Theres another factor thats even more critical in determining the right balance of prizes in your promotions planning:
Customers vs Non-Customers: As part of your online promotion strategy, you may run a promotion that targets current customers who are already brand loyal, to encourage continued or incremental purchasing. On the other hand, your promotions planning may target consumers who currently prefer another brand or are not currently purchasing in your category to try to entice them to purchase your product instead.
In the case of non-customers, promotion consulting research shows that a larger number of lower-value prizes will work best. This is because your targets currently perceive a negative overall value of switching to or otherwise purchasing your product (or they would already be doing so), so they need the assurance of readily available prizes in order to expect a more positive outcome from your product. In considering these targets as part of your online promotion strategy, offer several small but desirable prizes to encourage them to switch to your product, which will erode their negative perceptions and encourage them to purchase.
With current customers and brand loyalists promotion consulting research shows that the opposite is true. They already expect a positive outcome from purchasing your product, so the prize is just icing and serves to increase their brand preference. So in general, these customers will be more interested in the possibility of winning a single large prize. Your promotions planning for current customers should offer only one valuable prize.
Thinking about these factors will get you started in the right direction. There are many other variables that go into good promotions planning, and the best strategy should be determined on a case-by-case basis as part of your overall online promotion strategy.
AlterSeekers is a brand promotions agency in New York focusing on online promotion strategy, promotion consulting and promotion planning, web strategy, social media marketing (including Facebook strategy), go to market strategy, and overall strategic planning. For more information see www.alterseekers.com.