Secrets About Sweepstakes
I am about to reveal some untold secrets about sweepstakes. This information comes from 40 years of marketing experience, with 30 of them at the very private and secretive granddaddy of sweepstakes ... Publishers Clearing House.
Although everyone in the business world thinks of sweepstakes and contests as gimmicky and unprofessional — and I don’t disagree with this characterization — the power of this marketing tool is second-to-none.
It is interesting that despite the negative persona of sweepstakes, many well-known people and companies have used this powerful marketing tool, such as Warren Buffet, Hillary and Bill Clinton, McDonald's, St. Jude Children’s Hospital, American Express, Citibank, Procter & Gamble and Johnson & Johnson; and the list goes on and on to numerous businesses in virtually every industry.
All marketers are wary of sweepstakes, and even Publishers Clearing House was initially fearful about its use. When first tested back in 1967, Harold Mertz (the founder of PCH) said to his small management team: “All in favor of doing this sweepstakes and ruining my business, raise your hand.” (This is a quote from Harold Mertz, coming from a gentleman who was there at the time, Bert Rowley.) But our founder was convinced by one lone voice and the sweepstakes turned PCH into a billion-dollar marketing powerhouse. What’s even more remarkable is that PCH’s initial foray into sweepstakes was effective with a grand prize of just $10! That’s not a typo; the PCH grand prize was a mere ten bucks in that bygone era. But, today, of course, we all know that the big dollar prizes rule.
I should note that even those who use sweeps don’t know their true value; they just know they help generate added sales. The secret is that an effectively run sweepstakes or contest can improve sales by 25 percent to 100 percent. (This is based on my detailed knowledge of PCH tests. I, in fact, looked at PCH test results every day for 30 years ... totaling over 4,000 tests. Several of those test results were for sweeps vs. no sweeps. This is info that even most other PCH employees were not privy to.) And the added good news is that you don’t have to fund or execute this on your own. There are several companies where you can “borrow” their sweepstakes as a co-op client, and this independent company takes care of all the execution and legal details. Plus, the cost of the prize is a fraction of what it would cost if you paid for it yourself.
Another closely guarded secret was that in PCH’s heyday, we considered getting out of sweepstakes altogether. It was during the peak of the negative press over sweepstakes in the late 1990s. PCH was being slammed by the news media and embroiled in legal trouble — and, in fact, close to going out of business – so the management team decided to see if we were better off without sweepstakes. At the pinnacle of the negative press, we secretly tested the value of sweepstakes, and the result surprised our entire management team. The test indicated that even during this especially challenging time, results were overwhelmingly positive for the use of a sweepstakes. So today, PCH continues to use this compelling promotional tool.
My suggestion based on my experience is — put aside your inner feelings that sweepstakes are “gimmicky” and take advantage of their power to generate new customers and increase sales with your customer base.