Tag Archives: Creative Development

Contests and Sweepstakes Work!

Contests and Sweepstakes Work!

Marla Altberg, President of Ventura Associates in New York City, dropped by our office the other day. It was a pleasure to see her and I couldn’t pass up the opportunity to pick her brain about the current state of Contests and Sweepstakes.

First of all, old fashioned as they are, contests and sweepstakes still work. In fact, they work better than ever. People pay attention to them because of the opportunity to win something for nothing. And marketers love them because they’re such great involvement devices.

She told me about some of her clients who had doubled or even tripled their Facebook “likes” and Twitter followers just by adding an inexpensive contest.

Inexpensive? Yes, indeed. I am amazed at how few marketers know they can launch an impressive contest or sweepstakes for not a lot of money. Best of all, it’s very little work because Marla’s people at Ventura Associates handle everything: hosting, creative development, social media platform, state bonds, winner selection, administration, and prizes. They’re especially good at getting all the rules and regulations right.

Results, results, results.

An apparel company, Bare Necessities, doubled their fan base with a top prize of $1,000 a month! Marla says that’s not at all unusual. You can make a significant impact with a budget as low as $10,000.

Just about any company can sponsor a contest. As a practical matter, it makes no difference that people can enter without buying anything. For instance, one of Marla’s bank clients recently had a sweepstakes you could enter by opening an account or just mailing in a free entry form. A lot of accounts got opened anyway.

Utility companies are getting into sweepstakes in order to promote conservation.

If you like, Marla’s people can come up with the core idea based on a client’s objectives, or work with an agency.

I asked her what companies want to achieve with sweepstakes promotions: more prospects, engage customers? She said “Sweepstakes can address all kinds of objectives: awareness, reinforcing product benefits, sell a product directly, generate store traffic, generate online traffic, build an email database.

We talked for a couple of hours and I’d love to give you a transcript here, because we wrote it all down. But the details don’t really belong in a blog like this. Who has time? Best to talk to Marla directly. She’s very pleasant to work with.

I did ask her, in closing, what was the funniest contest she’d ever handled.

It involved an elderly man from Maysville, Ohio, who’d won over a million dollars. But he refused to sign the release because he didn’t want to give out his Social Security number. He’d seen the local sheriff on TV warning against that.

Marla had to call the sheriff and ask him to drive over to the man’s home and tell him it was ok to do it. Then the old man turned down a fabulous trip to New York City: limo, dinner, fancy hotel, Broadway show, etc. He preferred a simple party in Maysville, at the Ramada with macaroni, potato salad and ham sandwiches.

You can call Marla Altberg at (212) 302-8277 or email her at maltberg@sweepspros.com

The extremely useful DM Math tool

The extremely useful DM Math tool

It’s called the breakeven “allowable and it’s handy for all kinds of things in our business.

For a brand new program we use the allowable to tell us if we have a viable business or not. That can save a lot of money up front.

When we’re considering something new for an existing program, the allowable tells us exactly how much of a lift we need from the new element.

We refer to it almost every day and we fine tune it, rework it and generally use it as our guide, our north star. We even use it to help set prices for products and services.

On one level, the marketing allowable tells you how much you can spend on marketing efforts to get one sale and break even.

The formula is deceptively simple: R-C=A, which means Revenue – Costs (not counting marketing costs) = Marketing Allowable. That means how much money you can spend in marketing to generate one order.

The reason for focusing on one sale is pretty obvious: everything is a multiple of one.

Costs” means the cost to you to deliver one order of your product or service (and “freebie” if applicable), handle the order taking, order processing, shipping, response management, customer service, complaints, bad debt, returns and so on.

Revenue” refers to all the money customers pay you, including shipping and handling charges, when they buy your product or service.

If your costs are $11.50 to deliver and service one order and your revenue is $23.50, then you can afford to spend $12 in marketing to get one order.

If you can afford a marketing budget of $100,000,(excluding onetime costs such as research, planning and creative development) then you must get $100,000/$12 = 8,334 orders.

You then look at media costs. Let’s use print as an example. (These numbers have nothing to do with reality. They’re just for demonstration.) Assume that an ad of reasonable size costs $20/M. You can “buy” a circulation of 500,000 with your $100,000. You need 8,334 orders. That’s 1.67%, too high for print so you look for alternatives, applying the Breakeven Allowable whenever you consider costs and reach.

After a while, using the Allowable becomes almost automatic. Which it should be.