Gamified promotions vs. lotteries

Nowadays, the challenge of meeting expectations in the digital age and increasing price sensibility due to stiff competition leads to a pressure in almost every industry. If one speaks about sales promotions, there are value-increasing promotions that manipulate the price/quantity equation, such as discounts, coupons, or special payment terms. On the other hand, there are value-adding promotions that leave the price and product untouched. Those focus more on giving an additional value to the customer’s experience, such as free gifts, loyalty schemes, or competitions.

Within such competitions, we can differentiate between “enter-to-win” and game-based promotions.

WHAT IS AN ENTER-TO-WIN?

An enter-to-win promo is your basic sweepstakes or contest. There are typically only several pages: the splash (where the prizes are displayed), the opt-in form (how you collect info), and the ‘thanks for entering’ page.

WHAT IS A GAME-BASED PROMOTION?

A game-based promo has all the same components of an enter-to-win (splash, opt-in, thank you) but after a consumer registers, they are directed to a game experience, where they play to earn extra prize entries or perks.
Game-based promotions can be considered as an advanced form of competitions applied not only to consumer acquisition but also to relationship management.

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Gamified promotions vs. lotteries 2

Some people state that in the fast moving digital environment, gamified activities take too much time and therefore represent a certain inhibition threshold. But if we compare those 2 marketing tools a bit deeper, one can say that game-based promotions are much more effective and sustainable. But why though?

1. EXTRINSIC TRIGGERS ALONE DON’T BUILD CUSTOMER RELATIONSHIPS

When you run an enter-to-win promotion, the only reason consumers enter is a chance to win the prize. While the input of driving your community to these promotions is pretty high, there are still certain drop-out reasons which could emerge before the registration process.

  • Participants often just leave their email address or phone number. Regarding all the time, effort, and money required to drive people to your promotion, don’t you want that promo to deliver more than just their email address?
  • ‘Enter to win’ promotions often come with a bad lead quality. Even if your prizing is excellent, and a lot of people want to participate, it doesn’t mean that those leads are valuable for your business. This often attracts fake accounts and people far beyond your target audience.
  • Such competitions have already existed for a long time in the market, and people who have participated in a few and have never won anything have lost a certain interest in it. Therefore, you could miss out on consumers who just assume they won’t win. There’s no other reason for them to enter, so unless they *really* want the prize, most won’t.
  • While extrinsic rewards displace intrinsic triggers, a certain effect of overjustification emerges. As soon as the competition is over, and the winner is known, your community forgets about your competition, or even worse, links negative feelings with it when they ‘lost’. Consequently, your ‘enter-to-win’ competitions don’t really have a long term effect unless your newsletters are spectacular.

2. INTRINSIC MOTIVATION HELPS ESTABLISH CUSTOMER RELATIONSHIP

A game-based promo, on the other hand, offers more incentive to enter. Yes, there is the chance of winning a prize (and your prizing should still be great), but there is also an intrinsic motivation for entering: a fun experience and the challenge of “winning” the game. This helps reach those people who don’t think they’ll win: they may just enter for the chance to play a fun game.

For example, high converters such as interactive scratch cards or a wheel of fortune aim similarly to enter-to-win promos for a high participation rate. But in comparison, gamified activities give a company the possibility to place their brands, products, or services within the game. Moreover, a feeling of self-autonomy gets transmitted to the consumer, and certain risk and surprise factors within the gameplay catch the attention of the participant intrinsically, just like in the gambling industry. Therefore, a game attracts consumers on a different, personal level.

  • You’ve earned it!
    When you cast your vote in an image voting and, in return, get a personal voucher code for free home delivery, you feel like you’ve earned it. It’s a reward for your action, even if the action was just a click, and that makes you value it more, remember it better, and redeem it more likely.
  • It’s personal
    When you spin the digital wheel of fortune and land on a nice price like a free sample, it feels very personal. You won it! It’s something just for you, not shown to every visitor on the site, and it makes you feel a bit more special, even when you know you’re probably not the only one getting the prize.
  • You pay more attention
    An interactive element may be a pop-up overlay or embedded piece of content to capture your customers’ attention. Your customers are likely to compare prizes, shop around, and have other stuff going on at the same time. A fun, interactive, and intriguing promotion will help to get focus on the shopping at hand.

Consequently, gamified smart promotions combine interactive gamification with your specific brand experience. They incentivize your customers, and in return, you’ll learn what makes your customers buy. It’s really all about basic human psychology.

3. IMPACT ON BUSINESS

Regardless which game is used, immediate call to actions can be placed within a game flow. For instance, you can use a pre-programmed coupon code to complete the users’ purchase, or gamified promos can also be used to engage casual browsers to turn them into loyal customers.

One indicator for this is the fact that people build up trustful relationships through the emotions that emerge while playing a game. This is shown in following conversion rates.

  • Attitude towards a brand
    The advertising attitude is influenced by the intrusion and the value of the ad. It is stated that the more informative and entertaining an ad is, the more positive the reaction towards it is. One has to understand that every campaign builds up on the target audience’s brand impression in a continuous process. If attention is raised through a creative campaign on an immersive medium, a flow interaction can emerge. Consequently, the opinion of consumers of a brand and its products, and services can change, which means that the brand attitude and the buying behavior of individuals get affected.
  • Average Opt-in Rate
    One of the main reasons to run a promotion in the first place is to grow your email list. Enter-to-win promos typically do this with a check box on the opt-in page. With a game-based promo, however, you can increase the percentage of registrants that opt-in by rewarding them with perks or extra game-plays when they opt-in. By giving people a reason to join, we’ve seen average opt-in rates of over 70% (compared to the average 50% which an enter-to-win generates).
  • Sales conversion
    One of the most important differences between an enter-to-win and a game-based promo is the impact it has on your bottom line. With enter-to-win promos, it’s extremely difficult to measure the impact the promo had on sales. You typically have to try to analyze sales patterns before and after the promotion.

    If you run a game-based promo, however, you can reward consumers in-game for making a purchase. This does a couple of things:
    1. It can drive additional sales by giving people an extra incentive to purchase.
    2. It gives you a measurable tie to sales.

    You’ll be able to see in your analytics exactly how many people made purchases and, depending on how you reward for purchase, you could even see the value of those purchases.
    This gives you real data to prove the ROI of your marketing efforts, instead of guessing about its impact.

Summary

While a consumer gives his or her contact details in a competition and hopes to win the main prize, the user is actively involved in gamified applications. But is that more effective?

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