The Art of the Raffle
If your businesses is in need of a marketing tactic to add to your arsenal, have a look at â€œImpact a Lifeâ€ college scholarship contributor Max Dunevitz for some terrific insights.
Max is planning on attending Washington State University to pursue Business Administration. Thanks Max for your fine contribution, and best of luck!
â€œImpact a Lifeâ€ Scholarship contributor:Â Max Dunevitz
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Raffles are one of the most psychologically beneficial promotional tools at the disposal of a business, if it is used correctly. There are ways to correctly keep loyal customers through a raffle, and there are ways that can make the company a great deal of money.
The first and most easily identifiable way of going about a raffle is to provide raffle tickets as an incentive to buy the product. That is what the customer knows, but what they donâ€™t know is that prior the period of the raffle, prices of the companyâ€™s product are slightly increased, maybe by 3%-5%, so that a percentage of all revenue can go towards purchasing or funding the service or reward that the raffle promotes. For example, say Home Depot sells interior paint for an average of $29. If they decide to offer one raffle ticket for every can of paint sold, and the winner of the raffle receives free interior painting for every room in their house by staff of Home Depotâ€™s hiring. This would obviously rack up some costs on Home Depotâ€™s behalf. An average 12 foot by 12 foot room takes 5 hours on average to paint. You multiply that by 6 rooms (the average American household, excluding bathrooms) and the job increases to a 30 hour project. The average painter makes $45 an hour, totaling $1350. If home Depot raises paint prices by 6%, and sells just over 700 cans of paint, they have already accounted for the total cost of hiring the painter for the winner. This provides a monetary boost for the company because if people come to the conclusion that the more product they purchase, the better chance they have of winning the raffle, a company is then able to sit back and watch the revenue roll in.
A raffle can also retain loyal customers by offering a service to the winner, as previously foreshadowed in the Home Depot example. If a service is provided, such as a car dealership holding a raffle for a free set of new tires, with installation, it shows how dedicated the company is to the customer, and that they are willing to make sacrifices to prove they are better and more trustworthy than the competition.
In certain circumstances, raffles can help drive sales, whether it be for an unpopular product in the line, because of the idea that is created in the consumerâ€™s mind. In psychology, there is a concept called Reganâ€™s reciprocity experiment, which entails the idea that if I give something to you, you feel obligated to give something back to me. In the business world, a raffle would provide an obligation from the consumer to give the company their business, since the company is providing the raffle ticket(s). So now, the raffle ticket provides monetary value, as well as psychological want from the customer.
Another way that a raffle can provide a psychological want or need is in the way it can create a fun environment and atmosphere out of it. If Barnes and Nobles wants to open a new store in a less affluent area, they can quickly gain popularity, publicity, and brand loyalty by having raffle giveaways at the center of a grand opening which can include refreshments, games, activities for kids, etc. It can be disguised as the same money-making and customer-keeping technique as discussed in previous paragraphs, but instead of just having the raffle as an incentive by itself, it can be complemented with other publicity gainers to drive sales, acquire customers, and gain brand recognition on an all new level.
There are many other marketing techniques in the business world, but many seem to overlook the fantastic opportunities that come from holding a raffle. The cost to produce it is low, as paper tickets cost little to nothing, it is easy to advertise: everybody wants something for nothing, the cost of the prize for the winner can be acquired through sales of the companyâ€™s product, however you look at it, a raffle is a win-win situation for the consumer, and even more so the company.