Kevin Corrier-Cox essay

If You Raffle It, They Will Come

 

Describe how a business (including retail and service) can derive promotional and customer loyalty/retention benefit by utilizing a raffle in their marketing efforts.

 

As we head into 2018, people reflect on the new products and technologies from the past year and ponder on what is to come. Everything from getting up to going to bed can be optimized, programmed, and tracked whether through Siri, Alexa, or a whole litany of other apps and services, making us hopeful that we will one day reach total human optimization. However, human beings still have some leftover flaws and fallacies, specifically our idea of chances. Our tendency toward loss aversion and instant gratification, suspends rationality and makes sense for us to drop $3 here and $5 there for something like the lottery, even though numerically you have more of a chance to get struck by lightning than winning. On top of that, total number of spending on lotteries, which has no investment returns or stimulation into a local economy, added up as a whole to $70.1 billion dollars in 2014, according to the North American Association of State and Provincial Lotteries.

Many researchers and economists have tackled this issue and tried turning our enjoyment of a lottery into an incentivized savings raffle, as documented in the Freakonomics Podcast. Instead of spending, you save more for a chance to win the big prize of the month, accumulated from all the bank accounts’ interest. If you win, you get an additional $100,000 or so, but if you lose well you still have your money saved and on track towards your future goals. Win-Win. These programs have had success but in my point of view, it would be a lot easier to address a lack of savings with a more efficient way of spending, more specifically, a way of spending that stimulates an economy with less debt. The less debt part is important because what’s worse than not having money, is owing money that grows everyday in interest. In March of 2017, a report by the New York Federal Reserve announced that the American household balance of debt is around 1 trillion dollars in credit cards. That is trillion with a T.

Lotteries are bad, people have debt, but I’m a business owner that wants people to want to spend, what should I do? Here’s where raffles come in. A lot of the credit card debt comes from retail-issued cards that offer points and savings when buying through their card or offers lay-away options for customers. That may sound like a great way to get sales and build loyalty, but ironically when we get out of a recession like the way we are now and creditors get more comfortable with lending, we start to see de ja vu from the 2007/2008 crash and that new sweater or car wax job is the first to go. Instead, offer a raffle where every month customers get put into the drawing and simply draw a winner for that month. Here in my college town, the local retail store helps shoppers save on a mystery bag of three shirts. Nothing says brand loyalty like people agreeing to a mystery bag and are confident they will love every item. This way if customers lose, they did the shopping and enjoy the products they wanted anyway but this time without worrying about debt later or get a tiny discount on the tenth item that doesn’t justify the first 9, or if they win and receive cash or a great item, loyal patrons enjoy your store and products even more. Not to mention all this avoids the dreaded L-word where nobody gets any return and sucks up 70.1 billion dollars from store owners getting your business and hiring more people. Customers get their need for thrill and fun satisfied, not with a pointless lottery, but with a fun raffle that avoids debt and gives your consumers a fun reward to thank them for their business.

 

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