Should I run a competition or giveaway?

Giveaways work. That is the problem. They reliably produce comments, follows and shares, which makes them feel like the most effective thing you have ever posted — and a month later the follower count is higher, the engagement is lower, and nobody bought anything. Whether you get customers or a crowd is decided almost entirely by one choice.

The choice that decides everything: the prize

There is a population of people who enter every giveaway they see. They are not deceiving anyone; entering is free and winning is nice. They will also never buy from you, and if your prize is a generic one — an Amazon voucher, a hamper, an iPad — they are the entire audience you have just recruited.

The fix is a prize that is worthless to anyone who is not a potential customer. A full valet for a car owner in your town. A month of classes. A treatment. A meal for two at your restaurant, not a £100 gift card. Something that requires being local, being the right sort of person, and wanting the thing you actually sell.

Do this and the entrants are a list of qualified prospects. Skip it and the entrants are a list of people who like free things.

The cost nobody counts

Followers who never engage make your ordinary posts perform worse afterwards, because your baseline is now measured against an audience that is not interested. A thousand new followers who ignore everything is not a neutral outcome — it is a slightly worse account than the one you had.

Which is the real argument for a smaller, more local, more specific prize: fewer entrants, better entrants, no hangover.

The legal part, briefly and carefully

This is where small businesses get caught, and it is not obscure. In the UK, if people pay to enter and the winner is chosen purely by chance, you are running a lottery, and running one without the appropriate licence is a criminal offence. That is the line.

You stay the right side of it in one of these ways:

• Free entry. The overwhelming majority of social giveaways are free to enter, which makes them free prize draws, which is fine.
• A genuine free entry route of equal standing alongside a paid one.
• Real skill. A competition where knowledge, skill or judgement genuinely decides the winner — enough that it actually eliminates entrants. A question anyone can answer by reading your bio does not count as skill.

Separately, advertising rules require that your promotion states its significant conditions before people enter: the closing date, who can enter (age, area), how to enter, what the prize is and how many there are, how and when the winner is chosen and told, and who is running it. Then you have to award the prize as described.

None of that is hard. It is one clear paragraph, and writing it is also good practice: most disputes about giveaways are really disputes about conditions nobody stated.

This is a plain summary, not legal advice. If money is changing hands to enter, take proper advice before you run it.

The platform rules almost everyone breaks

Each platform has its own promotion terms, and they are stricter than common practice suggests. Read the current version for the platform you are on — they change — but the recurring themes are:

• You must make clear the platform is not involved. Not sponsoring it, not endorsing it, not administering it, nothing to do with it.
• You cannot require people to post it to their own personal timeline, or to tag themselves in something they are not actually in, as a condition of entry.
• You are responsible for running it lawfully, including the conditions above. The platform disclaims all of that.

Enforcement is inconsistent, which is exactly why people assume the rules are not real. They are real, they are occasionally applied, and the penalty lands on the account you have spent years building.

How to run one that actually pays

1. Decide what you want. Email addresses? Local awareness? Reviews of a new product? A giveaway can serve one of those well and the others badly.
2. Pick the disqualifying prize. Valuable to your customer, useless to a stranger.
3. Make entry one easy action that gets you what you want. If you want reach, a comment. If you want a list, an email sign-up with consent — see whether you need an email list for what the rules require.
4. Write the conditions in one plain paragraph and put them where people enter.
5. Run it for a week. Long enough to spread, short enough to keep urgency.
6. Announce the winner publicly and show the prize being handed over. This is the best content of the whole exercise and most businesses skip it.
7. Do something for the people who lost. Everyone who entered wanted the thing. A modest, genuine offer to entrants is where the actual revenue is, and it is the step that separates a giveaway from a marketing campaign.

When not to bother

• You have almost no audience yet. A giveaway amplifies reach you already have; with fifty followers it amplifies very little. Getting your first customers is a different job.
• You cannot afford the prize comfortably. Resentment shows.
• Your service is a one-off distress purchase — emergency plumbing, funeral services. Nobody is entering to win one, and the tone is wrong.
• You are doing it because you cannot think what else to post. There are twenty better answers to that.

The bottom line

Run one if you can pick a prize that only a potential customer would want, state the conditions plainly, keep entry free, follow the platform's promotion terms, and have something ready for the people who did not win. Do that and it is a campaign. Give away an iPad and it is an expensive way to acquire strangers. See also how to write an offer that works.