You’re throwing a referral contest?
There’s no doubt about it — a referral contest is one of the best and fastest ways to grow your business. When executed perfectly, the clouds part, the angels sing and you have a bountiful harvest of qualified leads ripe for the pickin’.
However, there’s a dark side that you have to watch out for when running a referral contest. It’s called fraud, and it can happen to you.
Let’s discuss the important fraud protection strategies you need to know to avoid getting burned.
Protect Yourself From the Beginning
Throwing a contest, especially your first one, can be daunting. You want it to go well and you definitely don’t want to waste your time (and resources) on a dead in the water referral contest.
That’s why we highly recommend that you start with one of our high converting and fully customizable landing page templates. We’ve built our landing pages to include all the terms and fine print you’ll need to protect yourself when running a referral contest. You can also download the Official Contest Rules template as a freebie at the bottom of this post.
Let’s go over a few of the more technical details on the Official Contest Rules template:
Eligibility: Discuss who may or may not enter your contest. You may place a stipulation that employees (or immediate relatives of employees) cannot be enter or be considered for a prize.
Contest Period: Make it clear when your contest begins and ends. There should not be any ambiguity.
Explain the Rights of the Sponsor: Your business will most likely serve as the sponsor of the contest, unless you partner with another business. Explain that the sponsor can disqualify a contest participant who is found to be committing fraud, and that participant can also face legal consequences.
Limit Your Liability: Make sure that you include a release of liability. Things happen, whether it’s a website crash or human error. You need to be protected from litigation in-case something happens outside of your control.
Here are a few other things to keep in mind:
Understand what the law requires of you
Just because you’re running your referral contest on the Internet doesn’t mean the rules don’t apply to you. Some states have strict contest rules that define eligibility, terms and prizes. You will definitely want to check with your state or the federal government for more information, but until then, you can also check out these valuable resources:
Explain how personal information will be used
You need to be clear about how you’ll use the contest entrant’s personal information within and beyond the scope of your contest. If you will automatically subscribe them to your email list, put it in writing and place it prominently. If you will share their email address with your marketing partners, they need to know that, too. Shoot for transparency, even if it’s in the fine print.
Explain what you consider fraud
It may not be clear to all of your contest entrants what is considered fraud, so it’s your duty to explain it to them. Additionally, some brands have a stricter definition of fraud than others, so define the terms of your contest contract.
Explain how you deal with fraud
You should also explain how you’ll handle contest entrants who’ve been suspected of fraud. Will you suspend their account and disqualify on the spot? Will you notify them by email? Will you accept a personal appeal?
Here’s How to Protect Your Contest From Fraud
1. Be Aware of the Different Levels of Fraud
If you’re running a contest, here’s a harsh reality you must face: some unscrupulous people will try to game the system. It’s unfortunate, but it is something you should prepare yourself for. By taking a proactive posture and implementing a fraud management strategy, you’ll won’t be blindsided.
So, let’s take a look at a few different types of fraud you’re most likely to encounter when referring a referral contest:
- Providing a fake email address
Some people may give you a fake email address, especially if you’re giving away instant prizes for joining your contest. The best way to remedy that is with our Campaign Lead Verification. All new contest participants will need to verify their email address before joining your contest in a process known as a double opt-in email.
- Providing a fake temporary email address
We’ve all seen those fake “burner” email address that people can use and “throw away” after double opting in to your contest. Well, we’ve got the remedy for that, too. It’s called Email Status Flags. We’ll give you a head’s up in your Leads Report when we encounter a known fake email provider or receive a bounced email.
- Creating multiple fake referrals
If you’re providing rewards for the most referral sign ups, what’s stopping your contest participants from creating multiple Gmail or Hotmail accounts, and using those fake addresses to bolster their stats in your referral contest?
Our Advanced Fraud detection feature!
Lead Filtering ensures that every participant must have a unique IP address before they are added to your campaign. Duplicate IP addresses will be flagged for fraud and will not count towards the contestants’ stats. You’ll also be notified of duplicate IP address of your Leads Report.
You’ll still be able to whitelist IP addresses for those on a shared network, such as an office or a public workspace.
All of these options are available as part of our Advanced Fraud Prevention package, available to Business and Enterprise accounts. Sign up risk-free for 30 days now.
2. Put a Limit on Your Contest
We all dream of going viral, and your contest may reach beyond your wildest projections. I hope it does. But, you should definitely be prepared in case things go “too viral”.
Instead of offering unlimited prizes to any and all who join your referral contest, considering limiting the number of participants who can receive incentives. For example, cap your incentive considerations to 2,000 people to keep control over your budget.
3. Give Away Something Related to Your Brand
Do you know how many contest junkies are out there? They don’t care about your brand at all. They only signed up so they could get a chance at the free iPad you’re handing out to your contest winner.
And, this is why you don’t give away iPads.
Instead, you need to generate actual leads for your business. You need your contest filled with people who will actually consider doing business with you in the future, not free iPad hunters. So, choose a prize that directly relates to your brand. This will activate people who will genuinely want to work with you in the future.
4. Automatically Deliver the Good News
There’s nothing like running a contest and then forgetting to send out reward notifications to the winner(s). Not being punctual when announcing your winners is one of the quickest ways to bad press. You’ll come off looking shady even if it was an innocent overlook on your part.
Here’s the good news: You can use our Reward Milestone Emails feature to automatically deliver the good news to your contest participants.
Let’s talk about why Milestone emails are so killer for your online referral contest:
Milestone emails keep your contest participants engaged in the process.
There’s a tendency for people to fizzle out or simply forget that about your brand and their participation in your referral contest. By sending Reward Milestone emails whenever the participant reaches a key point milestone, they are instantly brought back into the game, which leads me to my next point:
Milestone emails help to further gamify your referral contest.
If you want to generate a mood of excitement and anticipation, start sending out those Reward Milestone emails. People are motivated by rewards plain and simple. When you remind that they’ve done enough to earn a reward, they’re going to want to do more– especially if they know what the next level is.
Milestone emails keep people engaged with your brand.
Moving beyond the contest, Rewarard Milestone emails are also useful for top-of-mindedness. The more rewards you give away, the more valid excuses you’ll have to land in your participant’s inbox.
So, you’re probably wondering, what type of incentives should I offer my contest participants. Here’s a partial list:
As an extra courtesy, you’ll probably want to inform your winner privately before posting the win to other contest entrants.
Read more Referral Programs with the next chapter:
9. Shopify Referral Program
Increase Shopify store sales with KickoffLabs' guide to creating a successful referral loyalty campaign.
