"I'm Worried About Listing A Big Prize And Then Having No Customers To Support It"
You’ll need a foundation of customers to invest in big prizes. Cars and holidays can feel like a bit of a risk, especially at first. But you’re not alone in feeling this way. Lots of new businesses worry they’ll offer a prize they can’t deliver on.
But there are some measures you can take to ensure this doesn’t happen.
Closing Date By Entries, Not Timing
You have control over your competition’s rules and parameters. When you establish these, think about the future. If you’re worried, it can help to state a minimum number of ticket sales before the prize is released. The competition will close when that metric is filled, rather than on a specific date.
For example, imagine you list a car worth £50,000 and sell only £10,000 worth of tickets. The prize could instead be a cash equivalent or a lower-value car. People still get a prize for their efforts, but you don’t have to maintain something that isn’t going to work.
You’ll need to have a refund procedure or an alternative prize in place. Be transparent about this from the start. This will cover you in the event the threshold is not met. You’re well prepared for all eventualities.
Start Small, Scale Up
Another option if you’re a bit nervous: start with smaller, in-demand prizes. Tech/gadgets, vouchers, and cash all tend to go down well.
This will help you to build a good reputation. You’ll establish a bank of social proof and trustworthiness. This bank encourages custom in the future, when you do list those bigger prizes. It also hones a sense of community around your brand, getting you on your feet.
Community is where loyal audiences come from. Take the time to get to know your people. Who are they? What prizes do they want? Establish the competitions they’re more likely to get involved in. Research the times of the day they’re most likely to spend money. Once you know this, you can optimise the chances of your bigger prizes flying high.
Run Split-The-Pot Model Competitions
With ‘split-the-pot,’ the prize grows with every ticket sold. Every ticket purchased at a certain price adds to the overall prize you could win. The more people who buy, the bigger the maximum potential prize is.
At the end of the competition, the winner takes away half the total pot. The rest of the funds go towards your business and future competitions.
This method incentivises people to enter the competition. Every ticket they buy gets them closer to a chance of winning and a chance of winning more for their money. It’s an investment.
Be Communicative
Look, we know things don’t always go as expected, especially when you’re starting out. But that doesn’t have to be the end of the world.
If you’re clear, transparent, and communicative from the off, you’ll be okay! In your rules and requirements, set out alternative prizes, and when these will be used. For example, you might offer an alternative prize if entry quotas aren’t met.
If you state this, you’ve covered all bases, but you can still have a go at those bigger prizes. Go, you!
“I’m Worried About Legality And Compliance”
Ah, all the jargon. Never fear, that’s what we’re here for.
The main thing you need to know is that there’s a difference between competitions and lotteries. The UK regulates lotteries very carefully. That’s because it’s considered gambling. When it comes to this field, understandably, there are rules in place to protect people.
Competition businesses like yours don’t want to be misclassified as a lottery when they’re not. But that’s easy enough. To avoid misclassification, you must ensure that your competition either:
- Requires entrants to take part on the basis of merit/skills (e.g. a best photo competition). These entry requirements prevent it from being a game of chance or, in other words, a lottery.
OR…
- Has at least one option to enter for free, so that people have the choice. They can get involved, but they don’t absolutely HAVE to spend money to do so.
Beyond that, it’s about making sure you have an Real Money Gaming (RMG) License, and keeping things transparent and fair.
“I’m Just Not Sure How To Get Started”
No, totally! New stuff is hard; we get you. Here’s a small, step-by-step guide.
- First, conceptualise the goal of your raffle. What’s the prize? What’s the deal? Why should people get involved? What do you get out of it, too?
- Next, secure the required permissions and licences from the Gambling Commission.
- Choose a reliable online platform to handle ticket sales, draws, and data management. The platform should do this securely and in accordance with GDPR standards. (Pst… did you know Zap can help with that?)
- Finally, establish your Terms and Conditions, rules and requirements. Write these out clearly as part of the competition page. Include eligibility criteria, prize descriptions, draw dates, and anything else customers should know. Once established, these are final; i.e. if you state the closing date, you must close the competition on that date. No chopping and changing.
“I’m Worried About Not Reaching An Audience”
How can you be sure that people will even get involved once you’ve gone to all the work of listing prizes?
This is a big concern for a lot of new businesses, but there are so many ways of working through it. Starting out as a business is a two-way street. You’ve got to work on the functions—your prizes, your finances, your purpose. But you can’t neglect the community around your brand. That’s where marketing comes in.
And that’s where we can help…
Fun fact: this article is one of MANY, designed to specifically answer your questions (Yes! You, personally.)
If you found this helpful, you might enjoy our KnowledgeBase. We’ve been beavering away at a bank of articles to help you get started. We’ve covered budgeting, marketing, socials, and prize management. It’s good stuff, even if we do say so ourselves.
And, if you found it REALLY helpful, consider dropping us a message. There’s plenty more where that came from, and we could even have a little chat about it. Really set your mind at rest.
Remember: you’ve got this! But it’s always nice to work with a team, isn’t it?
