Contest are a great way to engage prospective clients and motivate them to try your product.

People love entering to win things, be it a $10 gift card, iPad or vacation getaway. And by leveraging social media to spread the word, you can reach an entire new audience through your contest.

Step 1: Decide on the Prize

Naturally, the higher in value your prizes are worth, the more entries you’ll get. But if you can’t afford to give away a Hawaii vacation, don’t fret. Even giving away your own products will get people excited.

Will you give away a single prize or several? If you can, structure your prizes into first, second and third place tiers, with first being the best prize.

Will you foot the bill for the prizes, or can you call in the aid of sponsors to assist in the cost? Partnering with a technology company, for example, might help you give away a tablet or mobile phone you might otherwise not have been able to afford as a prize. Simply give any partners billing on your contest site and mention in press releases.

Step 2: Make the Rules…But Keep Them Simple

Contests need rules, of course, but keep them simple. Require the minimum possible for entrants to fill out (name, email, phone…leave out age, hobbies and occupation). You can always get the winners’ address once you’ve ended the contest. Your goal is to make it take seconds to enter your contest.

It’s a good idea to give entrants additional entries by doing things via social media:

  • Tweeting a link to the contest on Twitter
  • Posting the contest to their Facebook wall
  • Getting other people to enter

Will your contest be open to people worldwide or limited to North America? Do entrants need to be a part of a certain group? Lay all this out in the rules for your contest.

Step 3: Find a Home for Your Contest

You’ve got a few options as to where your contest can live. You can set up a page on your website for the contest, including an entry form, links to social media for the contest, etc.

You could also set up a Facebook page for the contest, but make sure to adhere to Facebook’s rules for contests. There are specific things that will get you in trouble with Facebook, such as requiring someone like your page as a way to enter the contest.

You should also have a Twitter stream for the contest. You can use your existing Twitter account and set up a hashtag (something like#mycontest) that no one else is using to track Twitter entries.

Step 4: Spread the Word

Once you’ve got the logistics of your contest down, tell everyone:

  • Issue a press release with contest details and deadlines
  • Share through social media and blog posts
  • Ask other bloggers to write about it (this might qualify for an extra entry)
  • Contact relevant news sources to see if they’ll cover the contest
  • Ask sponsors to share it with their network
  • Send an email to your contacts and ask them to enter and spread the word
  • If you’re brick and mortar, include signage and flyers announcing the contest

Get a regular schedule of tweeting about the contest. Every day, plan to tweet updates and news, as well as simply encouraging your followers to enter.

Step 5: Reap the Benefits

Once the contest is over, create a database of all your entrants. Send them an email thanking them for entering your contest, and ask if you can add them to your mailing list. Most won’t unsubscribe. Consider giving them a coupon code for your products as a special thank you.

Nurture this new contact list. Send them your newsletter and exclusive offers on your products. You’ll see many of them convert to customers.