What To Expect From Starting An Online Competition Business
Here are the things you should expect from the competitions industry:
1. A Steadily Growing Community
One of the best parts about running a competition site is that it’s a wonderful opportunity to create a community around something that you care about.
That’s why we tell prospective clients to spend time thinking about the sorts of prizes they want to offer. If it’s something you care about (fast cars, nice makeup, impressive gadgets), then you’ll be able to advertise it well, but you’ll also be better-placed to begin crafting a community.
And competitions are all about community. Community builds trust, because newbies can see that others already love what you’re doing. That means they know they’re in a safe space which is important in an industry that has a little bit of mistrust around it.
Community also means retention.
Retention is when past customers stick around, and develop loyalty with your brand. That’s a steady source of income for your business, right there.
You’ll notice that, when you create things like Facebook Groups or newsletters for your followers, people will start chatting about your brand and your prizes. You can join in; in fact, it’s recommended that you respond to comments, good and bad.
So long as you give people a reason to follow your community, running loyalty programmes and refer-a-friend competitions, for example, and drumming up hype about each and every prize draw, you’ve got a really nice corner of the internet, carved out just for you.
2. A Learning Phase
But, it doesn’t happen overnight.
There’s a period that we in the marketing world call, ‘The Learning Phase’.
This is the period of time while your ad platforms of choice catch up with who you are, who your audience is, and the best way to target them. It’s because things work via algorithms these days.
The algorithm is great, but it’s not magic. It has to learn about everything, and it does this by testing a few things. So, it’ll try out your content on audiences and segments to see who responds best. It’ll also pop your ads in different places on the platform, to see which areas (and which times of day) are most optimal.
But we think the Learning Phase applies to more than just your algorithms. You’re learning too—and so are we, because we’ve never interacted with your brand, specifically, before. Rest assured, we’ll get there, but it’s good to expect a period of time where we all get to know each other.
3. Hard Work and Graft
The competition industry is increasingly saturated. Everybody wants a bit of it, because, when it works, it can be so rewarding.
What that does mean, however, is that starting up a new competition business now requires a lot of work, and a very specific game plan.
Competition businesses that do well in this day and age spend a lot of time and money focusing on really good, meaningful prizes that will grab people’s attention.
They also spend a lot of time thinking about customer retention, because having a loyal fanbase is easier, and more cost-effective, than acquiring new, uncertain customers.
What we’re saying is it’s a lot of fun once it takes off. But it is by no means easy.
4. A Distinctive Brand Presence
The main thing we look to help you build is a personality for your brand, which people recognise at a glance. That’s the key to good marketing, because people like what they recognise, and they’re more likely to buy when they’re on familiar territory.
What can you expect from the process of building your identity? A few things:
Think about your goals, and your niche
What will help your business stand out from the crowd? How will your competition business compete?
Setting out some clear goals at the very start of your journey will help you to find your specific niche. It answers the question of what makes your brand tick, and why people should enter your competitions, specifically.
Create and Perfect A Consistent Posting Schedule
It’s important to follow a regular posting schedule to stay consistently visible. As part of the Learning Phase, we’ll all take time to understand when your followers are most active. Then, we’ll create a schedule that fits them.
Think About Your Brand’s Voice and Appearance
It’s always good to have a specific style. That comes down to what you do, and how you talk about it.
Spend some time thinking about your voice; the turns of phrase your brand uses, the particular vibe of your copy. Then, pair this voice with brand colours and logos, which you use across all your marketing materials.
It’s like creating a little character for your brand. Then, people instantly know what to expect.
Respond to Queries and Suggestions
The main thing you want people to associate with your brand is trustworthiness.
You create a sense of trust by communicating openly with people. Whether their responses are positive or negative, you separate your brand from less trustworthy ones by taking the time to reply to them (in your brand’s chosen voice!).
People don’t mind mistakes—it happens, especially in the early stages. They just like you to own up, and do everything you can to put it right.
Think about it: if you were a scam site, would you take the time to communicate with your victims? Probably not. That’s why communication shows people you’re legit, and honest, and fair.
5. Time Spent Budgeting
It’s not all marketing and communication.
Behind the scenes a lot of work goes into sustaining all those processes, buying and shipping prizes, designing and developing your website, and employing people to help you.
As a new business, you should have a clear budget set out for yourself: costs you’ll incur and profits you hope to make. It may develop as you learn about your business, but having a budget set out holds you accountable, so you don’t run out of money before you’ve even got going.
Your website will be the heart of your business.
It’s the way a business introduces themselves to potential customers. It’s like your face; it becomes your identity.
So, expect to take some time designing and crafting your site, using all your key brand-identifying features (fonts, word choice, images).
Think long and hard about the features that you want to offer your customers. A variety of competitions is best—from regular Instant Wins, to big Prize Draws, variety is the spice of life and will keep your players interested.
Make sure your website is tested. It should be easy to follow and understand. For example, if people don’t know what a button does, or where it is, they’re going to get frustrated. That makes them less likely to stick around.
7. Legal Compliance Requirements
The competition industry is a bit different to other online businesses for a number of reasons. First and foremost amongst these is the importance of legality.
Many competitions fall under the definition of ‘gambling’, which cannot be publicised so freely on social media. As such, it’s important to read up on the 2005 Gambling Act, so that you know where you stand and you can avoid uncomfortable situations.
There are also ways of avoiding the ‘gambling’ classification, if that’s what you want—and it makes publicity a little bit easier! At Zap, we help clients to create competitions classed instead as ‘Real Money Gaming’.
‘Real Money Gaming’ involves including an element of skill, and/or a viable option for free entry. That way, you can run Real Money Games that aren’t gambling.
The best thing to do, if you’re really new to competitions, is to contact an expert about legality.
What NOT To Expect
1. Overnight Millionaire Vibes
We talked about the Learning Period, and that applies to income too. It takes around 6-7 months to start seeing real profit for your brand, and that waiting period requires patience, and strategy.
We’re not being negative, but we are being realistic. Your competition business could one day be really popular, and create profits you never dreamed of. But it won’t happen immediately, and it won’t happen easily.
You’ll need to be smart, and enjoy the process, trusting that you will get where you need to be in the end.
2. Free Money
Similarly, you shouldn’t expect that your competition business will be a source of free money. There really is no such thing.
In this world, you’ve got to spend money to make money. After all, you’ll need to spend money when you buy prizes to offer, and you’ll need to invest in marketing and showcasing those prizes. Ad campaigns cost money, and so does web development.
That’s why budgeting is so important.
It all comes down to Return on Investment (ROI), rather than whether you can avoid spending money, entirely. (You can’t!)
3. Immediate Trust
So, we’ve talked about how trust is crucial for competition businesses, but it’s important to manage that expectation a little. You won’t IMMEDIATELY have trust.
You’ll need to curate it over time.
That’s because trust-building involves showcasing customer reviews and creating social proof, something which takes a while to gain. You need to have had customers, in order to have reviews.
This is another reason it can take things a while to get going. However, once they do, it’ll be worth it. We know it will.
It’ll also take individuals a bit of time to realise they can trust you. What we mean by that is that newbies who come along aren’t going to spill £100 straight away. They’re more likely to take it slow, spend a fiver here and there on some little competitions and see what happens.
It’s only with time that they’ll start to stake out the big bucks. That’s why targeting retention and a clear, visual social media presence is so important. You want people to stick around: that’s where the money is.
