Setting up a competition website can be exciting. It’s such a booming industry. You don’t need a considerable investment to get started, and it can be managed by just one person, so there’s no need to rely on anyone.
Many people create competition businesses because they think they’ll make money quickly. If you’re one of them, let us pop your bubble real quick. Competition businesses with these kinds of expectations tend to fail.
Yes, starting a competition business has great potential. However, for your business to succeed, you must first understand what goes into running one.
That’s what we’re here for — hi! This guide will run you through some top tips on starting a competition business. By the end of it, you’ll have the recipe for your business’s success.
An online competition business offers customers the opportunity to win prizes (of all sorts!) in exchange for entering competitions.
Ticket sales are the primary source of revenue for a competition business. That’s why your prizes should be appealing to your target audience. 😎
A prize draw involves choosing a winner at random from a pool of entrants. Contestants enter their details, put their name into an imagined hat, and wait to see whose ticket number has been drawn.
It’s based on chance. No puzzles or skill tests, just pure luck.
If it’s a paid prize draw in the UK, there must be a free way to enter. This usually means sending your entry using an ordinary post (i.e. ordinary first-class or second-class post, no special deliveries). It’s why prize draws aren’t classified as a lottery.
So, yes, free prize draws are also a thing. They’re not different from prize draws, besides the fact that they’re free to enter.
There are, however, two types of free draws:
Free entries must be promoted at the same level as paid prize draws, and anyone who’s participating must be able to see that there’s a free option to enter.
While hosting a giveaway means giving away something for free, you still receive something in return: engagement. It can happen in many ways — likes, shares, or follows. No skills needed here, either!
Receiving a great prize for not that much effort is quite the bargain, innit?
Indeed, the low effort aspect is what encourages people to participate, boosting your brand visibility (and following) in the process.
Quick test! What’s the difference between a ‘draw’ and a ‘competition’?
*Drum roll*
If you’ve answered: ‘prize draws are based on luck, whereas competitions are based on skill and effort,’ congrats! You’re right. Here’s (an imaginary) £500 cash prize.
See what we did there? You just participated in a prize competition, although in a normal prize competition, you’d be up against other people.
Prize competitions usually involve answering trivia questions, submitting creative works, testing specific skills, or completing tasks.
Several online competition businesses offer instant win games now, and it’s no surprise. They yield immediate results.
Instant wins require the player to perform a simple task, like purchasing a ticket. The participants receive a random ticket number and can check, within seconds, if their number matches a winning number in the prize list.
Instant Wins give your customers better odds of winning when they enter early, so sell them on the urgency. Incentivise them to buy tickets ASAP.
The Gambling Act requires you to obtain a license if your competition qualifies as a lottery, betting operation, or gaming activity. Failing to secure a license can result in fines, imprisonment, and potential damage to your brand’s reputation. That’s no fun.
However, skill competitions and free prize draws are not covered by the Gambling Act if they meet certain criteria:
The Committee of Advertising Practice (CAP) Code, administered by the Advertising Standards Authority (ASA), is the primary rulebook for marketing communications. All online competition businesses based in the UK need to understand this Code, particularly Section 8.
CAP’s principles include:
These are just a few examples. We recommend familiarising yourself with the full CAP Code before launching your online competition business.
Each social media platform has its own rules for running and promoting draws and competitions. Facebook and Instagram are among the stricter ones. They have a good few guidelines in place. Learning about them is a good place to start.
If you’re running a competition that involves collecting personal data from your players, you must follow GDPR and other data protection rules. You’ll need to be transparent about how you’re using, storing, erasing, and keeping that data safe. Also, remember to get consent from players before processing their personal information.
You don’t need a license for a free draw or prize competition. As long as your competition is set up to meet the requirements of the Gambling Act, you’re in the clear. If a free entry option is available alongside a paid one, or you ask your entrants to use their skills, your competition is perfectly legal. So, no need to worry about getting a license — yippieee!
However, there are some terms and conditions you’re going to need to follow.
When hosting a prize draw, advertise it according to the CAP Code. Ensure your competition includes clear terms and conditions, such as what prizes are up for grabs, when the draw closes, any entry restrictions, and how the winner will be chosen.
The draw should be impartial, and the winners should receive what was promised. Make sure all these details are laid out in your terms and conditions.
RMG — or Real Money Gambling — refers to any type of gambling that provides cash or prizes that can be exchanged for cash. This includes competitions and raffle businesses.
The RGM license lets you advertise your competition business on Meta platforms like Instagram and Facebook. With this license, you can keep growing your audience on Meta without worrying about getting banned or suspended.
Starting a competition business, you’re entering a competitive landscape (haha). To differentiate yourself from others, you’ll need to find your niche. Ensure that the niche still has a large enough market, though.
With a niche, your brand will focus on targeting a specific audience, which will make picking prizes much easier.
Running an online competition business will require you to be online, not just on social media, but also on the web. Your brand needs a website.
But for your website to be successful, it’s going to need a few things:
There’s a lot involved in creating the perfect website. If only there were a business that could help you with that, eh? Oh, wait.
At Zap, we’re web development wizards. Our magical powers will make your site so beautiful that it will outshine the rest. Contact us today.
To do this, you’ll first have to grow your mailing list. Once that’s done, you can start announcing your upcoming competitions via email newsletters or SMS. It’ll help keep your existing customers engaged.
Throw in a sweet little offer to remind them how special they are, every once in a while. A discount? A voucher? A free entry? Up to you!
Using paid ads is a great way to attract your target audience and increase your visibility. Paid ads can be found on different platforms, such as social media, search engines, or websites.
Though an obvious choice, social media is an important one. Businesses need social media nowadays. It’s an excellent tool for building a community around your brand, boosting brand visibility, and getting more people involved in your competitions.
Speaking of communities, let’s discuss why having one is essential for your success. It makes for a great business tool. You can regularly collect feedback and build hype ahead of a competition, but there’s more to it than that.
Your community members are part of your brand for a reason: they love it! And when people love something, they’ll talk about it.
Because your community members are so connected to your brand, they’ll have plenty to share with others, inadvertently promoting you. This organic word-of-mouth will increase your brand awareness and expand your reach.
Nurturing your community members makes them feel appreciated and included, which inspires loyalty to your brand. Fostering a sense of belonging within your community is an effective strategy for retaining customers and enhancing brand loyalty.
Having a community also helps you understand what your customers truly need and want. Use polls, start discussion threads, or host casual Q&A sessions to better understand their preferences.
And remember, you don’t always have to ask directly. Sometimes, just tuning into their conversations can give you some great insights — be a little fly on the wall!
There are several ways to optimise your online competition business.
Identify your key performance indicators (KPIs) and track their performance. They provide valuable insights into how well you’re progressing towards your objectives and will help you enhance your future strategies.
Collecting your own data is also helpful. Gather customer feedback through surveys, comments and direct messages — learn why some people engage with your brand, while others don’t. Look for patterns in customer behaviour.
Based on your findings, improve your strategies and promotion tactics. Always stay open and adapt your approach if necessary. The competition industry is constantly fluctuating, and it’s good to stay on top of it.
Did you know that you can automate your competition entries and winner selection?
Mhm, that’s right! You won’t have to worry about all that manual effort, and you’ll have more time to deal with other aspects of your business. Isn’t that lovely?
Automating these processes will also make entering your competitions easier and more accessible. This will encourage more people to enter, leading to a larger pool of potential winners. Fun! We love a bit of competition around here.
Automation also speeds up the winner selection. The winners don’t have to wait eagerly until you pick the winning number. An automatic and random ticketing system does it for you, saving you time and resources, and making the selection process unbiased.
Well done for starting your online competition business! There’s a lot that goes into it, isn’t there? Don’t worry. We’ve got some great news for you.
By partnering with us, we can take care of everything for you, from A to Zap. Not only will you have a fantastic-looking site and marketing strategy, but we’ll tailor everything to your needs and wants. How does that sound?
Tell us what you’d like to achieve. Contact us.
