Zap
Starting a competition business is the first step in a very exciting journey.
It’s a community, a source of income, and a creative outlet. What’s not to love?
But, of course, there are some things to bear in mind when you get started.
The first thing to know is the legal requirements.
Legality should be the main consideration of any business, but especially competition businesses. There’s a bit of mistrust around this industry and its associations with gambling.
Understanding the legal requirements placed on your competition business is the first step to both keeping your customers safe AND showing them that you can be trusted.
(It should be noted that, as a UK based competition website development company, this article applies to UK law. Just sayin’)
Though there are many areas in which they find common ground, prize competitions are—or can be—different to gambling.
If you run a gambling site, you’ll need certain licenses in place. That means that, when you start a competition business, it’s important to make one distinction:
Gambling is defined by an element of chance or luck, on which your players stake their money. It includes casino-style games (slots, roulette, and poker), as well as lotteries, betting, and speculation.
With gambling, there’s a chance that NO ONE who enters will win. That’s how much chance plays a factor.
Some Prize Draw Competitions can be classed as gambling. But, if you include an element of skill, or an option for free entry, you give players a choice, which makes a difference. In many such instances, you don’t need a gambling license.
There are a few licenses you need to be aware of, regardless of whether your new competition site is classed as gambling.
The first is an RMG Licence. If your games involve real money in any capacity, you need a Real Money Gaming (RMG) Licence to post adverts about it on Meta.
You will also need to be registered with the Gambling Commission, but only if your games REQUIRE paid entry, do not have an element of skill, and/or are based largely on chance.
We’re not here to be harbingers of doom, but failing to have these in place can lead to your ads being taken down or shadow-banned in the best case scenario. Worst case is that your entire business gets taken down!
Let’s just say, it’s worth doing your research.
You should know what your business is about.
There are a few types of Prize Draw competition sites you can start.
You can incorporate an element of skill, for example. Players might have to answer a quiz question at the ‘add-to-basket’ stage. If there is no free-entry option, this should be a genuine piece of trivia, that needs some skill to answer. The winner is then selected based on their ability to answer the question right, and their name is drawn from THAT crowd.
Or, they might have to send in a photograph, and you’ll select the winner based on the merit of these pics.
In any case, their skill determines their right to the prize.
The other option is Random Prize Draws. These work like a virtual raffle and include Instant Wins and Prize Draws. No skill is required, and everyone must have an equal chance of winning.
PSA: it’s important that it actually IS random. That’s why we’ve created a random ticket generator system, which works off Google’s algorithms to keep it fair.
The other important part of starting a competition business is to have a particular image and theme.
Your niche determines the types of prizes you list, and the vibes of your competitions. It also makes you recognisable at a glance, which is Marketing Rule Number 1.
You’ll also need to set out your Prize Structure early doors. That just means:
You should know how to build a reputation online.
As we said, a lot of competition businesses face issues of mistrust, where people get the wrong end of the stick. This is easily fixable, though; you’ve just gotta prove to them that you’re worth their time. Here’s how…
Your website is often people’s first, or most formalised point of contact with your brand. First impressions count, people!
Common advice dictates that scam-sites don’t put time and effort into a pretty website. That means that slow-loading images, poor quality, bad grammar, and strange vibes are going to ring alarm bells.
You know what doesn’t ring alarm bells? Being honest! Running a gambling site is all good, as long as you tell people that’s what it is, so they can make informed decisions. Making mistakes is fine, so long as you own up to them and communicate with customers to fix them.
But your site also determines your branding. It introduces people to that niche and prize structure we mentioned before. Having a strongly developed and designed site makes all the difference to how people see you.
Put Social Proof on your site. That’s the stuff that encourages people to invest, by showing them the great time that others have had with your competition site.
We’re talking testimonials, reviews, and partnerships, where people can see them. These signs of trust will inspire newbies.
For competition businesses, photos of past winners can be particularly inspiring because they help people to visualise what it might be like to be the winner, themselves. That’s always inspiring.
The main piece of knowledge we can pass on to newly-started competition businesses?
There’s no business without an audience.
And how do you grow an audience?
Marketing!
There are a few types of marketing to be aware of and they all target different groups in different ways.
Make use of the internet. It’s a big place with a big pool of potential customers if you play your cards right.
There are two types of advertising you can do. The first is organic: the stuff you don’t pay for. Your Social Media accounts can be a great example of organic media. You don’t have to pay for most of the features on social media such as livestreams and general uploads.
On the flip side, you have paid advertisements. These can include your Google and Meta Ads, PPC and are the things that you pay to post (or boost!).
Paid media and organic media work together. You use organic stuff to begin to understand your target audience, so your paid ads can be posted more efficiently, saving you money.
A really popular form of paid advertising is creating influencer partnerships. It acts as another form of social proof, but it uses familiar faces. It’s important you choose influencers who are on brand with your niche, and will matter to your audience. Then you sponsor them to talk about your competitions, getting your name out there.
The main goal of marketing is to build a community around your brand. People who keep coming back for more, so that you have a firm foundation for your business, but also people who’ll talk about their experience, and help you acquire newbies.
Once you have a community, you want to retain them. One way to do that is by building an email list. That way, you can cut through all the noise of the modern world, and send messages directly to potential customers’ inboxes. Newsletters, competition updates, discounts and incentives to stick around. It all adds up.
That’s the final thing you need to know when starting a competition business? The plan of action.
It’s all well and good listing big, impressive prizes, but can you actually deliver them?
The first thing to do here is to think about budgets. Buying the prize is step one, obviously, but you have to think about whether you can make that money back (with a little bit more—profit!) through the ticket sales.
Then you should think about how you’ll sort postage. It might require a whole separate team, or maybe just one individual who you’ll pay to wrap the prizes, and think about the most efficient way to send them across the country to the winners.
Finally, you have to think about how you’ll communicate with customers.
A curious bunch. They’re bound to have questions and, as we’ve discussed, being able to answer them is all part of your transparency as a brand.
So, have you set up a forum for questions? That can be social media, for example, or a ‘contact us’ form on your site. Whatever it is, make sure you respond promptly, politely, and comprehensively.
Sometimes it won’t be positive. That’s ok. It’s very normal. But if customers have complaints or want refunds, you’ll have to be willing to communicate this through with them.
Make sure you have a refund policy set up in the early days and that it’s in a visible place on your site. That way, you have something to fall back on if you disagree with your customer’s claim. Keep documented evidence of the prize on the day you posted it, and of transactions between you and the customer.
But, don’t argue with them for the sake of it. If they’re right, you’ll just have to take the hit or risk ruining your good reputation.
Business growth is both a good thing, and a difficult hill to navigate, so it’s good to know about it before you start, and plan ahead. Successful competition businesses are highly scalable.
Their website interface can adapt to high traffic, for example.
If you’re concerned about any of the knowledge we’ve bestowed today, then you’ve come to the right place.
Zap’s competition sites are highly scalable and, dare we say, really impressive. We can also help you with your marketing. Plus, we have a particular competition-focus, so you’ll never feel like you have to explain yourselves to us.
We measure our success by our clients’. Their competitions are highly competitive. Yours could be too!
Get in touch with us to find out more.
