How to run a promotional prize draw to immediately boost sales and marketing

Who doesn’t love competitions or the chance to win big? Rewards play a huge role in customer satisfaction. Capitalising on human nature and consumer behaviour is the cornerstone of marketing. If you’re trying to promote your business, win the hearts and minds of potential customers, or use gimmicks with staying power so that everyone will know about your business, then read on. 

Have you been toying with the idea of running a promotional prize draw to boost sales for your business? Prize draws can significantly boost sales as you are rewarding your customers for their loyalty. There are three key elements when it comes to setting up a prize draw legally. First, we will consider the prize itself, then the type of promotion you’re running and finally, how it’s administered. 

What’s the prize?

The prize is ultimately the big draw for potential customers to engage with your business. However, you must describe it as honestly and accurately as possible, so people can decide whether or not to enter. 

For example, if the prize is a one-night stay in a three-star hotel, you shouldn’t describe it as a “luxury holiday”. A luxury holiday implies that food and travel are also included and some people may have an expectation of staying in a five-star hotel for a week.

Whilst your prize may be lovely, it’s likely to be a disappointment compared to what the winner was expecting. This could also reflect badly on your business. 

Channels to promote the prize

Why do you want to run a promotional prize draw? Is it for PR so that more people know and talk about your business? Are you looking to promote particularly products or services? Are you trying to grow your marketing database by collecting email addresses? Know your motivations so you can set realistic goals to measure the success of the prize draw as a marketing tool.

Remember to stay on the right side of the law if you are looking to use the prize draw as a sales or marketing tool. You cannot ask people to pay to enter and then choose the winner at random or your promotion will be classed as a lottery. Without a licence to run the lottery, your promotion would be illegal and you would be committing a criminal offence.

How to run a promotional prize draw

So, putting lotteries aside, you basically have two options:

  1. You could have a free prize draw, where entry is free and the winner is chosen at random

  2. You could run a prize competition where the winner must exercise a “significant” amount of skill, knowledge or judgment

For your promotion to be a genuine prize draw, it must be open to everyone and everyone must have the same chance of winning.

What you can ask of entrants

Although the prize draw must be free to enter, you have the option to set entry requirements that benefit your business. For example, you can stipulate that only people who purchase a special promotional product are eligible to enter the draw. 

It’s also perfectly acceptable to ask for someone’s personal details as a condition of entry to build your marketing database. If they’re not interested in your products or services they’re unlikely to want to give you their details so again, the winner will either be a customer or a genuine prospect.

How to administer a prize draw

To successful run a prize draw, remember to clearly explain every element of the competition, how to enter, how the winner will be decided and more. The best way to do this is to have clear terms and conditions and rules of entry.

Some of the key provisions to include are:

  • The full name and address of the promoter

  • Any restrictions on who can enter (for example, over 18’s only one entry per household, not an employee of the promoter)

  • The closing date by which entries must be received

  • How the winner will be decided

  • Whether the winner will be required to participate in any post-event publicity

Also, you will want to protect yourself in case of unforeseen events. So, for example, you may reserve the right to offer an alternative prize or amend the rules of competition if necessary.

If you don’t get all of this right, (or even if the promotion is far more successful than expected) it can seriously backfire on you. 

Prosper loyalty programme is one of trust

Prosper² understands the importance of using rewards to win the hearts of customers. Prosper² Business Club uses Prosper² Rewards to incentivise its members but also incorporates membership perks and services to boost members loyalty, keep them engaged and provide them with beneficial business advantages. Prosper² Rewards is a points-based open-loop loyalty programme which allows your most valuable customers to accumulate points from their business with you and then redeem these points for their own expenditure.


So, if you’re thinking of running a promotional prize draw or rewards incentive for your business and would like to learn more, read the full version of this handy guide on Business Advice.