Why That Giveaway Is A Terrible Marketing Idea

by Art

Last updated on July 31st, 2017

Just about every marketer has been there.

“Our numbers are looking a little low this month. We need to do something to boost sales.”

*Lightbulb* “Let’s run a giveaway!”

“That’s perfect. The new iPhone just came out, so we can give one of those away.”

I’ve been in this situation myself, which is why I feel that I’m qualified to look back and say that this is a terrible idea.

On the face of it, an iPhone/iPad seems like a great prize:

  • It has significant monetary value—even the most basic model goes for $800+
  • It’s desirable—right after launch the devices are often in short supply
  • It’s luxurious—upgrading phones is something people often put off until it’s essential

However, there are also a number of key problems with giving away something like an iPhone, iPad or Apple Watch.

It’s this set of problems that means the majority of iDevice giveaways probably fail to recoup even the value of the prize, let alone generate any sales.

Problem #1: It encourages freebie-seekers and treasure hunters

We're just here for the free stuff!

We’re just here for the free stuff!

Hands up if you have a dedicated email account that you use for competition entries or things you think might result in spam. I know I do.

Now, compound that with all the blogs out there dedicated to aggregating all of the contests and giveaways out there.

The result is often a list of thousands of entrants…very few of whom have any interest in your company whatsoever.

Try to use the email list you gather during a giveaway like this and you’ll likely find both of the following:

  1. Low open rates
  2. High unsubscribe rates

The latter can actually be really damaging, as it can result in your emails ending up in spam folders if enough people report abuse or mark them as spam.

Solution: Find the right barrier to entry

Doing something to discourage entrants might seem like the opposite of what you want, but it’s worth thinking about: when it comes to leads, quality beats quantity.

On the other hand, asking for too much data or effort is a surefire way to discourage even potential entrants who really want the prize.

A good compromise is asking people for an email address but offering them an extra chance to win if they share something, perhaps involving a hashtag, on Twitter.

Social media is still a very personal space, and most people won’t share something unless it fits with the image they’re trying to project there.

This means that people who could become enthusiastic about your brand/product, and may have friends who could be as well, have a better chance of entering (and winning).

Problem #2: The prize is too…meh

gift wrapped iphone 5c

Yes, a lot of people like iPhones. But a lot of people already have iPhones.

Of the ‘brand new, still in box’ iPhones listed on eBay right now, I’m willing to bet that a significant percentage were unwanted—or more accurately, less wanted than cold hard cash—prizes.

There’s a great post on the Vero blog about conducting an effective marketing giveaway, and one of the big takeaways from that post for me was the importance of shock value.

iPhone/iPad competitions are everywhere these days, so they just don’t have the desired effect of enticing entrants in the same way that they once did.

Solution: Give away something valuable to YOUR audience

This is where the thinking cap needs to go on. What would make your ideal reader/customer’s life easier? If you can’t figure this out yourself, ask existing customers…just make sure to enter them in the giveaway as a thank you.

survey your existing customers for prize data

Survey tools like Qualaroo can be placed on your website to gather desired prize information

If you work for a brand that has their own product this is much easier. A one year subscription probably won’t cost you much, but it’s extremely useful to someone who actually likes the look of the product.

Problem #3: Marketers often fail to effectively follow up after giveaways

Sometimes marketers leave a gap of months between setting up a contest and sending the first email to the resulting list. This is a big mistake, as the average reader will have forgotten about signing up in the first place.

They’ll probably assume that you’ve bought the list from someone else and are now spamming them. First impressions are important, and this is not the one you want to make when you’re sending what’s probably a promotional email.

Whether it’s a follow-up about how to gain extra entries or a notification about when the winner will be drawn, you can start testing how responsive your new list is before the contest is even over.

Solution: Craft the perfect “loser email”

One of the best marketing emails I’ve ever received had the subject line “You’re a loser.” Unfortunately I can’t find it in my email inbox, so please help me out in the comments if you received it too.

What I do remember is that it was a follow-up to a competition I’d forgotten that I’d even entered. The email announced that a winner had been drawn, which is HUGELY important when you’re giving away a product/subscription.

Fail to announce a winner, and some contest entrants will hold off purchasing indefinitely ‘just in case they win’. Tell them that the winner has already been drawn, but offer them a discount on the product.

Here’s a nice example of such an email from a blog post over at Wishpond:

post contest email wishpond

Final Thoughts

People often run giveaways out of desperation: they want to build an email list to boost sales for a given month or plug a hole in their funnel.

As a result, they often neglect to make sure that the leads they’re generating are actually worth having.

If you want to make giveaways part of your promotional strategy—and there’s no reason why you shouldn’t, as they can be very effective when done well—start thinking about the hows, whys and wheres (specifically the channels you’ll be trying to reach) early in the process.

Oh, and one more thing. If you’re giving away something cool, do me a favour and let me know.

Had a negative (or positive—I’m always willing to be proven wrong) experience running a giveaway? We’d love to hear about it. Just drop your story in a comment below.

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Art

Art is a freelance copywriter/content marketer based in the UK. He's worked with both startups and large corporations on topics ranging from fitness to tech and business issues.

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  1. Belle says:
    November 13, 2017 at 10:56 pm

    I agree with this post. I get so many emails about a free iPhone, but I’ve already got one. So, I’m already out.

    I’ve been running a giveaway for about 3 days and have over 200 subscribers thus far. I keep getting FB comments from people really hoping to win the prize (coloring book + set of erasable colored pencils).

    In summary, I’ve found giveaways to be ultra-effective.

  2. Cheri K. says:
    May 14, 2017 at 10:14 am

    I’m currently running a giveaway for my target market to help boost the launch of my product on Amazon. It’s only been a week and I only have 21 entries…I feel a little better after reading your article though because the prize is NOT glamorous but is very well suited to my customers. I was worried that maybe I chose the wrong giveaway product but I’m thinking that is not the case- I have an 85 percent open rate on email follow-ups so I’m trying to be positive and realize quality is better than quantity.
    Thanks for the article.

  3. Lisander says:
    October 15, 2016 at 5:59 am

    I just found this article as I am preparing to launch a giveaway for my local jobboard.

    I was having problems selecting a suitable prize, but finally I found a prize I find perfect for my audience. The prize I’m giving away is a Featured Resume posting and a book helping jobseekers to prepare for the application process.

  4. Josh says:
    September 7, 2015 at 10:34 pm

    If you are going to give freebies, it better be beneficial to both the buyer and seller. You cannot just give something because it is popular. The freebie must be related to the product or service you are providing.

    • Art says:
      September 8, 2015 at 2:39 pm

      Absolutely. Pretty much every successful giveaway case study I came across did exactly that: the prize was a tool/access to a service that would be genuinely useful to potential customers.

  5. Jonn Bloomer says:
    September 3, 2015 at 5:18 pm

    Title doesn’t really match the conclusion but I agree if done incorrectly and for the wrong reasons then you can have a recipe for disaster but you definitely can use giveaways to generate many different types of consumer interaction, whatever your business goals may be if done correctly.

    • Art says:
      September 8, 2015 at 2:37 pm

      Hey John,

      The title for this was a bit of a tricky one; what I really mean is Why *That* Giveaway Is A Terrible Idea. I tried to define ‘that’ giveaway, i.e. the one that would be a terrible idea, at the beginning of the post and show how you can make sure yours doesn’t fall into that trap.

      Overall, I can’t deny that giveaways can be useful tools when they’re done in a certain way!

      Thanks for reading,
      A

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