it to be successful.”

Contests and Small Business Marketing Objectives

Before you can plan a contest, you have to set your marketing objectives and goals. If, for example, your goal is to increase your email subscriber list, then a basic online contest entry form asking people to submit their details and click a box to join your mailing list would suffice.

The Strutta platform lets anyone create dynamic contests for community-building and to meet other ecommerce marketing objectives.
(Click for larger image).

You can also consider a marketing contest designed to build a community and to increase user engagement. For example you might allow customers to post user-generated content (UGC) such as a video or photo, and have community members vote for their favorite submission.

Sometimes an online contest can promote a special feature or product-line launch. Using Crate and Barrel as an example, Pickering said the company is running a large contest that encourages newly married or soon-to-be married couples to create a gift registry on the site.  “This type of marketing objective”, he added, “is designed to collect relevant marketing data that translates directly into sales.”

Legal Issues to Consider

Legal issues surrounding contests can be the tricky part that prevents many smaller, ecommerce businesses from using contests as an Internet marketing tool. Not only do government rules and regulations governing contests vary from state-to-state, they also vary from country-to-country.

Pickering says that because there is no clear mandate, most companies play it safe and exclude entry by anyone who resides where there could possibly be an issue.

Another legal issue to consider is if your contest is a sweepstakes, where winning is like a lottery with winners picked by chance. For example, choosing a random email address as a winner would be “chance,” where a judged photo contest would not be considered chance. There are also different regulations to follow when your contest prize is valued at more than $5, 000.

Most small businesses could easily run a contest that offered a smaller prize, excluded residents in states where there may be a problem, and ensured that winners were not chosen by chance. Pickering said that you should assess the options and be sure to consult a lawyer on any gray areas.

“Check with lawyers in your area and find one with a decent hourly advice rate. The last thing a small merchant needs,“ he said, “is to be fined or sued over a contest.  Paying a lawyer for an hour to ask questions is worth it.”

The Strutta Contest Platform

Since contests are so hugely popular in North America, it was not surprising to find a number of do-it-yourself (DIY) contest platforms, like the one offered by Strutta.  The idea behind using a platform is that the service offers a step-by-step wizard to build your contest Web site, and that the service's rules and regulations cover the ecommerce business offering the contest.

 The Strutta platform is designed to run user-generated content contests for community building at an affordable price. These types of contents have always been popular, but due to the costs associated with bandwidth, traffic and hosting space, only larger corporations with large marketing budgets would offer these types of popular contests.

Using Strutta you can offer a basic-plan contest for photo or video contest entries where winners are selected by community votes and a final judge. Or you can offer a process of elimination before a judge picks a winner. The basic platform, at $499 provides everything you need to build your contest site.

Larger companies that want more flexibility can use the $2,400 Pro Plan that includes options to run the contest longer, offers Facebook widgets and social features and allows contest entrants to post “vote for me” messages to further drive traffic.  Strutta also offers a free trial version that lets you run a contest and pay only if you opt to download customer data. The cost is 25 cents per lead downloaded.

While Pickering says that a well-run contest can be an important part of an overall marketing strategy, not every company needs a contest. That, he said, depends entirely on your campaign objectives.

Vangie Beal is a veteran online seller and frequent contributor to ECommerce-Guide.com. She is also managing editor of Webopedia.com. You can tweet with her online @AuroraGG.

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