Is contest for growth a bad idea?
I've just launched a contest for Scooget.com and is beginning to doubt its effectiveness to gain real traction (though I will definitely see it through). First of all, I can't really tell if there's product-market fit by using prize to attract users, not to mention shortening my runway by burning cash. Also the effort to do so is pretty significant and is kind of like a side project within a side project. There's a host of marketing to be done; Reddit, HN, Twitter, IG, Discord etc. and is pretty overwhelming with still not much to show for. Am I doing it wrong or should my time (or money) be better spent elsewhere?
Contests do not work to non targeted personas. And if you run a public contest, 90% of traffic will come from non-targeted personas. Internet bots will ruin your day.
Mostly the contest does not work.
I once ran a startup that did this exact same thing, so it was funny to see this (talking about the clickable products in the pictures).
We went from 0 to 7k Instagram followers in 3 months, got over 20k visitors in that period, and we simply just focused on FB + Instagram (oh, and earned around $40 haha). We did 0 giveaways, just all organic traction through viral content marketing.
If you want, I can do a bit of a write up on how we managed to do that. Will take me a bit of time to get it all together.
Anyway, you're not really using any gaming prices to get people there. They're all cash prizes. Which really will also attract non-gamers who steal some random picture from the internet to have a shot at that cash prize.
I'd focus a lot more on creating a community instead of giveaways. Giving away $2000 per monthly contest is huge. Seriously, I hired a social media marketer for 10 hours a week for that money - and $2000 would pay for 4 months of hiring that marketer. Top 5 part-time hire I ever had too.
It sounds like you may have answered your own question. I would say, limit the scope of the contest (if you haven't already made too many promises) and closely evaluate the results. Set KPIs so that you know exactly what you hope to achieve and if the contests don't work, be willing to stop.
You have to be willing to experiment from time to time in order to learn new strategies. But, set boundaries for yourself so that you don't fall prey to sunken cost fallacies.
Hey thanks Parker, think you are spot-on and sunken cost fallacy is easy to understand but really hard to get out from 😅