Raffles Are An Interesting Marketing Tactic
Alexander Haslam, a Physical Sciences major at The Massachusetts Institute of Technology takes an interesting look at structuring a raffle to enhance revenues.
We appreciate your fine “Impact a Life” college scholarship contribution, and wish you the best of luck with your studies!
Raffles are an interesting marketing tactic that have been used for a long time. The structure of the raffle itself can be very important in both predicting and raising revenues. Next, the prizes are paramount to success. Not only the prizes, but, the demographics of those you are selling the tickets to. However, the most important part of any raffle, or any fund-raising effort for that matter, is the cause itself. Making people aware of the particular cause that the raffle is providing for is crucial to the success.
I’ve seen raffle structured many different ways. I was recently in Montana’s Gem Mountain and they were hosting a raffle for silver bars. This raffle was interesting in that it had limited tickets available. Most raffles that I’ve seen have been buy as many tickets as you want, we draw a few numbers, and a few prizes are given out. Not in Gem Mountain. It particularly struck me as quite brilliant because the revenue, the cost, and the profit, is all built in and easily predictable. This structure of raffle gives a rigid cost/revenue structure that allows for much easier predictability in how many funds will be raised. It can be taken a step further, in that, if you need to raise $100,000, you could fairly easily predict how many tickets, how many raffles, how many prizes, etc. will be needed.
This differs greatly from the more traditional raffle where participants buy tickets, but, the tickets are unlimited. They generally go into some kind of hopper and are chosen at random. This looser structure allows for much more potential revenue, but, the predictability of it is very low. It’s much harder to predict how many people will buy the tickets when there are unlimited tickets, whereas, with a limited ticket raffle, you can probably safely assume most tickets will be sold, unless the number of tickets are ridiculously high. This unpredictability makes it more difficult to project potential revenues and, in turn, harder to see which projects can be funded and which cannot.
Those are the two basic type of raffles that I’m familiar with and can have a strong impact on the projection aspect of the fund-raising. More important than the structure is the prizes and costs of tickets. So, if we have tickets that cost $1 and the prize is a car, we will probably sell a lot of tickets. However, the cost to value ratio needs to be taken into consideration. If we have a car as the grand prize and we sell tickets for $1, we had better sell a lot of tickets. It’s a big risk. This is where knowing the demographic comes in. If you take a raffle for a car to a neighborhood, or, area where people don’t really have a lot of cars, and, the price for a single ticket is $1, you will sell a lot of tickets. Conversely, if you offer a Toyota Camry as the grand prize in Beverly Hills, even at the cost of a dollar per ticket, you probably won’t sell many tickets.
So, choosing the proper structure with the raffle itself and cost/prize ratio is crucial, but, the most crucial aspect of any fund-raising activity is the cause itself. You must have a worthy cause because everyone knows that raffles make money. Having a worthy cause will allow people to remove themselves from the rationalization of the prize to value ratio and more likely to buy a ticket just to support the cause itself – regardless of if they win anything.
Overall, many factors come into the play with the raffle. From knowing your demographic to the structure of the raffle itself. There are many different options that play to the strengths and weaknesses of different situations. To really structure a raffle, such that it makes money, all the above factors.
â€œImpact a Lifeâ€ Scholarship contributor:Â Alexander Haslam
YÐ¾u ÑÐ°n hÐµlÑ€ Alexander Haslam’s pursuit Ð¾f a scholarship award bÑƒ ÑlÑ–ÑkÑ–ng the â€œsharing Ñ–Ñ• ÑÐ°rÑ–ngâ€ buttÐ¾nÑ• bÐµlÐ¾w.