If you really want to get a bunch of small business owners talking, ask them what they think about contests as a marketing strategy. Some business owners swear by them, while, frankly, others swear about them.

We think there’s some real value to be found in using contests as part of your marketing – but (big surprise!) you have to be strategic and have a plan to make contests truly work or you. Here’s what you need to know:

Before You Have a Contest, You Need a Goal

Don’t just have a contest for the sake of having a contest. Instead, you want to know, clearly and concretely, what you want to accomplish with your contest. Identify and articulate your goals for the contest. For example, would you like to introduce your company to 5,000 new people or give a new product line a significant boost as it is launched? A contest can be a good way to accomplish these goals.

Understand That A Contest Is An Investment

There’s more to a contest than giving away a prize. You need to be aware that a contest takes time to promote, oversee, and follow up on. Contests do not function like the proverbial field of dreams: this is not a build it and they will come type of situation. Instead, plan on devoting some serious hours to promoting your contest through traditional and social media, as well as through your place of business. If you do not promote your contest actively, it will be a big flop. Remember that promoting the contest doesn’t stop after you’ve chosen a prize winner: for maximum impact, you’ll want a big campaign announcing the final results in a way that encourages all the people who didn’t win to do business with you anyway.

Targeting Matters – A Lot!

When you’re creating your contest, you’ll want to think about what kind of experience will strengthen the relationship new or existing customers have with your brand. One of the biggest complaints business owners have with contests is that they attract large numbers of people who would never, ever be their customer. You can mitigate this issue both by choosing the right prize and making entering the contest a little tougher than just clicking ‘like’ (a tactic that Facebook frowns on, by the way!)

One of the best contests we’ve ever seen was run by a landscaping company that gave away $300 worth of shrubs and flowering trees to the winner – but to enter, contestants had to submit a photo showing exactly where they’d plant the prizes. This cut a lot of people who enter contests just for the thrill of winning right out of the picture, keeping the focus instead on people who are truly interested in landscaping.

Data Capture, Data Capture, Data Capture

The real value of running a contest is the amount of data you can capture about people who are definitely or potentially interested in your business. As you’re structuring your contest, you need a way to collect email addresses or other contact information, as well as opt-in permissions allowing you to contact participants in the future. Follow up contests with a marketing campaign that keeps your brand in front of your customers’ eyes: that’s the best way to translate the excitement of a contest into something even more thrilling for the small business owner: sales!