The impact of prize promotions on e-commerce sales

How free-to-enter prize promotions quietly drive sales, engagement, and loyalty in e-commerce

For a long time, brands have assumed that the most effective way to encourage potential customers to make a purchase is to offer a discount. However, over the last several years, most businesses have embraced prize promotions. We’re not talking about the “buy one get one free” type, but draws where people enter freely for a chance to win a prize.

While these campaigns have primarily been used for visibility, they do a significant amount of heavy lifting behind the scenes to boost e-commerce sales. In this guide, we’ll take you through the different ways your store can benefit from prize promotions.

They drive traffic without a hard sell

One of the biggest strengths of prize promotions is that there’s a low barrier to entry. Unlike a discount or a prize promotion with purchase, the participant doesn’t have to spend anything, so they are more willing to interact with your post and visit your website. This means that you’ll get an instant spike in traffic to your site or landing page.

For e-commerce brands, this kind of attention is quite valuable. The promotion gives you a chance to introduce your product to your visitors without them questioning their expenditure. And since the participants are voluntarily viewing your products, the traffic quality is much higher than with paid ads.

They warm up cold leads and improve conversion pathways

Not everyone who visits your store is ready to buy, and that’s okay. Prize promotions allow you to reel in those cold leads easily. Instead of telling them to buy, you are inviting them to engage with your brand and stand a chance to win free prizes. They only need to do a few things, and that acts as the first touchpoint with your brand for many participants. Just like that, the relationship has begun.

Even if they don’t win, you can email them with a discount. They’ll be glad to stick around, and they’ll then start seeing your products in your newsletters. At the end of the day, this creates familiarity with your brand and results in an online sales boost.

They help you grow a compliant, engaged email list

Prize promotions usually enable a brand to expand its subscriber list significantly. But these aren’t just subscribers who are looking for free prizes. If you structure the promotion well by offering your products or a gift card to your store, it will attract people who genuinely have an interest in what you sell. Even if they’ve never come across your brand, they are now interested in trying it out since they aren’t spending.

The best thing about this is that to qualify for the prize, they’ll have to interact with your brand in different ways, which helps familiarize them with it. For example, the prize promotion can require a user to comment on your post and visit your website to fill out a form. Because of this interaction, they remember your brand (fondly) when you send the first newsletter.

They create social buzz and earned reach

Prize promotions are known for sparking conversation. When there’s something interesting, like a chance to win something for free, participants often tend to share it with their friends and followers. This means tagging friends on social media or sharing the link with an inner circle of friends.

What makes this powerful is that the recommendation is coming from real people, not the brand itself. This dynamic helps build trust as people already know the person sharing, and it also introduces you to a new audience that might otherwise not have found the campaign.

Many promotions also offer bonus entries for people who share with or refer friends, which encourages them to share even more, giving your store significant visibility and an online sales boost.

They strengthen brand affinity and repeat visits

Prize promotions create positive experiences for people and help them feel connected to your brand. When someone enters the sweepstake, they are engaging with your brand, not just hoping to win. And since they are doing so in a way that feels personal and fun, it leaves a lasting impression.

Even if they don’t win, they will perceive your brand as one that gives back and makes customers feel appreciated. This kind of goodwill builds trust and improves online e-commerce sales by making people more likely to return to your store in the future.

Ready to launch prize promotions that boost e-commerce sales?

Work with us at Promosfera as we understand what works, as well as the legal, strategic, and creative sides of prize promotions. We’ll walk with you from planning to execution, helping boost sales and long-term growth.