Prize promotions support customer retention by creating positive associations for your brand and building trust with your customer base. They are highly effective vehicles for rewarding customer loyalty and promoting engagement. They can also help your company stand out from your competitors, and therefore drive current and future sales.
Can tailored prize promotions support customer retention?
Prize promotions support customer retention because they can be tailored to the people you want to communicate with – including your existing customers. You can publicise your promotion using marketing channels that you know will reach them, for example push notifications or social media, and you can offer prizes you know will appeal to them.
You can utilise the engagement produced by prize promotions to open a dialogue with your customers. For instance, you could ask them to tell you more about themselves or for feedback on a particular product. Prize promotions help deepen the relationship between your brand and its customers, although you must always follow UK data protection rules, including GDPR.
Can exclusive prize promotions support customer retention?
Exclusive prize promotions can support customer retention, because when only existing customers can enter a promotion it makes those customers feel special and creates a positive association.
For example, the home shopping network QVC ran an instant win prize promotion. Customers used order numbers to enter, which meant non-customers were ineligible. There were 1000 prizes consisting of a both QVC credits and physical prizes, and all participants were entered into a prize draw for a grand prize of £10,000. This prize promotion generated positive sentiment for QVC and rewarded customer loyalty.
Can interactive prize promotions support customer retention?
Interactive prize promotions can support customer retention, because by offering customers the opportunity to win a prize, you encourage them to engage with your brand. An enjoyable and memorable experience promotes trust, engenders loyalty and drives future engagement, which means consumers are more likely to purchase from you again.
For example, to celebrate 25 years since the launch of its Starmix product, confectionery company HARIBO ran an open magic moments prize promotion on bags of Starmix and other sweets. To participate, customers had to input a unique on-pack code. There were 4,200 prizes available, including games consoles, experience vouchers and board games, plus a grand draw for a holiday in Florida. This strengthened the bond between brand and consumer.
Why is customer retention important?
Customer recruitment is expensive – it tends to cost more to find new customers than it does to hold on to the ones you already have – which is why customer retention makes sense. Existing customers are more likely to make repeat purchases and spend more each time they purchase from you, which is better for the long-term success of your business.
What are the key points about prize promotions and customer retention?
Prize promotions help brands make meaningful connections with their customers, so they support customer retention by:
- creating positive associations for your company
- building trust with your customer base
- rewarding consumer loyalty
- promoting brand engagement
- enabling your business to stand out from competitors
- driving current and future sales
