A well-designed competition can create a buzz around your business—increasing brand awareness and giving way to a stream of free publicity, through word of mouth, social media, and in some cases, even mainstream media attention.

What can running a competition do for your business?

There are multiple ways a good competition can increase your business and exposure:

• Increase brand awareness

• Generate free or low-cost publicity

• Attract new visitors to your website and/or social media page

• Help build your mailing list and social media following

• Engage and build connections with customers

• Reward your customers and inspire more customer loyalty

Do I require a permit to run a competition?

Generally under Australian law, there are two main competition structures:

1. Game of Chance

This is when everyone has the same chance of winning (e.g. a lottery, or drawing a name from a hat). If you run a game of chance, you most likely require a state permit or license in the states you are running your competition.

2. Game of Skill

The winner is chosen against set criteria (e.g. a competition to create the best logo, or a 25 word or less question, with judges choosing the winner). You do not require a permit or license for this type of contest but need to ensure the winner is judged, has to answer a skill-testing question or must otherwise beat other entrants.

Make sure you check the specific state requirements, which vary from state to state.

What do I need to include in my competition?

(a) Competition Terms and Conditions:

It is important that the rules of your competition are clearly set out for your participants. Your terms of entry must comply with Australian consumer protection laws and should include information about:

• Duration of the competition, closing time, and dates when prizes will be drawn

• The prize itself

• Who is eligible to participate, and how participants may enter

• How winners will be chosen

• How winners can claim the prize

• What happens if a winner does not claim their prize within a certain period of time.

(b) Privacy Policy:

If you are collecting and using emails and contacts from the competition, participants should also be given a copy of your privacy policy, which provides information about what information is collected and how it is used and shared.

(c) Winning Entries:

There are also legal requirements for advising your winning entrants. You need to:

• Notify winners in writing

• Post the winner on your site and anywhere you advertised your competition e.g. social media

• Leave the winner notification up on your website and social media for 30 days.

Can I make people pay or buy a product or service to participate?

Generally, you can require people to buy a product (at normal retail price) in order to enter the competition. However, you will not be able to make people pay to participate in the competition itself.

What else do I need to comply with when running a competition?

All competitions must comply with Australia’s various consumer protection and privacy laws. Businesses must run competitions ethically and in a manner that is fair to consumers, or they will face stiff fines.

Some of the requirements include:

• The competition, and the surrounding promotional activity, must not be misleading or deceptive.

• The business must not make misrepresentations in relation to the competition. For example, the business should not suggest participants have a greater chance of winning than they do.

• The business must actually give away the prizes that it has offered and cannot substitute prizes.

• The prizes must match the description and value of the prizes that were advertised.

• The prize for winning the competition must not simply be the chance to enter another competition.

For more business articles like this one visit Flying Solo.