No doubt that Old Navy will receive a large amount of consumer data in its “Wish It, Win It” Instant Giveaway which encourages visitors to create an online wish list of up to $500 for a daily chance to win everything in it. Similar results may be in store for FabulousSavings.com which prompts visitors to enter for a chance to win $50,000. In exchange, all you have to do is register. Despite the number of sweepstakes this season – and the predictable traffic boost they create – it’s still hard to hear the cash register ring for email marketers trying to use this tactic to build an engaged file of new customers.
No wonder, since our experience suggests sweepstakes-sourced subscribers actually convert less than half as well (40-70% less based on recent client campaigns) than opt-in subscribers. Why? Because entrants are primarily interested in the prize and not necessarily in buying the products or service. That means in order to achieve a positive ROI, you need at least 2x the number of leads, or you need 2x the average order size – just to leave your email file as responsive as it was before you started.
When running a sweepstakes you also pose a risk to your email file health. Having a lot of subscribers who are not interested in your company or products could lead to higher complaints, and hurt your deliverability for all subscribers. Consequently, your response rates will decrease as you flood your file with non-responsive subscribers who will, frankly, never respond.
However, there are ways to use sweepstakes effectively to grow a house email file.
Always do an ROI analysis and see if you can make a positive business case for your sweepstakes. Factor in the risk to your sender reputation (deliverability), unsubscribe rate and overall file responsiveness. While there is no contest that sweepstakes promotions can be great traffic drivers, it is important to weigh the consequences when the stakes (your reputation) are high. While your potential customers are playing to win, you can’t afford to play games with your email file.