The Psychology of Raffles to Help Grow Your Business by Candice Holt

The Psychology of Raffles to Help Grow Your Business by Candice Holt

 

Traditionally, a raffle is a way of raising money by selling numbered tickets. Those who have the random winning numbers on their ticket will receive a prize. Although raffles are random, they can be rigged. A business can teach their consumers to use their products through raffles. In psychology there is a mere exposure effect that occurs on customers due to previous exposure to a product name they gain a learned preference for the product. This learned preference increases the customer’s probability of buying that named product over others. So, while promoting a raffle through social media, web advertisements, television, and the radio the businesses name should be announced multiple times during the advertisement for the raffle. Raffles can be held in the door way of stores to attract customers outside to come in. Raffles could also be held towards the back of the store to force customers to walk around the store and past enticing merchandise to get to the raffle.

In order for a customer to learn a lasting change in behavior or mental process must occur due to an experience. This experience that would cause such a change is winning a raffle ticket. There are two traditional ways of teaching; operant conditioning and classical conditioning.

Essentially operant conditioning is learning behaviors based on consequences. For example every time a customer spends over a hundred dollars in a department store they receive a ten dollar coupon for their transaction. Overtime the customer is shaped to spend one-hundred dollars each time they go into the store to get the coupons. B.F. Skinner a famous psychologist hypothesized the law of effect which states: responses that produce desirable results would be stamped into the organism. Everyone loves free gift cards. A retail store could advertise through email for a raffle costing $15 for gift cards from one thousand dollars to five dollars. If everyone won a five dollar gift card and one person won a thousand dollar gift card everyone who participated would now be more likely to participate in another raffle. Everyone would also be inclined to go to the store and purchase something with their new gift card. In this example the behavior of the customer we want to change is an increase is shopping and participation in raffles. When everyone receives a gift card they are also getting positive reinforcement. This increases their chances of performing the same behavior again. Increasing participation in raffles also increases revenue for businesses. The next time around the raffle is done; participation should increase because of word of mouth. This time only a third of entry winners should win a gift card but everyone will receive a ten percent coupon. This will “stamp” in the idea that participating in raffles from this specific store will result in free money. Customers will become loyal participants in store raffles. They are now accustomed to winning prizes during a raffle. When a specific clothing item is raffled off like a fur coat the participants will desire the coat so much that if they do not win it some will buy it themselves, even though they had no previous desires for the coat.

Reinforcements should be given intermittently. There are various reinforcement schedules such as an fixed ratio schedule where a prize is given every time a customer spends x amount of money.  Fixed interval schedule is when reinforcement is administered after x amount of time the customer has used the companies services. There is also random ratio and random interval schedule when a customer receives reinforcement after spending a random amount of money or been a loyal customer for random amount of time. Random interval schedule will cause an increase in customer loyalty because the customer will constantly come in the store and shop to see if they will receive some type of promotional item. Using psychological methods through raffles will help businesses increase revenue and participation in promotional items.

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Contributed by Candice Holt

 

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