Running a Successful Giveaway in a Highly Regulated Industry

Josh:
All right. It looks like we are recording. Hi everyone. My name is Josh Ledgard, I'm from KickoffLabs. With me today is Daniel Paul from NOBO. NOBO is a cannabis retailer/dispensary, and they've recently wrapped up a contest on KickoffLabs, so I wanted to talk to them a bit about that contest and the process. Some of the things that are special about doing it from their specific industry, which might be important for others in this space if they're looking to do something similar, but first of all, Daniel, thanks for being on the show.

Daniel:
Thank you for having me. I'm excited to be here.

Josh:
Yeah. So people can get a little bit more information about you, can you tell us about your background? What led you into the cannabis industry?

Daniel:
Yeah. So I am an old school agency guy always working for the client, representing them through the agency, and I had been working with NOBO as a client and one day they said, "Hey, we're about to open up four stores in Michigan. Why don't you come do that for us." And I'm like, "Hmm." Hadn't thought about it too much, but making a leap from the agency side to the client side was appealing, especially in a very fast growing, fast moving industry. So I just jumped at the opportunity to hone my skills in a brand new industry with lots of different rules and opportunities.

Josh:
Cool. So, what's something interesting that you learned jumping into the industry that was different from working with clients?

Daniel:
Specifically cannabis, one of the things that's the hardest is that each state in which it's legal, the rules are different. Whether it's packaging and how things have to be packaged, to how things can be sold or even referenced, so in the state of Colorado which is one of the first states, all of the retail locations are called dispensaries. Whereas in Michigan, you cannot use the word dispensary, you have to use the word provisioning center and not a lot of people new to the industry understand what a provisioning center is versus a dispensary. So it's just getting used to the rules and then state by state, if you sell tires pretty much the rules are the same state by state, whereas selling cannabis the rules are different state by state.

Josh:
Interesting. Yeah that makes it challenging compared to just having maybe a clothing retail store or something where you don't have to call it clothing in one state, but apparel in the other.

Daniel:
Right. Exactly and it's funny and we'll get into it, but for the contest we ran at KickoffLabs, because we're the state of Michigan and we're surrounded by states where cannabis isn't legal, we had to make sure that the contest was only open to residents of the state of Michigan. So, although it was exciting to customers from other states, we couldn't assign a winner. So running state only contests are never the most fun.

And I got to tell you, it was a great move. It just was so simple and easy to work with KickoffLabs, even in a highly regulated industry like ours is, to do what we needed to do.

Josh:
So let's get into that. How did you find KickoffLabs? What was your goal in mind when you started searching for a product?

Daniel:
We intended for one of the big cannabis holidays, 4/20, April 20th, so we wanted to do a big contest for 4/20 where we gave away credit at our store that could be used throughout the whole year. The key for us is making sure that it was really above board. It's not just a bunch of employees picking who the winner is and so we were working with an agency partner, Echo Boomer Design, who said, "Hey, you guys want to do a contest? We've done a very successful KickoffLab, so why don't you guys check them out?" And I got to tell you, it was a great move. It just was so simple and easy to work with KickoffLabs, even in a highly regulated industry like ours is, to do what we needed to do.

Josh:
Oh that's great to hear. Thank you for that. So, you've got the idea you want to run a contest. You were working with an agency partner. They recommended KickoffLabs and the contest was for store credit. So, let's talk about the contest setup. So what specifically did you do to set up the contest?

Daniel:
Well, and it will seem backwards but it was the most important to us, was jumping in and starting with what the rules were. What were the rules and regulations that we could; could we even run a contest in the state of Michigan that gave away store credit?

Josh:
Yep.

Daniel:
So ultimately yes it could but we had to put in, again, the caveat that it could only be awarded to a winner in Michigan, they had to be older than 21. So those were really the big things so we really just had to go review the rules, make sure they were really crystal clear, and then it was sitting down and going through the editor and just building out all of the assets and everything we needed to make the contest work right, get the embed codes, and put them into our website.

Josh:
Mm-hmm (affirmative). Cool. So can you tell me how you promoted it within your website then? Cause I can see on your KickoffLabs account, you do have a signup page that's set up there, but it looks like you probably also embedded the contest within your website. So can you tell us about how you embedded this into your website...

Daniel:
Yeah. So...

Josh:
And you can tell everybody what your website is too so they can...

Daniel:
If you're in Michigan, come by NOBOgoods.com. So during the time that the contest was running, we had a popup window that would pop up on your first visit that would say, "Hey! Enter to win the contest," and so that was a popup. We also had a dedicated page where we could send paid media traffic too that was a contest entry page. So we texted out and emailed out to our existing audience, who we talked to all the time, and said, "Hey, we've got this great big 4/20 contest. You could win $420 worth of store credit at our store. Go here to enter." But then we also did do paid media through Weedmaps, as well as external sites that allow for cannabis advertising, and ran the promotion that way. So, we spoke to our own audience but then to get new people into the top of the funnel, we promoted across the internet to those who were previously inclined to consume cannabis.

Josh:
Okay. So you've got the embed and the popup going on your website, and then you also built a separate signup page that had basically the same mechanics on the signup page where you were asking for... Let's see, I have this up here. It looks like you were asking for...

Daniel:
Name, email address, phone number, and are you a legal resident, 21 or plus, of the state of Michigan?

Josh:
Yeah.

Daniel:
I think we wanted to make it really simple.

Josh:
Yeah. So the form is super simple, but this is something that I tell people when people ask, "Oh can you capture their location within KickoffLabs?" And I say, well if it's critical for the contest, like it's part of your rules, you should probably force them to say, do you live here or do you live in this area?

Daniel:
Yeah.

Josh:
So you did that and it didn't look like from your conversion rate that really lowered the conversion rate that you were seeing...

Daniel:
No.

Josh:
...On the form, and then people enter the contest and then they could earn more entries and improve their odds of winning with some of the KickoffLabs and the contest mechanics we had.

Daniel:
Yeah.

Josh:
So it looks like you guys chose, telling your friends, liking us on Facebook, following us on Instagram, and following us on Twitter. So, let's talk about the results then from the setup and then we'll get to kind of some more about managing the contest in process. From your perspective what were the results of the contest?

Daniel:
They were really good. If I'm remembering right now it's a month ago and so I've got a week brain. I think we got almost 9,000 entrants.

Josh:
Mm-hmm (affirmative).

And that's really what we were looking to do is really widen that top of funnel.

Daniel:
Which was key for us. The other thing we did in asking for the people's info is we also had them check and agree in the rules that we could then use that entry information for marketing purposes, which was key and you have to get that permission. So once you entered, we got your permission. We did that. So we got about 9,000 entrants and we got four winners. We picked four winners as we said we would and so far the response has been really good. I mean, we got a lot of people say, "God, I hope I win." We got a fair number of people who shared to increase their odds of winning, so that was good.

Josh:
Yep.

Daniel:
And that's really what we were looking to do is really widen that top of funnel. We talk to our own customers, but how do we get more people to know who we are?

Josh:
Yep.

Daniel:
So that really helped us when people would do that. Now cannabis is a weird one. Either some people are very active and proactive about saying, "Hey, I'm a cannabis user, come join." Others still kind of look at the stigma of it and stay away from promoting and sharing that they're entering the contest, but overall we were very happy with the contest.

Josh:
Yeah. I can see, if you narrow it down to people sharing the page, you had 20% of people were coming from a share link, but for the overall contest it was a little bit lower than our average, which is what I would expect. It was closer to 5-10% of your leads were coming from sharing, but as you said, I would expect that because it's not the kind of thing where everybody's going to go and feel comfortable immediately promoting that online.

Daniel:
Yeah.

Josh:
So just getting a little bit is probably helpful.

Daniel:
Yeah.

Josh:
Did you see any, besides the email audience growth, did you see audience growth on your other channels as part of the contest, of people just more passively taking the follow steps?

Daniel:
Yeah. We actually, I don't know if it shows there, but one of the things we did is everybody who entered as part of their thank you for entering, got a discount on their next purchase. So it moved people to come in, so we gave people a pre-roll or a pack of gummies for a penny once they entered the contest. So we did have a fair number of people come in and redeem that email follow up so that was pretty good, and I think if I remember right, I think about 20% were new customers that came in. They were not previously in our database.

Josh:
And in a short amount of time. So this was, the contest spanned, you basically did a month leading up to 4/20 it looks like.

Daniel:
Correct.

Josh:
And so in the span of a month, to get a 20% increase in the audience size seems like a good result.

Daniel:
Especially in a very noisy period. Every other dispensary or provisioning center in Michigan was running some sort of promotion so that's why we wanted to make it bigger and not just day of.

Josh:
Yep.

We did a lot of paid media on network sites that allow for cannabis advertising. So we did a paid programmatic buy with the agency who introduced us to KickoffLabs, to go and get people who had previously searched for cannabis, had been to cannabis locations, so that we knew that they had a higher proclivity of entering the contest and it would be less wasted.

Daniel:
But we kind of wanted to create this build towards something that was coming.

Josh:
Yep. So now, sorry, obviously you guys emailed your existing email list and told them about the contest. What other things were you doing to promote the contest?

Daniel:
We did a lot of paid media on network sites that allow for cannabis advertising. So we did a paid programmatic buy with the agency who introduced us to KickoffLabs, to go and get people who had previously searched for cannabis, had been to cannabis locations, so that we knew that they had a higher proclivity of entering the contest and it would be less wasted. So that helped us get to people who may have never visited us before, but were excited, we hope, to see a cannabis based advertisement.

Josh:
Yep. I can see that, and so how much money would you say you spent in advertising for the campaign? 

Daniel:
We spent about $12,000 on top of the contest, and remember cannabis is still, you can't just go to Google and buy media on Google for cannabis. So we had to go use a network that is open to cannabis content.

Josh:
Got it. I can see that in the referrals coming in.

Daniel:
Mm-hmm (affirmative).

Josh:
Cool, so then you picked a winner and then just...

Daniel:
Four winners.

Josh:
Yeah you picked four winners, and then it sounds like you followed up with people afterwards and I think you kind of went over that really quickly so I just want to make sure people hear this. So it wasn't just that it was over when you followed up with the winners, but then you also offered an additional promotion afterwards to people that had...

Daniel:
Well, no, no. During the promotion.

Josh:
During the promotion.

Daniel:
So when you signed up, they got an email back that said, "Hey, thank you for signing up for NOBOs contest. Good luck but by the way, before entering, we're going to give you a pre-roll or a pack of gummies for a penny. Just stop into your local NOBO Retailer to get that."

Josh:
Yep.

Daniel:
So we got those who already were customers that did it, but we got a fair number of new customers who came out of that as well.

Josh:
Cool, so did you tell people that before they entered their information, as a bribe for getting them to enter their information?

Daniel:
Oh yeah. Absolutely.

Josh:
Or is that something they found out as a surprise afterwards?

In fact, because of what KickoffLabs offers with the identity and the fraud support, we were able to really weed out a lot of people who loaded up on email addresses trying to win, and that was really one of the things that we wanted to do.

Daniel:
No. We told them that for each entry you get a pre-roll for a penny.

Josh:
Cool.

Daniel:
Yeah. What I wanted to avoid were the contest chasers but because of the unique nature of the contest, because it was only open to Michigan, because it was only really for store credit, we didn't have a lot of store chasers. In fact, because of what KickoffLabs offers with the identity and the fraud support, we were able to really weed out a lot of people who loaded up on email addresses trying to win, and that was really one of the things that we wanted to do.

Josh:
Very cool. If you were to run another contest, what changes would you make from this one? So what have you learned from running this contest?

Daniel:
I may have had the entry period a little bit longer.

So yeah, I hate to say it, but working with KickoffLabs was phenomenal. It was so simple that it makes me want to do more contests and you don't always get that with a SaaS product, but it really was simple to do it with KickoffLabs, and I got to tell you it's the adrenaline.

Josh:
Mm-hmm (affirmative).

Daniel:
And that's pretty much it. Everything worked out really well.

Josh:
Mm-hmm (affirmative).

Daniel:
So yeah, I hate to say it, but working with KickoffLabs was phenomenal. It was so simple that it makes me want to do more contests and you don't always get that with a SaaS product, but it really was simple to do it with KickoffLabs, and I got to tell you it's the adrenaline. When the contest opened, four or five of us would go to that page...

Josh:
Yeah.

Daniel:
The entry page, every day, a couple hours a day, just to see how many people had signed up. How was our reach? What were we doing? So those were the things that were really interesting and exciting for us, was just watching people continue to sign up.

Josh:
I can always see on our internal stats, the contests that are currently running, cause you see the refreshes on the leads pages going up.

Daniel:
Oh yeah.

Josh:
People that just launch a contest, especially, they hit refresh on that page and I took a note to myself and I said, "You know, we should do something to make that page more fun." Every time they hit refresh, if there's no leads, just some animation that says, "Sorry. No leads this time but maybe next time."

What I would do is throw up hints or tips On how to increase the signups. "Hey, have you considered this?"

Daniel:
Well that would make me crazy because if I saw no growth in the leads, I would've started to freak out. So yeah, you got to do something. What I would do is throw up hints or tips...

Josh:
Yeah.

Daniel:
On how to increase the signups. "Hey, have you considered this?"

Josh:
Yeah.

Daniel:
"Did you turn on our referral friend process?" Or whatever it is. "How can we help you increase your leads?"

Josh:
That's a great idea of putting something more useful than an animation on the site.

Daniel:
Yeah. An animation...

Josh:
So actually incentives for doing that.

Daniel:
And you guys probably know...

Josh:
Yeah.

Daniel:
Hey did you know those people who refer a friend saw 20% growth in X, Y, Z. Whatever it is like that stuff.

Josh:
Yeah. No, that's a great suggestion. Thank you. Cool, so the one big advice I heard in the beginning was, especially if you're in a regulated space whether it be like alcohol, tobacco, firearms, or cannabis, is making sure you understand the rules and what you can do. Even outside of that is still important because there's always age restrictions...

Daniel:
Oh yeah.

Make sure it's crystal clear how to enter. Make sure it's crystal clear as to what you're going to win and the delivery of that.

Josh:
...And different states have different rules for running competitions, if you're running it within a state for a store especially, but what other advice would you give to somebody who's got, maybe not in a regulated space, but they just have some retail locations and they're thinking about maybe a contest is right for us. What advice would you give to that kind of person?

Daniel:
Make sure it's crystal clear how to enter. Make sure it's crystal clear as to what you're going to win and the delivery of that. If it's a physical thing, am I responsible for the shipping? The taxes? Anything along those lines. Make it really, really crystal clear. Ask people who aren't even in your business, does this make sense? Because we all think about it and we know what we're trying to achieve, but just take it to somebody else. I always call it my mom test.

Josh:
Yep.

Daniel:
I show it to my mom. I'm like, "Do you understand this? Do you know what you're going to win? How to win?" All of those things, so that's what I would do is just really make sure you're approaching it and are crystal clear on everything that you're doing.

Yes, and I think internally be crystal clear as to what your expectations are. What are your KPIs? What's going to be your measure of success?

Josh:
No, 100%. That's definitely the advice we give people. You hear people all the time think about oh, what if I have this kind of promotion or prize but then you've got to do XYZ to earn it, but then another prize where you do Z, Y and B to earn it, and I just always have to say, "Slow down. Let's just start with, there's a prize and you can win it, and here's how..."

Daniel:
Yes, and I think internally be crystal clear as to what your expectations are. What are your KPIs? What's going to be your measure of success? For us it was opening up the funnel. It was getting people back into the store and all those things, but really understand why am I running this contest? What do I want to get out of it?

Josh:
Yeah.

Daniel:
What do I want my consumer to get out of it, but what do I want to get out of it? And most retail locations, most people run it because they want to grow their business. That's fine, but what and how do you do it is really the question.

Josh:
Yeah and did I hear what you said in terms of how you want to get out of it, did I catch that you said you got 20% new customers who hadn't been in the store came...

Daniel:
Yeah. Exactly.

Josh:
...Because they were redeeming what they got for entering.

Daniel:
Correct.

Josh:
Awesome.

Daniel:
So that's why we put that in there. We gave it so that you would have to come back into the store.

Josh:
Yep.

Daniel:
But we also wanted to find a way, if you've never been there, could we motivate you to come back into the store?

Josh:
Yep.

Daniel:
Or come into the store.

Josh:
And did you guys track sales totals you got from people that came from the contest?

Daniel:
Yeah and I'm still running through those numbers to kind of see what it is. That was sort of secondary.

Josh:
Yeah.

Daniel:
We thought about it but it wasn't a primary driver on that...

Josh:
Yep.

Daniel:
...To increase sales. It really was a branding increase awareness. So yeah, we are still pulling through all of that to see what we could do.

Josh:
Yep. Cool. Anything else you'd want to tell anyone that you feel like we should have covered but we didn't?

Daniel:
No. Again, you guys made running a contest, super, super simple and that was key for us to do that. So that's what we're really happy about. So we would definitely do another contest through KickoffLabs.

Josh:
Well, obviously let us know if we can help you down the line, get up and review a contest before you launch it. We always love giving our two cents on things and promotions, so feel free to email us and we'd be happy to help out going forward. Thanks Daniel for...

Daniel:
Absolutely.

Josh:
...Joining us today. This has been a great conversation and I know if you're running a retail store, you could learn from some of these best practices that we called out today. Thanks everyone for listening and have a great day.