Do Giveaways Increase Sales for Small Businesses? (Answered)

Giving things away sounds like the opposite of selling. If you’re running a small business on a tight budget, it can feel like you’re handing money to people who’ll grab the prize and disappear. I’ve heard that concern from plenty of business owners who haven’t tried a giveaway yet.

The data tells a different story. Giveaways attract customers at a conversion rate of almost 34%, higher than most other content types. The three case studies below show exactly how that plays out in real revenue.

KnivesShipFree Giveaway Case Study

In one case study, KnivesShipFree saw massive success with its giveaway marketing efforts. They launched rolling monthly sweepstakes ahead of a new product launch.

Using OptinMonster, they created a series of lightbox popups to collect registrations from contest participants. Then, after entering the contest, they added participants to the company newsletter.

The results of this digital marketing campaign were mind-blowing. After only 3 months since launching the contest, KnivesShipFree added over 5,000 new emails to their list. That’s a direct result of engaging their target demographics.

Then, on the first day of launching their new product, they made over $10,118.20. What’s more, $4,373.04 came from first-time sales from the new subscribers.

It isn’t difficult to replicate this type of successful giveaway using a combination of OptinMonster and RafflePress.

RafflePress is one of the best WordPress giveaway and contest plugins on the market. With its built-in Grow Your Email List giveaway template, you can launch a giveaway to gather email addresses in just a few minutes.

Then, you can promote your giveaway using attention-grabbing Exit-Intent popups from OptinMonster, with a call-to-action button linked to your giveaway landing page to encourage more entries.

If you’re unsure where to start, here’s a step-by-step guide on how to do a giveaway to grow your email list.

Agile’ Marketing Giveaway Case Study

In another case study, Agile’ Marketing Services grew their email list by 52% with a giveaway.

Moreover, the giveaway generated a lot of engagement on social media. Because they aligned the prize with their target audience, they were able to both reward loyal customers and encourage repeat business to boost their revenue.

SeedProd Giveaway Case Study

If you need more proof of the power of giveaways to drive sales, take a look at this case study. SeedProd, the powerful drag-and-drop WordPress website builder, ran a giveaway over the Black Friday holidays for the chance to win a MacBook Air.

The campaign generated over 4000+ new users, translating to 3X their average sales. For a small business, that’s a significant increase in sales and expansion of their customer base.

Now you know that giveaways can increase sales for your business, let’s explore how to turn those revenue goals into reality while engaging your existing customers.

1. Grow Your Email List

Chances are the first thing you do when you wake up is check your emails. More than half of us check our email before doing anything else online, such as browsing social networks and catching up on the news.

Since emails have the highest open rates compared to social media, it makes sense to focus more of your efforts on email marketing.

RafflePress’s Grow Your Email List giveaway template is the easiest way to boost list subscribers. When launching the template, your giveaway widget is automatically populated with the Join an Email Newsletter action to encourage users to opt in for a chance to win.

As we mentioned earlier, when you get users on your list, it’s much easier to nurture them through your marketing funnel and turn them into customers to increase sales. For example, you can email coupons and limited-time offers to pique their interest.

So, do giveaways increase sales? If you use your email list effectively, they certainly do.

2. Grow Your Social Reach and Engagement

Despite its fast-changing environment, social media marketing remains one of the best ways to find new customers.

The truth is that a significant amount of brand discovery online still happens in public social feeds. Growing your social media following puts your brand in front of people actively looking for products like yours.

Using RafflePress to increase brand awareness is pretty straightforward. We created the social media account follow actions so participants can enter your giveaway by following you on your:

• Facebook page
• Pinterest profile
• Instagram account
• Twitter profile

With more people following your brand channels, you increase your exposure to a broader audience, resulting in more potential customers. It’s also possible those users will stick around for more giveaway ideas and freebies.

In this sense, giveaways attract customers by connecting your brand to a wider audience already interested in buying what you sell.

Instagram’s shopping features have made it one of the most direct paths from discovery to purchase. Running an Instagram giveaway gets your products in front of people who are already in a buying mindset, and you can structure entries to drive exactly the engagement you want.

Why not run an Instagram giveaway and include powerful entry actions to engage your followers directly with your brand, such as:

• Viewing a post on Instagram
• Watching an Instagram video
• Sharing your giveaway with friends

If you like, you can include all of the above and reward participants with bonus entries for every action they take.

The bottom line is if your audience sees tons of people engaging with your brand, you’ll appear more trustworthy, which can be the tipping point for securing more sales. It’s also an effective way to attract influencers and entrepreneurs who may be interested in working with you.

3. Boost Website Traffic

Contests and giveaways can dramatically boost your website traffic. With one-third of contest entrants willing to receive more brand information, it’s an excellent lead-generation tactic.

This is especially true when you host your giveaway on your business site using a giveaway landing page. Since it has nothing to distract your visitors, it keeps them focused on submitting their entries and securing new leads for your brand.

You can also use your giveaway to send participants to other areas of your website. For example, you could create your own giveaway entry asking users to pick a favorite item from your product pages or read a blog post and leave a comment.

When users interact with your site, you increase your traffic and keep them on your site for longer. If these shoppers spend more time on your site, they’re more likely to make a purchase.

What’s more, how long people stay on your site can affect your bounce rate, which is a signal search engines use to rank your website.

4. Easy Retargeting

Using a retargeting strategy may not be the first thing that springs to mind when you think about running a giveaway. But when you look at the stats, it’s another excellent example of how giveaways can increase sales.

The average click-through rate (CTR) for display ads is a mere 0.07%, but when you compare that to an average of 0.7% for retargeting ads, there’s a clear difference. Additionally, website visitors retargeted with display ads are 70% more likely to convert.

This means that if you retarget giveaway participants with display ads such as Facebook Ads, they’re much more likely to become customers after returning to your business website.

This is why RafflePress has a settings section dedicated to retargeting and success tracking.

You can enter your retargeting pixels and scripts in that area, where they’ll fire as soon as anyone enters your giveaway.

Bottom line: Do giveaways increase sales? They can if you’re clever about retargeting people who enter with exclusive offers.

One tactic that works especially well: send a time-limited discount code to every entrant immediately after the giveaway closes, not just the winner. Someone who entered to win your product is already interested in it. A 20% off code in their inbox the next morning catches them at peak interest.

5. Improve Product Exposure

As demonstrated in the case study earlier, running a giveaway is a surefire way to increase product awareness. When you combine your giveaway with a well-written email announcement, you’ll have a higher chance of increasing sales.

This is because contest emails have an average open rate of 8%, which is 5.5.% more than email marketing campaigns that are more commonly used.

Plus, if you use your new product as the contest prize, you’ll gauge interest and fuel more excitement for its launch.

You can use RafflePress to generate a buzz around your products by using the prize details section in the contest builder.

You can upload multiple images of your product, create a compelling headline, and write a description that entices people to participate.

6. Trial and Experience

When someone wins a giveaway, they don’t just receive a product. They become a user. And users who experience your product firsthand are far more likely to buy again, upgrade, or tell others about it.

Running giveaways through RafflePress, I’ve seen this play out consistently. Winners often return to buy the full version, a higher plan, or complementary products within days of receiving their prize. The contest turned them from curious into convinced.

The key is using your own product as the prize rather than a generic gift card or unrelated item. A product-specific prize attracts people who already want what you sell. When they win, they become your most motivated trial customer, and many become your most vocal advocates.

7. Collect User-Generated Content

User-generated content (UGC) is quickly becoming the best way to generate leads and sales for many brands. And with more than half of consumers wishing that brands would tell them what content to create and share, running a UGC contest is smart.

With a photo contest or video giveaway, you can ask users to submit a photo or video to enter. You can then use that content to promote your brand on your website and social media.

RafflePress makes this easy with the Submit an Image entry action, allowing users to upload a photo within the giveaway widget. Then, you can see all entries in your giveaway dashboard, so you can easily pick a winner.

UGC works because they’re recommendations from REAL customers, and people are more likely to base their purchase decisions on genuine recommendations than branded promotions.

8. Gather Helpful Feedback

Giveaways are also the perfect opportunity to get feedback on your products. Studies have shown that 58% of people never use a company again after just 1 bad experience. So, it’s your job to do everything you can to exceed your customers’ expectations.

One way you can do that is to create a survey asking for customer feedback. You can do that by running a contest with a simple poll.

Alternatively, you can create a more detailed survey with WPForms and require users to fill it out in return for entry into a prize draw.

Once you’ve gathered your feedback, you can use it to boost sales and improve your products and customer experience.

9. Increase Word-of-Mouth Marketing

Have you ever seen giveaways attracting so many entries that they quickly go viral? Participants tend to share giveaways with their whole network, which encourages more people to enter, and so on.

Moreover, over 94% of the time, users share a giveaway immediately after registering, with 62% sharing it with a friend suggesting they enter.

Word-of-mouth marketing like this works similarly to UGC in that people are more likely to enter if they’re referred by someone they already know.

In an interview with Business Insider, Oana Borcoman, Founder and CEO of Evoke Experiences, said:

RafflePress’s Viral Refer-a-Friend entry action was explicitly created for this purpose. When users click to enter, they have the opportunity to share the contest in the following ways:

• On Facebook
• Twitter
• Pinterest
• LinkedIn
• …and via Email

In the action settings, you can choose to write a custom message and even include hashtags to boost your reach.

By encouraging participation using word-of-mouth marketing, you can increase brand exposure, helping you attract your ideal customers. Plus, you have a higher chance of increasing sales with a larger target audience.

The Potential Downsides of Giveaways

While giveaways can be a powerful marketing tool, it’s important to be aware of potential downsides before diving in.

Giveaways can attract people only interested in the prize, not your brand or products. They might unsubscribe after the giveaway or never convert into paying customers.

Additionally, if the prize doesn’t resonate with your target audience, you might generate engagement without attracting valuable leads. For example, a tech giveaway wouldn’t be effective for a clothing brand.

To mitigate these pitfalls for your small business, clearly define your goals and target audience. Ensure you’re targeting audiences with a genuine interest in your brand, with the potential to convert.

Also, choose a prize that aligns with your brand and resonates with that audience. By offering something they truly value, they’re more likely to engage with your brand and become paying customers.

Three tactics help filter for genuine buyers.

• Use a product-specific prize rather than a gift card or unrelated item.
• Require an entry action that signals real interest, like visiting a product page or answering a question about your niche.
• Send a follow-up discount code to every entrant the day the contest closes. Someone who entered is interested. A 20% off code when the giveaway is fresh in their mind can tip them from curious to buying.

Frequently Asked Questions

How long should a giveaway run to maximize sales?

7 to 14 days is the sweet spot. Longer than two weeks and momentum drops because people assume they have plenty of time and never enter. Shorter than a week and you don’t build enough social sharing momentum. Plan your peak promotion push for day 1 and the final 48 hours.

What’s the best giveaway prize for driving actual sales?

Use your own product as the prize, not a generic gift card or unrelated item like an iPad. A product-specific prize attracts people who already want what you sell. Someone who enters to win your product is far more likely to buy it than someone entering for cash they can spend anywhere.

How do you avoid attracting people who just want free stuff?

Three tactics work: use a prize from your own product line, require an entry action that signals genuine interest (like visiting a product page), and send a follow-up discount to all entrants after the contest closes. All three together select for people with real purchase intent.

Do giveaways help with SEO?

Indirectly, yes. Giveaways drive traffic spikes, reduce bounce rates when participants explore your site, and generate backlinks when bloggers and deal sites share your contest. They don’t replace a content strategy, but they create the kind of engagement signals that support it.

How much does it cost to run a giveaway?

The main cost is the prize. A $100 to $500 product prize is typical for small businesses. At a 34% conversion rate for entries, even a modest list of 500 new subscribers can generate well beyond the prize cost in downstream sales. The case studies in this article show exactly what that looks like in practice.

Next, Run Your First Giveaway

We hope this guide helped you decide whether giveaways do increase sales for small businesses. If you’re convinced, the next step is to dive in with your first giveaway. Follow our guide to create an online contest in WordPress for the steps.

You might also find the following guides helpful:

• How WPForms Got 11K+ Facebook Group Members with a Giveaway
• How Smash Balloon Grew Their Email List by 3,584 Subscribers
• How OptinMonster Generated 3,500+ New Users From One Giveaway

And don’t forget to follow us on YouTube, Twitter, and Facebook for more great tips to grow your business.