From the March 2008 issue of Startups

Whether it's a trip to Jamaica, a makeover or a $100 gift card, everyone loves to win something. That's why contests are such a great way to build business buzz. "Contests can create a lot of interest in your products and cast a very positive glow on you," says Bonnie Carlson, president of the Promotion Marketing Association.

You want a promotion that has a solid tie-in with your brand, a demographically targeted prize and clearly stated rules. "What do you want to achieve most with the contest?" says Fabienne Fredrickson, marketing expert at ClientAttraction.com, a marketing consulting company. "Offer something that [customers] would do anything to have. It creates an immediacy for people to want to [enter]."

Kristen Marie Schuerlein knows her customers like to wrap themselves and their babies in her Affirmagy blankets, which have life-affirming messages on them. The Seattle entrepreneur held a contest asking entrants to submit photos of their babies cuddled in a blanket. "The contest really shed light on that part of our company," says Schuerlein, 38. "It was a unique way to get the word out, and it didn't require a big marketing budget." The grand prize of $250 and five Affirmagy blankets had women bloggers buzzing and drove traffic to Affirmagy's website. The attention also helped push the company's 2008 projected sales to $1.2 million.

The nuts and bolts of a contest or a sweepstakes are governed by various state and federal laws, so consult an expert in promotion and marketing law before setting one up for your company. Also, know the difference between a sweepstakes and a contest, says Carlson. A sweepstakes is a game of chance in which entrants usually submit only their contact information, whereas a contest is a game of skill in which entrants are judged on specific criteria. Visit the PMA website for more resources and information.