Marketers have a lot to gain from giving away valuable prizes to consumers. Contests and sweepstakes allow them to:
Create a buzz about the product -- With the rise of social media, word-of-mouth marketing can help make or break a product. Exciting events, such as contests and sweepstakes, encourage people to talk about the company and its products. It is a great, cost-effective way to extend your advertising reach.
Draw traffic to their website or store -- Some consumers may never have heard of your company before. So contests and sweepstakes offer these companies an opportunity to build brand awareness with such consumers.
Build an e-mail list -- Marketers usually give contestants a newsletter or mailing list opt-in option when they enter the contest or sweepstake. New names mean new potential customers in the long-run.
Perform marketing research -- Marketers can easily add a survey to a contest or sweepstakes entry form. The information gathered is just as valuable to them as the prize is to the consumer because it can help marketers better understand their target audience. This better understanding can lead to better marketing campaigns.
Strengthen their relationship with their customers -- People buy from people they like. Contests and sweepstakes allow consumers to interact with the company in a fun way and creates a positive image of the company and its products.