Can Freebies Lead to Loyal Customers?

Waynette Tubbs, Sr. Manager of Marketing Communications

Have you seen the commercials for the Publishers Clearing House sweepstakes and wondered whether the prize winners are loyal Publishers Clearing House customers or just sweepstakes junkies? There are probably some great research studies out there that could give us the answer. But instead of digging into that, let’s do a little anecdotal research by looking at how two Bronto customers have used giveaways to increase sales and foster repeat buyers.

The Element of Surprise

According to legend, the RINGREVEAL™ program by Diamond Candles was born out of love. In 2011, David Cayton bought a ring for his wife for their anniversary, and he wanted to find the perfect gift bag to complete the package. But his local grocery store didn’t have a bag that seemed right. On the way out of the store, he bought a candle to add to his gift because he knew she loved candles. According to their website, David had an epiphany as he was leaving the store. He, his wife Brenda and Justin Winter took their savings of $50,000 to start Diamond Candles and pair candles with rings for a surprise gift any woman would love.

Turning a great idea into a revenue-generating, repeatable campaign can be tough, but co-founder Justin Winter told Bronto Summit attendees about a few of the things they did that contributed to their success.

1. Give customers what they want.

The candles they sell are on par in size and price with the most popular brands. But every candle comes with something no other brand offers – each includes a ring valued somewhere between $10 and $5000.

2. Offer opportunities to share.

The customer buys a candle and lights it up, eagerly waiting for it to burn down and reveal the amazing prize. Diamond Candles took this private discovery and asked customers to make it public by recording the reveal and sharing their prize on social media.

3. Sweeten the deal.

To ensure repeat customers, Diamond Candles inserts a code in every candle that customers can enter online for a chance to win a second ring worth up to $5000. Customers who don’t win receive a dynamically generated discount code for their next purchase. What a great concept for improving customer retention! It increases post-purchase engagement and keeps the conversation going well beyond the conversion (sale).

4. Use customer and product data wisely.

Keeping a customer engaged, even if they aren’t winning big, can be tricky. The codes and rings are randomized at the manufacturer, so there’s no way to know what a customer will get during the reveal. But there are several data points Diamond Candles can use to encourage repeat customers. For instance, they know the average time it takes to get to the ring in the candle. That data informs the timing of the personalized reorder email they send. And they use the customer’s open, click and purchase data to present the optimal discount amount to encourage reorders. The new, data-driven strategy reduced the average number of days to reorder from 21 days to 7.

The Power of a Giveaway

At first glance, the product line at Sideshow Collectibles looks like an easy one to sell: They specialize in licensed and original collectibles. Think Star Wars, Marvel, DC Comics and G.I. Joe. When asked if prize giveaways are successful at increasing sales, Sideshow’s Director of Ecommerce Chris Pirotta would give a resounding “yes!”

“The total cost of our entire contest giveaway program is about $130,000, and we bring in $10 million. That’s a 76:1 return. Who wants a 76:1 return?” he asked during his Bronto Summit presentation, “Give it Away, Give it Away, Give it Away Now.”

Pirotta offered tips for making giveaways successful for other types of retailers, too – even those with products that aren’t as high-profile as a life-size Boba Fett figure.

1. Expand your audience.

It’s no longer enough to just put your products out on your social media channels and hope people will see it. Sideshow uses a combination of paid search campaigns, paid advertising on social and email campaigns to spread the word about their giveaways. They are also agile. Pirotta says they have processes in place that allow them to put together a giveaway campaign within an hour. “If we see something trending on Facebook this morning and we have a product that would resonate there, we put together a campaign to capitalize on it,” he explained.

2. Create a top-notch user experience.

When people reach your site via social, which tends to have a great user interface, you have to make sure your site is slick and clean. It must be responsive. Every button and link has to work as the visitor expects it to, and you have to have beautiful graphics. You also need to provide clear calls to action and give the visitor plenty of options to share. Finally, he says to make sure the imagery is very similar across the entire experience, from social to web to email.

3. Take the first step in building a relationship.

One of your main objectives is gathering data you can use to continue the relationship. You’re asking the visitor to enter personal information, and that requires a certain degree of trust. Create as few barriers to conversion as possible. For instance, take as little customer information as you possibly can. Do you need age, gender and phone number? Or will name, address and email suffice? Clearly outline the terms and conditions to enter. Validate the email address in real time. And let the entrant know how many steps still need to be completed.

4. Communicate like a pro.

Set up an automated email that goes out immediately after the entry is complete. Include specifics of the current giveaway and any next steps the entrant will need to take. Send periodic emails to build excitement as the contest nears the final hours. And when the contest is over, send an email announcing the winner and thanking all of the entrants for participating.

This series of emails provide the perfect opportunity to sell the original product and cross-sell related products. You should also invite the disappointed entrants to subscribe to your emails and follow you on social. “Don’t be lazy, though,” Pirotta cautioned. “You may not have the resources to create new graphics for each email, but you can write unique, interesting copy for each message.”

5. Don’t just gather data. Use it!

Tag everyone who enters a contest, using assumptions about the entrant. For instance, if someone enters a contest for a life-size Boba Fett statue, Pirotta and his team can assume the entrant is interested in Star Wars, science fiction, the classic trilogy and life-size products. “You have to use that data to your advantage – everywhere,” he says. Use it to inform your social advertising. Use it to segment and personalize your emails.

Real Results

These brands offer clear evidence that sweepstakes can in fact be profitable. Diamond Candles shortened their time to reorder from 21 days to 7 days. What would that mean for your sales? And Sideshow Collectibles saw a 76% return on their contest giveaway budget of $130,000. Who wouldn’t love to see a 76:1 ROI?

Their tactics are very similar and can be replicated across a broad array of product lines. Just imagine what you could do with these ideas! Acquiring new subscribers, engaging with your customers, building your brand reputation and boosting sales. Let’s face it. These days, giveaways aren’t just for sweepstakes junkies. If done right, they can be a retailer’s dream come true.