Facebook Contests: Good Business Sense?

There's a reason Facebook contests are so popular for brands these days. It's the latest strategy for businesses to build their fan base, create brand loyalty, and collect data. According to a survey conducted by Shortstack, a developer of custom applications for Facebook Pages, almost 60% of Page Admins had created a Facebook contest on their business Page and over 80% of those that did, said that the contest helped meet their goals. The number one goal being to increase the number of page likes. The survey also discovered that running these contests expanded fan count by almost 30% on average. With numbers like these, why isn't everyone jumping on board?

An increase in fans does not always translate to an increase in sales. First consider the obvious, people like free stuff. When you offer people free stuff, they like you. Most of the time, people are liking your page just to be a part of the contest and not because they want to interact and read your content. This means they are likely to either hide your updates or unlike you after the contest is over. I am highly guilty of this. Because Facebook users spend a majority of their time on their News Feed it is important to ensure that you keep their loyalty. Give them incentive to continue following your business so you can further reach out to them as well as their Facebook friends.

Facebook's Promotions Guidelines are scary and difficult to deal with. Yes, Facebook is cracking down on contests and will even shut down your page if you don't comply with their rules. If you're asking people to like your page to enter to win a contest, it's a violation. If you require fans to comment or post a picture as a condition to enter to win a contest, it's a violation. If you ask people to answer trivia questions on your Facebook wall in order to win a contest, it's a violation. What's the safest way around this? Work with third party applications to implement your Facebook contest on a separate tab, not on your Facebook wall and be sure to position it correctly: “We're having a contest for all of our loyal Facebook fans.”

So, do Facebook contests make sense for your business? With proper execution and a well planned campaign, I think they could have major payoffs.