Giving Stuff Away? – Don’t Give Away the Farm, Too – Part 1

People want free stuff, right?  You have stuff to give them, and you want them to come to your properties.  Sounds like a perfect blending, doesn’t it.  It could very well be, but there are many things to consider when you are running any kind of promotion, and social media adds a few more.

I have seen a few search strings coming into the blog regarding running promotions on social media platforms.  So, let’s spend some time looking at what others have said about the subject and I will also give you my thoughts on running a promotion.

Let me start by saying that I think quick promotions on social platforms are great things.  I am a big fan of little prizes and more regular offers.  Done wrong though and it can definitely alienate some people, and may even begin to incent behaviors that you hadn’t intended.  If people are engaging with your brand only to get free stuff, you have gone too far.  I will get into the different kinds of promotions below, but first let’s look at two different concepts of giving first: if-then promotions and now-what giveaways.

Now-What Giveaway

When you tell your management that you want to give away something on Facebook, chances are that your managers will immediately think you are talking about a promotion of some variety.  You don’t have to run a promotion to give something away to delight your fan base.  Now-What giveaways are based on the premise that your users are doing interesting things for you already (Now).  So, for instance, a fan posts a great picture standing outside one of your locations and says “had to visit the mothership while I was vacationing.”  Your community manager sees this post and dips into the bin of tsotchkes  (small things of nominal value) and contacts the user to thank them for their comment and tells them that we would like to show our thanks by sending them something (What).

There are some perils even in this situation.  The first is the frequency of this.  As long as it is random and non-programmed I think you can avoid the conclusion that you are running a promotion in disguise.  The best early example of this was in 2010, when Wheat Thins, in their “The Crunch is Calling” campaign, surprised many of their customers who showed their love for the brand by giving them Wheat Thins (NY Times Article).  If the give-aways become too regular, too expected, you have switched over to a promotion of some variety.  Here be Dragons, as our ancestors said.

The other peril is the lack of authenticity over time.  Again, I think this is based on how often you do it, how publicized it is, etc.  The minute your fans expect something for something, you have switched over to a promotion.  Keep it real, keep it unprogrammed, and keep it under the promotion radar and I think you can leverage those fans into super-fans.

If-Then Promotions

If-Then promotions require some sort of entry (If) and the user nows going in that they are entering something in the hopes of winning that brass ring (Then).  These are what everyone thinks of when you tell them you want to do a give-away.  It is fraught with peril, and requires control and process.  The biggest problem, which actually has driven many of the regulations around promotions is that of the person who didn’t win.  They will want to know why they didn’t win, and if the prize is big enough they will do their own mini-audit of your rules and your process.  Gold Peak Tea found this out in their “Take The Year Off” promotion when the folks who didn’t win looked into how Theodore Scott won the promotion.  This story broke last fall, and I imagine that they are still working it out.

Whatever form your promotion takes, you will need rules and process.  I personally think that you start with your process first and then back into what your rules need to be.  First, in the back of your mind think about the person who didn’t win and ask yourself how you will explain to them why they didn’t win.

I have been talking about promotions in a general sense, but there are different types of promotions, so let’s look at each of them and what makes them different:

  • Sweepstakes are prize give-aways where the winner is chosen by the luck of the draw.  Prizes can be anything under the sun.  The selection process is totally random.  Sweepstakes are highly regulated, and different states may look at them differently.
  • Contests choose the winner based on some criteria.  These are where lots of folks get into trouble, the criteria (See Gold Peak above).  I have seen some interesting contests which bifurcate the selection of finalists from the selection of the winner.  This would work by the brand selecting the top 5 finalists based on some criteria and then the user community selects the winner from that.  I personally think this works better than ‘votes’ or ‘likes’ because it avoids the issue of vote farming.
  • Lotteries require some form of consideration to enter.  This may be money, but there is some debate as to whether a like could be enough consideration.  I don’t think it is, but  the more you ask the user to do, the closer you get to that wall.  Unless you have a vendor administer this for you, or have a large staff to do it, I think you want to avoid being considered a lottery.

The next thing to consider is the prize amount.  Here you have to worry about tax law and bond requirements.  In the United States, a prize valued over $600 will require some filing with the IRS.  In some of those United States you may also need to consider posting a bond for the value of the prize with the state.  There are some threshold values to consider: $500 and $5,000.  This is in place because in the past some consumers were being defrauded out of the prize amount to bankrupting administrators.

Partial Conclusion

This post has definitely gotten way out of hand already.  I am going to break it up, and think there may be two more posts out of this.  In future posts, I will address the actual rules and what those rules need to include and then we will discuss running promotions on the individual platforms (warning, there will be terms of service reading required).

If you have any general questions that I am not addressing, please put them in the comments.  While I will not answer specific questions about your promotion, I will try and generalize it to everyone if there is applicability to everyone.

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