Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
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.
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.