How to Create High Performing Sweepstakes for Lead-Gen Efforts

OK, I know what you’re thinking … viable leads typically don’t come from sweepstakes and contests. And when not done correctly, that’s exactly right. However, just as any online direct response tactic, this one is no different. Over the years, sweepstakes marketing has become refined through testing and targeting. And since the boom in social media, sweepstakes are more popular than ever. But before you embark on this tactic, there are a few core concepts to know—as well as best practices.

OK, I know what you’re thinking … viable leads typically don’t come from sweepstakes and contests.

And when not done correctly, that’s exactly right.

However, just as any online direct response tactic, this one is no different. Over the years, sweepstakes marketing has become refined through testing and targeting. And since the boom in social media, sweepstakes are more popular than ever.

But before you embark on this tactic, there are a few core concepts to know—as well as best practices.

The Precursors

It’s important to get to know your list to help determine its value and how much you are willing to give away for a lead, such as:

  • What is your average conversion time (how long does it take someone to move from a lead to a buyer—30, 60, 90-plus days?)
  • What is the lifetime value (LTV) per buyer?
  • What is your average revenue per name?
  • What is your average cost per lead (CPL)?

Conversion Time. Monitor a group of new names (perhaps by campaign) who come on your file and see at what point, at what percent and for what dollar amount your leads convert to buyers. This will help you know how much and how long it takes a lead to convert. Let’s say you have a pay-per-click campaign and, in the first 30 days, 20 percent of the leads convert and the average unit sale is $50. This shows you your time threshold for getting a sale. You’ll know when to anticipate revenues and can manage your budget accordingly.

LTV. You take the total your buyers purchased: Let’s say over five years, this group collectively spent $100,000, and divide that amount by number of buyers (let’s say its 500). Your LTV is $200. This will show you the potential long-term opportunity for a buyer’s worth, as well as the loss (if the customer leaves your list).

Rev Per Name. This is more for the current buyers on your file not long term, as with LTV. Take the total your buyers spend at 30, 60 and 90 days; and at each time point, divide that amount by the number of buyers. So let’s say at 30 days, your newest names bring in collectively $10,000 and there are 1,000 buyers. That is a $10/rev per name. This will show you current buyer worth and your threshold for acquisition costs.

Cost Per Lead. When you’re doing an acquisition effort, how much does it cost you per name? Take the cost of the media buy and divide by the number of leads that came in. This will tell you how much you typically spend to bring in a new name. Ideally, you want to keep you cost per lead much lower than your revenue per name and LTV. I like to hover between $5 and $25 CPL. CPLs will be different by channel. However, if you bring in a lead at $50 and you know, based on your list performance, that name will spend $75 in the first 6 months, you can afford to take an initial loss.

The Offer

What are you going to give away? The value of the giveaway should be something that won’t be viewed as too good to be true by users as well, as one you can earn back (based on the aforementioned list criteria and in a certain time period). So knowing your giveaway threshold is important.

In addition to being realistic and appealing, the offer should also be relevant and interesting to your target prospect.

I’ve seen random sweepstakes offers on the Web, as I’m sure you have. One in particular, a publishing company, featured an offer: “Win a free iPad.”

This makes zero sense to me in so many ways …

Unless this publishing company is uploading an app on the iPad with a free online subscription to one of their publications, I don’t see the relevance for the end-user. This publisher will likely wind up with thousands of leads, but they will be unqualified, irrelevant people looking for a free electronic device and not in the other information products they offer.

Plus there’s an out-of-pocket cost for the product and shipping of the product.

This, in my opinion, is typical of the “old” sweepstakes offers where little strategy and direct response knowledge seemed to go into planning the campaign.

However, one website I discovered in my research for this article seems to hit the nail on the head and offer something synergistic to their leads, as well as qualifies the lead for future potential sales via cross-sell and upsell efforts.

Take skin care company, Dermagist. Their sweepstakes offer is for lead generation, touts a “$200 shopping spree,” and is featured on their website and Facebook page. The tactics they are using can be applied to most any industry.

Leads have to “register” by liking Dermagist’s Facebook page, as well as post on Dermagists’ Facebook page why they love the product. Winners are chosen monthly and given a promo code worth $200 toward anything in their store. No purchase is necessary.

What I Like …

The offer is ongoing, so it’s a continuity of new leads (email addresses) coming in on a monthly basis to help build the list and offset any attrition.

The prize is realistic, targeted and qualifies the recipient based on relevant interest—it’s appealing to those interested in skincare products and is a great way to get repeat and referral sales.

Leads have to “register” by liking Dermagist Facebook page, as well as post on their Facebook wall why they love the product. This strategy helps with social media engagement (boosting page “likes,” visibility and credibility), as well as product awareness.

I also liked that on the website’s sweepstakes registration page, last month’s winner’s name was posted. This helps reinforce contest legitimacy.

Location, Location, Location

Where you promote your sweepstakes is equally important for targeting and relevance.

There’s the obvious, such as having a banner ad, header content or interstitial on the website’s home page mentioning the promotion.

You can also promote it on your business’ Facebook page organically (through fan page timeline and wall posts), through apps, as well as through targeted ads and boosted posts, selecting audiences in the Newsfeed that are like-minded with your target customer.

Tabsite has a variety of Facebook-friendly apps for contests and sweepstakes (photos, trivia and more).

A word of caution: If you are promoting a sweepstakes on Facebook, make sure to follow its guidelines or your campaign may run the risk of getting shut down.

Promoting it organically with search engine marketing is another tactic, such as with free online press releases.

And, of course, if your budget allows, you can promote your sweepstakes through targeted media buys (banner ads, email list rental) and pay-per-click. These costs should be factored into the overall campaign effort and cost per lead.

So when you start thinking about your acquisition efforts and how sweepstakes may be used, know that through the evolution of the consumer and Internet marketing in general, this is not your father’s sweepstakes anymore.

Being a creative and strategic marketer will help you take this strategy to a whole new, high-performing level.

How to Create Win-Back Emails That Actually Win Customers Back

Effective win-back programs are the simplest way to increase revenue and profitability. Once the acquisition costs have been reclaimed, retained customers are the most profitable segment in a company’s database. I often wonder why every business doesn’t have an aggressive campaign in place

Creating and implementing effective win-back programs is the simplest way to increase revenue and profitability. Once the acquisition costs have been reclaimed, retained customers are the most profitable segment in a company’s database. I often wonder why every business doesn’t have an aggressive campaign in place.

The typical win-back program consists of an email or two that declares, “We want you back!” with no acknowledgement of the recipients’ buying history or relationship with the company. It’s as if the marketers think that changing the subject line and mentioning that the customers have been missed is enough to make people come running back.

Generic win-back emails come from B-to-C and B-to-B companies. The first example is from 1800PetSupplies. There are three mentions about wanting the customer to buy again. The first is in the subject line. It reads, “Psst! Come Back for 25% Off Your Entire Order.” The two other mentions are in the body. They are, “We Miss You! Come Back & Save 25% Off Your Entire Order!” and “We Miss You! Come Back & Save!” There is something missing from this email. While you are thinking about what it could be, let’s look at the second example.

Bloomberg BusinessWeek sent an email that looks like it might be designed to win subscribers back. The subject line reads, “Welcome Back Rate – Save 88%” but there is no other mention of wanting the recipient back in the email. The message is personalized with [insert name here] technology, but there is nothing about the subscriber’s history.

What Is Missing From Typical Win-back Campaigns?
People stop buying, subscribing or donating for a reason. Knowing why they left is the first step to getting them back. The typical win-back campaign is missing the personalization that entices people to come back. It’s very hard to convince customers that they were missed when you don’t recognize them.

Creating personalized emails designed to engage recipients’ requires detailed analytics and business rules that insure the right message is delivered. How much more effective would the 1800PetSupplies email be if it mentioned the recipient’s name and pets before noting that she was missed?

Information in an individual’s buying history can be used to create detailed emails designed to bring people back. Win-back campaigns that limit selection criteria to last purchase date can do more harm than good. Customers who leave because of service issues respond negatively to “we want you back” messages that don’t acknowledge the problem. The best win-back programs are designed to speak to individual needs. Here are some tips to get you started:

  • Start the win-back campaign as soon as the first order is fulfilled or donation is received. Customize the marketing message to include follow-up information from the first transaction. A soft win-back approach keeps people from leaving.
  • Separate people who have had issues from everyone else. Winning back an unhappy camper requires special care. The investment in TLC will pay off because people who have negative experiences resolved to their satisfaction are more loyal.
  • Build the program from the ground up. Adding some personalization to a generic campaign doesn’t deliver results like creating one designed to optimize reactivation. The better the foundation, the higher the return.
  • Develop a multi-level program. It is much easier to retain a satisfied customer with a recent transaction than one that has been dormant for months. It also costs less. Save the big incentives for the last resort.
  • Continuously test and improve. People are easily trained to wait for the best deal. Include activity patterns and seasonality in your segmentation so the big incentives aren’t offered when your customers are already scheduled to buy.