Tuesday, September 20, 2011

9 Sweepstakes and Contest Promotion Mistakes Your Business Must Avoid

We all know sweepstakes and promotions are a great way for companies to attract new customers and gain brand name recognition. However, if you screw up your promotion by making these 9 mistakes, your business could suffer both financial damages and public humiliation. Be sure to avoid the following 9 mistakes before launching your promotion:

Mistake 1 - A Misleading Set of Rules

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Your promotion must have a clear set of rules for participants. Official rules are considered an enforceable contract between sponsors and participants. If your rules are misleading, you face potential legal action from participants who are supposed to be happy customers.

Mistake 2 - Not Sticking to the Rule

What good are a solid set of official rules if your business decides to change them after launch? Once drafted, your rules must stay the same or your business could face serious issues with both regulators and consumers.

Mistake 3 - Unintentionally Creating a Sweepstakes

If your promotion is something like a "First 100 to Respond" or a "First to 50" it will be considered a sweepstakes. Is this your intention? If it is, make sure it has a comprehensive set of rules. If not, specific disclosures and registration in certain states is necessary. Make sure you know if your promotion is set up like a contest or a sweepstakes.

Mistake 4 - Your Contest Is Not Based on "Skill"

If your promotion is a contest, then it must be based on "skill" or the winner must be able to determine the outcome. In others words, it cannot be based on chance. A promotion where the winner is chosen by the sponsor is not based on skill and therefore would be considered a sweepstakes.

Mistake 5 - Your Sweepstakes Involves Consideration

An illegal lottery consists of the 3 elements of a prize, chance, and consideration. In order for a promotion to be based on chance, consideration must be removed from the equation. This is as simple as offering a zero cost based alternative of entry to the purchase method. This is tricky so you need to get this right.

Mistake 6 - Your Wireless Promotion Is Considered an Illegal Lottery

Any time your promotion participants are involved in texting or receiving texts, your promotion faces the chance of being deemed an illegal lottery. Why? It is due to the relative nominal cost of sending and receiving regular text messages. Your promotion should have an alternative entry method, either online or offline.

Mistake 7 - You Allow Consumer Created Content
Allowing your customers (consumers) to create content can mean a whole heap of trouble. First, you have no control of what consumers do with or say about your products unless you have a screening process before allowing them to post content. Second, you may not be able to control the integrity of the submissions. How do you know the content is original and does not break copyright infringement laws? Make sure you really have some solid control mechanisms in place so you avoid this costly mistake.

Mistake 8 - Your Employees are Poorly Trained

Whether it is someone who answers the phone or a seasoned store manager, you are at the mercy of your employees. Make sure your employees are well versed in the rules, know how to access the rules, or know where to send your participants for the correct information.

Mistake 9 - Your Winner Is Not Happy

Picking or declaring a winner should be the easy and fun part. What happens if it all goes horribly wrong? What if you mistakenly name a winner before the promotion is over or you name the wrong winner? These are important mistakes to avoid because they can turn an exciting publicity opportunity in to a horrible public relations nightmare.

9 Sweepstakes and Contest Promotion Mistakes Your Business Must Avoid

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