Why lottery might be inefficient in some cases

Lottery is a common tool for promotion of goods and services as well as for maintaining positive relationship with clients. However, if implemented incorrectly, the lottery might not work or can even result in a negative attitude to the brand.

One of the examples when the lottery might appear inefficient is incorrect choice of the prize. If a company A offers a range of goods, e.g. books, let it be a book store, has its permanent clients pool, and decides to organise a lottery for a promotion of a recently published book, it has to be very careful with the choice of a prize. If the bookstore chooses the book itself as a prize and organises a lottery, which guarantees this book as a prize to the winner, this kind of promotion might not have a sense. The loyal clients are loyal because of the bookstore’s books selection. They come there to buy something new to read, follow the news and new offers, and allocate their budget in way to be able to purchase something for themselves there. Each book in a bookstore is represented in a limited quantity to satisfy the demand of several clients since each customer has his/her own taste and would definitely not prefer product X over product Z. A newly released book as a lottery prize means for the bookstore that it has to have a sufficient number of clients who would like to get this book. Of course, people like free things, and there will be a pool of clients interested in participation in a lottery. But for the bookstore their participation accounts for almost no value because the number of clients does not increase and the loyalty of clients does not increase too because there is a very low probability that a tiny proportion of those who are really interested in getting the prize would really get it since there are a lot of freeriders. The only positive effect the lottery might have in this case is a possibility to raise a general awareness among wider groups of people regarding the new release.

A more efficient way to promote a new book would be the organisation of a presentation, of some special event with the participation of the author. This would work much better because it would allow the readers of this particular author to increase their loyalty to the shop in exchange for a value they get. The thing is about the attitude here, not about money. The loyal reader does not play lotteries, it visits the store to buy the book he wants.

If the venue really wants to organise a lottery, it should think in terms of complimentary goods — goods that everyone needs. This might be a notebook signed by the author or something else explicitly related to the subject of promotion.

To conclude, it is important to understand that not the agiotage with disappointed fans, who did not win the prize rules the good business but the gradually, step-by-step built customer loyalty.

Leave a Reply

Your email address will not be published. Required fields are marked *