Let’s face the facts. Today’s sluggish economy requires creative ways of engaging customers with your brand. Promotions and contests can be strong vehicles for brand exposure, but you need to be aware of the legalities so you can execute your promotion or contest successfully. To avoid being fined as an illegal lottery, you need to eliminate one of three elements to be legally compliant: prize, chance or consideration.

• Prize - Nobody wants to enter a contest without winning anything, which makes this element the most difficult to eliminate.

• Consideration - According to NOLO.com, “consideration is a benefit or right for which the parties to a contract must bargain; the contract is founded on an exchange of one form of consideration for another. Whatever its particulars, consideration must be something of value to the people who are making the contract”. In other words, the contest entrant must provide something to the contest sponsor in order to participate. For example, the customer may be asked to purchase a product in order to be eligible for the contest. Another example would be to ask a customer to fill out a lengthy questionnaire or provide information about themselves. Consideration can be eliminated by mailing in a postcard or calling a toll-free number instead of making a purchase.

• Chance – This usually takes the form of a random drawing or raffle. You  can be eliminate chance by awarding every entrant a prize or offering a game of skill where winners are selected on knowledge, expertise or ability. An example of this would be a poster contest or best homemade dog treat recipe.

You need to be careful when holding promotions and contests that require user-generated content such as photos or videos when engaging your customers. The reason for this is you don’t know if the person who created the photo or video owns the rights to it. (These rights are usually referred to as intellectual property rights). Another consideration is if the person submitting the work has model releases or who gets sued for false statements?

Here are a few other key notes to remember when operating your own promotion or contest:

• State eligibility requirements plainly and run the contest in accordance with those rules. You only need something simply stated like, “Eligible to all U.S. residents or Hawaii residents”.
  

• Hire legal counsel to draft the rules. It’s sound simple, but most business owners think they can do anything themselves. It’s better to outsource the work to be certain the contest rules are legally firm.

• Pay careful attention to government regulations. Make sure your program is in compliance with Section 5 of the Federal Trade Commission regulations governing business practices.

• Use language anyone can understand in the contest’s rules and regulations. There is nothing more annoying that wanting to win a contest and not understanding what you need to do in order to participate. Don’t alienate your target audience. Plainly state what action(s) they need to take to participate in the contest, how they will receive their prize, and how they can reach a customer service representative.

• Provide a compelling value to your recipient. No one will participate in a contest that doesn’t hold a compelling value to them. Offer to your audience a complimenting service or product. For example, receive a memory foam insert with every dog crate you purchase from now until Christmas. Customers are only motivated by bargains and good deals.

About the Author
Dara is a brand identity and marketing design strategist at 7 Lucky Dogs, a leading consultancy in marketing to “pet parents”. Through customized marketing and brand identity packages, 7 Lucky Dogs helps you discover what makes your company, product or service different from your competitors. We then translate this differentiation visually into a logo, product packaging, an E-commerce site and promotional materials to reflect those unique attributes. We make our clients look credible and memorable to their prospects while they increase their bottom line. As the owner of 7 Lucky Dogs, Dara is passionate about helping independent pet businesses stand out in front of their competitors and attract more clients. She blends business smarts with creativity with over ten years of design experience with formal education in both graphic design and marketing.