Harness the Competitive Spirit

Posted by: Today's Tip Contributor on February 24, 2011

Everybody wants to win but all-too often, small business owners do not make proper use of contests and other competitive events to draw customers into their businesses. Let’s look at two examples that demonstrate how competition can benefit your customers and your business.

1. American Idol. If nothing else, it is a terrific social experiment and a boon to the record labels. TV show aside, the concept boils down to simple crowdsourcing of talent:

• Offer a prize: A bit of money and a record deal

• Conduct the contest: People try out and are screened by experts and the audience

• Reap the rewards: Sell music produced by the winner, knowing that customers already want to buy it. Customers get music they want, along with insights into their artist’s struggle. Win-win

2. Netflix. The mail-order movie giant got statisticians from all over the world to pour countless hours of work digging through Netflix’s data in pursuit of a $1 million purse. What may sound technical boiled down to the same three pieces as the American Idol example:

• Offer a prize: $1 million

• Conduct the contest: Anyone could submit. Contestants had to beat Netflix’s recommendations by 10 percent

• Reap the rewards: Create better recommendations and foster better customer loyalty. Customers are more likely to discover movies that they like. Win-win

No matter what business you’re in, there is an organic and genuine way to connect with your customer community through some form of competition. If you’re a baker, have a chocolate chip cookie contest. If you’re a retailer, have a store-design or new-product-idea contest. Offer a compelling and coherent prize, run a fair and clean contest, and let your community share in its reward.

Vik Venkatraman
Founder
V Bespoke
New York

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