Sweepstakes remain popular with both consumers and brands. Consumers get the chance to win something, while brands get to collect valuable customer data or generate more leads and loyalty. What’s not to like, right?
Unlike other ways to distribute incentive rewards, sweepstakes do have some drawbacks. For starters, they deliver incentives to only a few of the people — selected at random — who complete the desired task. (Everyone who submits a survey, for example, is entered to win a relatively large prize, such as $300 or an iPad, and only one or two names are chosen.)
In addition, doing sweepstakes as incentive rewards does not garner the same results as instant rewards.
To compare the two incentive types, market research community e-Rewards sent the same survey to 8,000 people, but half were incentivized with entry into a drawing for $2,500, and the other half were offered $2 in cash. The study results, which were cited in the book People, Preferences and Prices, showed that within a week, the individual rewards sample had a response rate of 19.3%, compared with 12.2% for the sweepstakes group.
READ MORE: The Average Survey Response Rate and How to Beat It
Given the lower effectiveness, are there still circumstances when a sweepstakes is the right strategy for your incentive rewards program? To help you make an informed decision, here are some pros and cons.
At the end of the day, the only real advantage of sweepstakes is that they allow for tight control on a budget with a hard limit.
While sweepstakes can be less expensive than instant rewards, since they involve only one or a few rewards, the bigger cost for using them is the time and risk involved.
A sweepstakes structure for your incentive rewards, while cost effective, requires a much heavier lift by your team. And while you may not spend as much money, you will spend more time. Sweepstakes contests can take months to set up, since they require you to deal with a number of legal issues and manual processes.
Consider that:
Even if you agree that the immediate digital delivery, automation options, and delightful recipient experience of instant rewards are better than a sweepstakes, the budget can be a roadblock. But there are ways to make instant rewards more affordable by:
No matter how you decide to implement more affordable incentive rewards, you want every dollar to go toward increasing your response rates and participation.
Losing an average of 15% of your budget to unclaimed rewards can make a big difference. By using a platform that automatically issues 100% refunds on all unclaimed incentives, like BHN Rewards, you can be sure that your money is going toward improving your marketing, research, or survey results.
Have a research or marketing program that requires ongoing engagement? See how using points-to-rewards can help you stay within your budget and automate the process!
BHN Rewards puts the power of digital rewards to work for marketers, researchers, and HR managers. Don't forget to check out all the great content in our Resources section!
BHN Rewards puts the power of digital rewards to work for marketers, researchers, and HR managers. Don't forget to check out all the great content in our Resources section!
