Running contests using social media is a great way to increase the number of participants (and the number of people who know about your brand) through word of mouth marketing. Here are six steps to getting your started:

1. Decide what the goal of the contest is:

Are you using the contest for customer acquisition or customer retention? This is the number one decision that has to be made because it will shape all the messaging for the contest, who is eligible and what the prize should be.

The side benefits for either (acquisition or retention) includes increase brand awareness and similar benefits, so don’t confuse these as the main goal.

2. Determine the (social) rules of the contest:

Decide what users will have to do to enter the contest. Remember that your traffic sources are social networks, so make it easy for a social media user to enter.

For instance, if a user account has to be created to enter, allow users to sign up using Twitter or Facebook.

Also consider that one great advantage of running a contest via social media is the aplification of your message to people who may not know about you. This means you want the majority of the contest steps to take place on social networks where the amplification will happen.

Consider rules like:

-You must RT this message to be entered

-Use this #hashtag as many times as possible over the next week. The person who uses it the most will be the winner.

-Each time you use this #hashtag you will be entered into the drawing another time

A huge benefit to using a contest-specific hashtag like #TypeKContest would be that you can interact with the participants in a wide open conversation. Anyone who uses the hashtag is in on the convo – it’s like a tweet chat that goes on for days!

Great creative with your rules, just make sure they’re social, measurable and evangelize your brand!

3. Write benefit-driven messaging to promote the contest:

What are the benefits of participating in the contest? The obvious benefit will be the top prize you are offering. However, also include if there are second or third level prizes or if everyone who participates get something.

Great “free” prizes to offer everyone include:

-A white paper you’ve written

-Top 10 guide you’ve written

-Webinar you’ve recorded

Also, talk up how easy it is to enter the contest (as long as it’s true).

4. Use more than one social network:

Don’t confine your contest is only one social network. Allow everyone in your social universe to get involved. Promote it everywhere you can that makes sense. If the contest is for customer retention rather than customer acquisiton, you’ll likely be more limited in how you market the contest and the number of people who get involved, but you have endless possibilities in where you can market it.

Social networks that are prime for running a contest:

-Twitter

-Facebook

-Foursquare

-Your blog commenting area

5. Decide on the prize:

If the goal of your contest is customer acquisition, the prize likely should be a free account, free services, a free contract or something of that nature.

This works really great in the B2B world for expensive contracts. For example, if the winner receives a FREE one year contract for your B2B software and the annual contract is valued at $25,000 a year, your goal is to turn that winner into a long-time customer that extends the contract beyond one year.

If the goal of your contest is customer retention, the prize should not be related to your company (in most cases). You want to reward your customers with a great, third party prize (could be something one of your partner’s offers) such as an iPad, a vacation or conference tickets.

6. Capture leads from the contest:

If at any point during the contest entrance process you have capture personal information, be sure to include an opt-in line that allows you to use the information for marketing purposes. I don’t mean you should spam the entrants as soon as they enter.

Rather, you could place them into an email nurture campaign or in your e-newsletter list. This allows you to have touchpoints with them after the contest is over.

Additionally, you definitely want to create a Twitter List specific to contest entrants. This allows you to talk to people on this list in a more specific way than you might to your general followers. You know the people on this list are engaged with you because they took the time to enter the contest.

Twitter segmentation through lists is a must-do for all Twitter campaigns and contests you run.

What tips do you have for running a contest on social networks? Leave a comment below! If you need help running a contest on social networks, send me an email now.