What You Need to Know About Running a Contest Promotion

Have you tried almost every strategy or method to market your business with minimal results? Now may be the time to consider running a contest promotion.

Contests can be a great way to attract new customers, build interest in your product or service, and engage with your audience. But it’s important to make sure you run the contest correctly according to all rules and regulations and in a way that benefits both you and the consumer.

Read on to learn how to run a contest promotion.

What Is a Contest?

A contest is a type of promotion that gets your followers and potential customers to engage with your business. You can use a contest promotion to grow your business at any time, and it can be especially beneficial when releasing a new product or service.

When you set up a contest, you’ll need to determine what prize to offer and if there will be one or more winners. If you want multiple winners, you can have a first, second, and third prize, for example.

Since contests are based on merit, you may also want to select a panel of judges. That way, you have enlisted people who can be objective when choosing the winner. 

You also need to select a prize that will be appealing to those who enter the contest. It can be anything from a free product to a trip.

Benefits of Running a Contest

Running a contest is an easy way to promote your business, especially if you run the contest on social media. You can even gain more exposure by requiring people to tag your social media account in order for their entry to count. That helps put your business in front of their followers.

A contest can also help you build interest in a new product you’re developing. You might run a contest where you ask people to guess what your new product does or how they will benefit from it. Then you can choose the best answer.

Depending on your contest prize, running a contest can be relatively affordable. You’ll just need to pay for the cost of marketing the promotion and the value of the prize.

Contest vs. Sweepstakes

Another popular promotional tool is a sweepstakes, which is similar to a contest. However, while a contest relies on merit to win, a sweepstakes relies on luck.

Running a contest is excellent if you want to see how creative or intelligent your customers are. Those who enter will usually spend time perfecting their entry to increase their odds of winning.

Laws for Running a Contest

Another critical difference between contests and sweepstakes is the laws surrounding them. If you run sweepstakes, you can’t require a purchase in most states and countries. The fact that the winner is random means you have to state that no purchase is necessary.

However, when running a contest, you can require a purchase. That can be a bonus if you want to get more sales leading up to the contest entry deadline.

But keep in mind that some states don’t even allow contests to require a purchase. The following states don’t allow purchase requirements in sweepstakes or contests:

  • Colorado
  • Maryland
  • Nebraska
  • North Dakota
  • Vermont

Of course, there is the option to exclude those states from your contest. However, that may significantly reduce the number of entries, especially for local businesses in or on the border of those states.

Should You Require a Purchase?

The fact that you can require a purchase to enter a contest doesn’t necessarily mean you should. Consider what type of contest you’re running and the goal of that promotion.

For example, a contest where you require people to show themselves using your product may require them to buy from you if they haven’t already done so. In that case, it can make sense to require a purchase, even if that means people in some states can’t participate.

But if you want to run a contest where people explain what they love about your product, they shouldn’t have to purchase it to enter. Whether they own it or simply know someone who does, they can share their experience.

On the other hand, you may wish to require a purchase if you want to quickly get a lot of sales. If the prize you offer is valuable, it can be an easy way to increase your revenue. And you can use the prize as a way to get rid of old stock before a new product comes in.

Contest Types

Once you decide that you want to run a contest, it’s time to choose the type of contest. There are a few different types you can choose from, and you can use a unique structure each time you run a promotion.

Think about what your goal is in running a contest, whether it’s to get sales, to grow your social following or email list, or to gain something else. You also need to decide if you want to bring in a guest judge or if you want to judge the entries yourself.

Consider the following ways to run a contest and what each type involves.


A photo contest is a fantastic option because it allows people to really get creative. If you want to require a purchase, you can have the entrants snap a photo of them using your product. 

Another idea is to have people take a photo of things that are in your brand colors. That way, they don’t have to buy from you, but their photo can still help promote your brand. Photo contests are also relatively accessible for everyone, especially as smartphone cameras get better each year.

When the entries come in, you or another judge can choose the best photo. Or you can focus more on objective qualities, such as the lighting or composition. Just be sure that what you are basing the winning photo on is clearly explained in the entry rules.


Running a video contest is similar to a photo contest, but it does involve a little more effort on the part of each entrant. Video contests can be terrific for businesses such as music studios. For example, if a private piano teacher wants to give away one free month of lessons, they can require people to submit a short video recording of why they deserve to win those lessons.

Another video contest promotion could require people to share what they love the most about your brand.


If you want to keep your contest simple, ask a question and take replies as entries. You can ask questions such as:

  • What’s your favorite product that we sell?
  • What product would you like to see from us?
  • What would you do with the prize?

Contest promotions with questions can be a great way to learn more about your ideal customers. Just make sure the prize is in line with what your customers would want. That way, you won’t get a ton of answers from people who would never buy from you.

You can keep the contest short with only one question, or you can create a survey. The question could be as simple as why someone wants to win, or it could be something more specific, such as how they feel when they visit your website. 

When the contest deadline ends, review all the answers and choose the one that you like best or that best sums up the benefits of your product.


A referral contest is perfect for a business looking to grow quickly. You can have people join your email list, which you can count as an entry. Then, you can encourage those people to refer their friends in order to get more entries.

To keep the referral portion classified as a contest rather than a sweepstakes, you can choose the winner based on how many people they get to sign up. That way, you aren’t selecting the winner based purely on luck.

A referral contest promotion can actually save you time because the numbers will be the deciding factor in naming the winner. That way, you don’t have to spend time reading or viewing different entries and judging them.

What Type of Contest Promotion Will You Run?

Running a contest promotion can be a great way to grow your business. But before you get started, consider if it’s better to host a contest or sweepstakes. Then, if you do choose to run a contest, you will need to decide what type of contest makes the most sense for your business.

From there, you can start marketing the contest and watch the entries roll in. Finally, you can choose the winner and send them their prize. Just be sure to announce the winner in a way that all the entrants can see who won. It’s the final step in continuing the promotional benefits of your contest.