When people are getting started in the business of using sweepstakes promotions they frequently misunderstand one of the most critical principles of this business. What are you selling? If your answer is “Sweepstakes Entries”, you are wrong–dangerously wrong. Do not pass go, do not collect $200.
This common misunderstanding goes against the very definition of sweepstakes. A sweepstakes is used as a marketing tool to promote a product. No true sweepstakes will allow a customer to buy sweepstakes entries. If it does allow this, the sweepstakes sponsor can expect serious legal trouble sooner or later because it is not really a sweepstakes; it is GAMBLING.
The sweepstakes sponsor sells something else, a PRODUCT, and uses sweepstakes to encourage sales of that product. Let’s look at Coca-Cola. When you buy a bottle of Coke and find a number on the bottom of the cap, you can enter that number into an online sweepstakes form to determine whether or not you have won. The product, in this case, is Coke. Coca-Cola did NOT sell you a sweepstakes entry for $1.25. They sold you about 1 cent worth of carbonated water, sugar, and flavoring and 19 cents worth of packaging and shipping for $1.25 (this is a bottle of Coke). In order to encourage you to buy their product instead of a competing product they used a sweepstakes promotion. This marketing tool is designed to entice customers to buy the product, but the product is never, EVER, the sweepstakes entry.
So let’s ask that question again. What are you selling?
Our Internet kiosks, as the name implies, sell Internet access and the use of a touch-screen computer terminal. Thus, when a customer buys $10 worth of Internet time he will receive a number of free entries into the promotional sweepstakes. In the case of the sweepstakes promotion running on our Internet kiosks, the PRODUCT (Internet access) is being sold and the SWEEPSTAKES ENTRIES are being given out for free. The difference is subtle but critical.
It is fundamentally important that you as a sweepstakes sponsor and all of your employees understand this. More than one Internet cafe has landed in hot water because an undertrained or lazy employee told a customer (who happened to be an undercover law enforcement officer) that they were selling sweepstakes entries instead of selling some other product and then getting the sweepstakes entries for free. Don’t make this mistake and don’t let your employees make it.
The line between PRODUCT and PROMOTION blurs when we’re selling an intangible product such as Internet access time. In every case the product must be kept separate from the promotion. Specifically, if you sell Internet time and then give away sweepstakes entries to people who purchase that Internet time, using the Internet time cannot consume the sweepstakes entries. Alternatively, using the sweepstakes entries should not get rid of the time you have purchased to access the Internet. The Product and the Sweepstakes Promotion must always be kept separate.
For clarification and simplification, let’s bring this back to a model that uses a tangible product. When you buy a Quarter Pounder with Cheese at McDonald’s and get a Monopoly sweepstakes game token, eating the burger will not make your Monopoly sweepstakes game piece disappear. And revealing (or redeeming) that game piece will not make your hamburger disappear. Furthermore, if your Monopoly sweepstakes entry (which you have not yet revealed) is a $1 million grand prize, the value of that prize will not (and should not) decrease as you eat your burger. The same rules apply to any product that is promoted by a sweepstakes, whether it be cheeseburgers, Internet time, or anything else.
Sweepstakes are a fantastic marketing tool. As you begin to promote your products with sweepstakes, you must understand exactly what you’re selling. Sweepstakes Promotion is a marketing tool used to help increase sales of that product. You are selling a PRODUCT, which will NEVER be “sweepstakes entries”. Good luck with your product sales, good luck with your sweepstakes promotions, and feel free to contact us if you have any questions.