7 Ways Giveaways Increase Sales

7 Ways Giveaways Increase Sales

If you are looking for a cost-effective marketing strategy for your business that will encourage social media engagement, increase your brand awareness, and ultimately lead to an increase in sales, you should consider running a giveaway contest. 

In today’s oversaturated social media market, giveaway marketing executed under a well-thought-out strategy really does work with a proven conversion rate of about 34%, according to Small Business Trends

Whether you decide to give away a new product line, a gift card, or a once-in-a-lifetime vacation, you are sure to grab the attention of both your current followers and new potential customers because no one can resist an enticing offer to win something for free.

But how can you convert the higher engagement metrics that come from giveaways into tangible sales? 

This guide will cover everything you need to know about how you can frame giveaway contests to achieve the ultimate goal of driving sales. And for those of you who are new to giveaways, we will also explain how to execute a successful giveaway from start to finish. 

How Giveaways Can Drive Sales 

Did you know that once you reel customers in with an exciting giveaway opportunity, they are more likely to shop your products or services? Giveaway marketing does actually work because it offers businesses a wide range of benefits that can all lead to an increase in sales if leveraged correctly. Here are 7 ways you can use giveaways to help increase your bottom line:

1. Expand Your Email List

One of the biggest advantages that comes from running a giveaway is that you can grow your email list. But how does growing your email list during a giveaway lead to increased sales? 

Once you’ve collected the emails of all of your participants, you can segregate that section of your email list and execute a targeted email marketing campaign. 

Graph showing revenue from email campaigns

Send the giveaway group tailored content based on what they expressed interest in during the giveaway. You can also send out emails with offers for discounts or deals to show your appreciation for their participation. When you tailor your emails to new clients’ interests and offer special deals, they are more likely to make a purchase and convert into customers.

Importantly, email marketing is likely to deliver the highest ROI of all marketing channels with an estimated $42 back for every dollar you spend, according to Forbes.  

2. Increase Your Social Media Followers

When deciding how to do your giveaway, you can structure the contest in order to gain more followers across social media platforms. This will not only help you increase brand awareness and get more eyes on your products or services, but it will also help you obtain more customers. Make sure your entry rules call for participants to follow or like your brand on Instagram, Twitter, Pinterest and/or Facebook.

giveaway marketing for more followers

Here is an example of how brands can do a giveaway to increase their follower count. Rudi’s Organic calls for participants to follow their page, like and save the post, and tag a friend as a part of the giveaway. 

Keep in mind that increasing your followers on social media is a softer conversion strategy than sending targeted emails. That being said, it is possible to convert followers into customers when you deliver interesting content during and after the giveaway. Giveaway marketing work does best when paired with a well-planned social media marketing strategy. 

3. Encourage More Social Engagement

Speaking of social media marketing, giveaways are a great opportunity to encourage more social media engagement from your followers and your followers’ followers.

When you are choosing how to do your giveaway, you can ask participants to tag a friend, to share the giveaway post, and/or to comment something special on the post.

This is helpful because when users see higher engagement with a given brand on social media, it makes people feel like they can trust that brand. Importantly, once a brand has established that it’s trustworthy, people are more likely to buy its products and services. In fact, 80% of consumers consider trust a deciding factor in purchasing decisions, according to Harvard Business Review.

4. Boost Website Traffic

Giveaway contests can lead to a boost in overall website traffic, proving that giveaway marketing really does work. This is especially true if you decide to host your giveaway on your website.

You can add a special giveaway landing page or popup to your site where participants are able to enter the contest. To further encourage site engagement, you can ask participants to leave a comment on a blog post or a social media post describing a product they are interested in. 

Half the battle is getting potential customers to your site. Once they’re there, they are more likely to look around and make a purchase. This also offers the added benefit of improving how search engines rank your website.  

5. Increase Product Awareness

If you are wondering how to do a giveaway to both increase awareness of a specific product and drive sales for that product, you should use the desired product as the prize in your giveaway. This will generate buzz and excitement about the product and might encourage participants who do not win the giveaway to willingly purchase the product. 

Another good strategy is to use samplers of an entire product line as the prize in your giveaway. You could opt to send the sampler prize to multiple winners to get your products in the hands of a lot of potential customers who will be more likely to convert once they’ve tried (and enjoyed) the products. This is a low-cost giveaway option that has a high potential to drive sales. 

product line giveaway marketing

In this giveaway on Instagram, Young Living is offering four contestants the opportunity to win a collection of essential oils that is only available for a limited time. The fact that customers will only be able to shop the collection for a short amount of time promotes a sense of urgency that encourages participants who do not win to purchase the product. 

6. Encourage User-Generated Content

A great way to build brand awareness and drive sales is to encourage the use of user-generated content (UGC) during a giveaway. UGC is any kind of content that followers produce that can be used by brands to promote their products or services and verify their credibility. 

When you are determining how to do your giveaway, consider asking participants to post a photo or video using a given product or service as an entry requirement. Once users post content and tag your brand, you can repost the content and use it as free advertising. 

Using UGC as a part of giveaway marketing does work to increase sales because people are more likely to buy from brands they know are recommended by people they know. In fact, a recent report on global advertising determined that 92% of consumers around the world trust recommendations from friends and family above all other forms of advertising.

7. Increase Customer Loyalty

When you run a giveaway, no matter how big or small the prize is, you will be able to connect with your customers and get them excited about what your brand has to offer its community. Consequently, giveaways work well to increase customer loyalty, and loyal customers are more likely to keep coming back to make purchases. 

How to Execute A Successful Giveaway 

Now that you understand how giveaways can be used as a strategy to increase sales for your business, we are going to explain how to do a successful giveaway in five simple steps:

1. Determine Your Overarching Goals

Giveaway marketing does work, but it only works well when you identify what you want to achieve from the start. Before you share your giveaway with your followers/customers, make sure you establish your overarching goals for the contest. 

Some possible goals for running a giveaway include: 

  • increasing brand awareness
  • increasing social media engagement
  • boosting website traffic
  • increasing sales
  • promoting a specific product

Once you prioritize your goals, you can tailor the ins and outs of your giveaway to make sure it’s a success. For example, if you are hoping to promote a product line with a giveaway, you may decide to give away free samples to 20 participants. But if your goal is to increase short-term sales, it might be better to offer a 25% discount at your store to those 20 participants instead. Every decision you make with your giveaway should be strategically based on your goals. 

2. Set Parameters for Entry

The next thing you have to do for your giveaway is decide how you want people to participate and which social media platform(s) you will use to host the giveaway. Typically, businesses have participants carry out one or more of the following entry requirements:

  • follow and/or like a their social media account
  • like the giveaway post
  • share the giveaway post
  • comment on the giveaway post
  • tag one or more friends in a comment on the post
  • sign up for their email list
  • upload a photo or video for the giveaway

Select the entry parameters that will ultimately help you achieve your overarching goals, but keep in mind that the more entry requirements you have, the less likely people will engage. Try to keep things simple. 

In the context of driving sales, some entry requirements will be more helpful than others. For example, having people sign up for your email list is more likely to lead to an eventual sale than having participants like the giveaway post due to the long-term, interactive nature of emails vs. a one-off like. 

When setting these parameters, be sure that they follow federal and state regulations as well as the rules of the social media platform the giveaway is being hosted on. Some general guidelines to adhere to are:

  • Don’t require payment for entry—if people have to pay for a chance to win, your giveaway turns into a lottery, which is a form of gambling and it is highly regulated by federal law.
  • Clearly define the terms, the prize, and the method for selecting winners. Don’t leave anything open to interpretation.
  • If your contest is based on user-generated content, you have to take into account copyright laws. If you wish to use any content submitted by participants, you must have their permission.
  • Look up the rules about hosting a giveaway in your state on the state’s official website.

3. Select A Prize Relevant to Your Target Audience

Of course, when considering how to do a successful giveaway, you have to make sure you select a prize that will both entice your audience and help you achieve your goals. Some common giveaway prizes include:

  • an entire product collection 
  • a specific product 
  • a gift card
  • a discount on a purchase
  • a once-in-a-lifetime trip or opportunity

The more exciting the prize, the more engagement you will experience with your giveaway. But how can small and medium businesses with limited budgets do giveaways with an exciting prize? You can always try to up the ante of your giveaway prize by partnering with an influencer or another company that aligns with your brand values and can help you offer a better prize. 

trip giveaway marketing

Here is an example of two accounts that partnered up on Instagram to run a giveaway where one participant won a trip to Hawaii. The giveaway post received a ton of engagement with more than 26,000 likes and over 5,000 comments proving that giveaway marketing does work best when it includes an exciting prize 

4. Create a Plan for Giveaway Promotion

Before you launch your giveaway, make sure you establish a solid schedule. 

Firstly, you will have to make sure your giveaway announcement is attention-grabbing and clearly describes how people can join the contest and how the winner(s) will be notified. Then, you should think about how you can do the giveaway promotion to encourage a lot of engagement. Some strategies to increase engagement include:

  • Using popular hashtags in giveaway posts
  • Sharing the giveaway with your email list
  • Having participants create user-generated content
  • Adding a giveaway popup to your website
  • Collaborating with an influencer or another brand who can bring more attention to your giveaway

5. Select and Announce a Winner 

Finally, when considering how to do a successful giveaway, you want to make sure that you have a plan for how you are going to select and announce a winner. Thankfully, there are plenty of automated giveaway tools that can easily help you select a winner. 

When it comes to notifying your giveaway winner(s), of course you can reach out privately, but it is recommended that you announce the winner on a public platform to show your participants that you followed through with your promise to give something away.

And don’t forget about the participants who didn’t win! You can offer all the participants a discount code as a strategy to boost your sales.

Boost Your Sales With A Giveaway

If you still aren’t sure about how to do a giveaway to increase your sales, get in touch with the experts at Coalition Technologies today. 

We are a recognized leader in digital marketing with a proven track record of helping businesses of all kinds execute effective online marketing campaigns. We also offer outstanding web design services and data-driven SEO services that are guaranteed to help your business thrive.

For more information, give us a call at (310) 827-3890 or email us at [email protected].

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