For a lottery event, should we set up “giving out more small prizes” or “drawing a lucky big prize”?

The 2020 Double Eleven has come to an end, and major e-commerce companies have already released this year’s battle reports and announced their transaction volumes to make their presence felt for the last time.

Behind this series of "new record" numbers, various e-commerce teams have racked their brains to try to empty consumers' wallets. Take Taobao as an example: adopting a star cat, discount allowances, store coupons, doubling the deposit, limited time discounts, flash sales, limited quantities... There are so many discount methods that the discount rules become very complicated.

In addition to these preferential methods, there is another method commonly used by e-commerce companies - lottery.

When it comes to lotteries, the draw amount and gameplay are worth discussing. Should we adopt the lottery rule of "more small prizes", that is, the prizes have low value and the number of winners is large, or should we adopt the lottery rule of "drawing a lucky big prize", that is, the prizes have high value and the number of winners is small?

What is the difference between the impact of these two prize settings on the effectiveness of the event?

First of all, whether it is "drawing a lucky grand prize" or "giving out more small prizes", there must be a prerequisite - users are willing to participate. So under what circumstances are users willing to participate in the lottery?

Here are two counterexamples:

"In the past two years, the rules of Double 11 have been more complicated. Last year, I only got 2 yuan after participating, so I didn't participate at all this year."

“The prizes are not valuable and the lottery format is cumbersome, so I would rather not participate.”

Every user has a relatively vague understanding of the value of his or her own time. The cost paid by the user each time a lottery is drawn can be reflected by the following perception model:

Cost = time spent to achieve the lottery conditions * unit time value

For different costs, users will tend to make different decisions:

1. When the cost of the lottery is greater than the value of the gift, users tend not to participate in the lottery
2. When the cost of the lottery is less than the value of the gift, users tend to participate in the lottery

Therefore, users decide whether to participate in the lottery based on whether their efforts can bring them more (or equal) rewards.

Let’s discuss the differences between these two types of prize settings, and then take Double Eleven as an example to talk about which one e-commerce should adopt for lottery activities.

1. Draw the lucky prize

According to the perception model mentioned above, when the value of the gift is high, it can attract more groups with different time value perceptions to participate in the lottery.

Then, the influence of choosing to draw a lucky prize on the activity effect can be reflected in the following three points:

1. Attract customers with high benefits and drive action

The platform can use the "high interest" feature of the lucky grand prize to drive users to do more complex things, such as broadening the level of user sharing, which can be through activities such as forwarding, commenting, liking, sharing with friends, and requiring a certain number of friends to help.

This will allow more users to participate, and use social media to spread the word about the lottery, thereby attracting new users.

2. Herd mentality

Prizes with high value can attract greater attention and increase visibility.

At the beginning, not many people knew about the event. They thought that since there were few participants, the winning rate would be high, so they were extremely enthusiastic.

Gradually, people who have not participated will want to try it themselves when they see so many people participating. Even if the number of participants gradually decreases, people's attention will not necessarily decrease, and they will continue to pay attention to who wins the grand prize.

This is simple herd behavior.

3. Imagination space. When the prize is high, it will make people fantasize.

Choosing a very large amount of money to attract users' attention can generate more exposure and topic volume than simply giving out multiple small prizes.

There is a gambler mentality in human nature. Drawing a lucky jackpot gives people room for imagination. They will actively participate with the mentality of "what if I win?" At the same time, it arouses their desire to buy, further increasing the possibility of a transaction.

At the same time, there are some drawbacks to the lucky draw rule:

Many users will express doubts about the fairness of the lucky jackpot. In addition to the low winning rate, how to eliminate users' distrust of the authenticity of the event is also a difficult problem. Many people will doubt whether the winner is pre-determined and whether someone actually got the prize.

2. Give out more small prizes

If the effect of drawing a lucky jackpot is to attract new customers, then the effect of giving out multiple small prizes is to promote activation. The former is to attract people's attention, gather people together and quickly divert traffic; the latter is to increase user participation and increase user favorability.

1. Enhance everyone’s sense of participation

The unit investment cost of giving out small prizes is low, but because there are so many winners, everyone can win prizes by simply participating, which enhances everyone's sense of participation.

2. Increase user favorability

On the other hand, giving out small prizes is not only to attract users to participate in the lottery, but also to attract users to consume. Even if it is the value of a bag of salt, it can make users feel the real reward, thereby increasing user favorability.

3. Cooperate with marketing actions to amplify benefits

Since the prizes are of low value, it is very important to take advantage of active time periods and launch some effective marketing campaigns.

For example, use the peak of attention activity to make precise marketing push, launch more differentiated marketing activities to stimulate user purchases, etc. The cost of the prizes can even be paid from the profits from users’ repeat purchases, which is very cost-effective.

The disadvantages of giving out multiple small prizes also exist:

Users are becoming increasingly tired of these small prizes and are less and less interested in participating. One is that the probability of winning cannot be 100%. Another is that even if you win the prize, if the value of the prize is too low, it is easy to attract complaints.

Once sharing is involved to broaden channels, the number of participants will be greatly reduced. But if you just click the like button casually, the help it can provide in attracting traffic and increasing user stickiness is minimal.

3. Thinking about the rules based on Double 11

Thinking 1: Choose to set up "more small prizes"

First of all, users have no idea about the winning rate of the lottery. Choosing prizes with low value and a large number of winners can increase users' credibility in the sweepstakes and the platform, and enhance users' enthusiasm for participation.

Although "the prizes are of high value but the number of winners is small", the prizes are more attractive to users to participate, but if users do not win the prizes, they will doubt the winning rate and authenticity of the lottery, which is not worth the loss.

——Little Fatty

Thinking 2: Choose to set up "Lucky Prize"

1. Given the user base of Double 11, if the platform wants to offer low-value and widely distributed prizes, the value of the prize for a single user will definitely be extremely low, perhaps only a few cents (capped at a few dollars). As a user, would you be tempted?
2. The Double 11 event itself has attracted enough attention, and there is not much need to attract users through low-priced and widely distributed prizes.
3. If you want to make prizes with low value and high winning rate, it is better to put the budget directly into the overall discount, 300-40, adjust to 400-50, and you can also increase the customer order, isn't it good~
4. Users have different psychological expectations, and they will still buy what they should buy. If I can give me a prize that may not even be a fraction of my shopping amount and a prize that may exceed my shopping amount, users will definitely prefer the latter. Assuming the prize budget is 100 million, 100 million 1 yuan prizes and 10 million 1,000 yuan prizes, which one would you prefer?
5. The sustainability of overall interests. Low-value prizes cannot stimulate users to pay secondary attention to the platform, but high-value prizes can do that. To think of the activity in a simpler way, after Double 11, we will draw prizes from 100,000 users who placed orders on Double 11 every day. The prizes will be announced every day and will last for one month. In this way, the platform activity in the month after Double 11 can be well guaranteed.

—— Daniel Wu in Kuramae

Thinking 3: Mixed Use

There will be a final lucky jackpot, but there will also be small prizes at certain stages.

The only grand prize represents the lucky koi. The total value is set at a huge amount and the amount is random in order to maximize the effect and use gambling psychology to stimulate the attention of new customers.

Small periodic prizes lower the threshold for participation. Pyramid selection and inverted pyramid awarding, the top 20% share 80% of the total prize value, and the remaining 80% share 20% of the total prize value.

Gradually increase the periodic prizes within the budget so that those who have not completed the task can also get part of the benefits in the process of participation, exchanging time costs for benefits. The deeper the participation, the more benefits will be obtained.

In this way, both dissemination and effect are achieved.

——sai, fish that loves to eat cats

Conclusion

You can choose one of these two lottery rules or lean towards one of them depending on the purpose of the event.

Simply put, sales = quantity × unit price.

In other words, if you want to increase sales:

• Either more people buy things - adopt "lucky draw";
• Or each person buys more things - adopt the approach of "giving out more small prizes".

Of course, some friends said this: In actual operation, few people use only one of the lottery methods, they all use a mixture. After all, this is about making money, not doing AB testing.

Author: Tiantianwen Topics Selection

Source: Tiantianwenhua