What is the 90 10 raffle rule?

The 90 10 raffle rule is a strategy used in raffles and giveaways to maximize profit. The idea is that 90% of the revenue should come from 10% of the tickets sold. This allows the remaining 90% of tickets to be used for promotional purposes to attract more participants.

How does the 90 10 raffle rule work?

Here is an example of how the 90 10 raffle rule works:

A raffle has 1000 tickets available to sell at $10 each. That’s $10,000 total if all 1000 tickets are sold.
Following the 90 10 rule, the goal is for 10% of the tickets (100 tickets) to generate 90% of the revenue.
Those 100 tickets priced at $10 each generate $1000 total.
The remaining 900 tickets can be discounted or given away to promote the raffle and attract more entrants.
In the end, 100 tickets generated $1000 (90% of total potential revenue). The other 900 tickets generated $9000 total.

This allows the raffle organizer to maximize profit from the whales (the 10% buying the full priced tickets) while still having promotional tickets to generate buzz and reach more entrants.

What are the benefits?

There are a few key benefits to using the 90 10 raffle rule:

Maximizes profit – The full price tickets generate the majority of revenue.
Increases reach – More discounted/free tickets allows word to spread further.
Drives engagement – More entrants mean more social sharing, taggable moments, etc.
Attracts influencers – Can collaborate with influencers by providing free tickets in exchange for promotion.
Litmus test – Shows if the raffle/prizes are desirable enough that people will pay full price.

Essentially, the 90 10 rule allows organizers to generate substantial revenue while also increasing promotional opportunities to attract more entrants and buzz.

What are some examples?

The 90 10 raffle rule is commonly used by nonprofits as part of fundraising initiatives. Here are some examples:

A charity hosting a raffle for a new car has 1000 $100 tickets. They sell 100 to large donors at full $100 price (raising $10,000). The other 900 tickets are given away to promote the raffle, resulting in more donations.
A youth sports program is raffling off a trip. They sell 50 tickets at $500 each to wealthy supporters (raising $25,000). The other 950 $10 tickets are discounted to $2 as a promotion to parents and fans.
An animal shelter is raffling a home makeover. They sell 250 tickets at $20 each to interior designers and contractors (raising $5,000). The remaining 750 $20 tickets are bought in bulk by a corporate sponsor and used in a social media giveaway contest.

In each of these examples, the 90 10 rule allowed the organization to maximize revenue from a small number of full price ticket buyers, while using the other tickets to increase reach and engagement.

When is it useful?

The 90 10 raffle rule is most useful when:

The prizes are highly desirable – Enough that some entrants will pay full price for a chance to win.
You have a large target market – More potential entrants allows you to generate buzz with the discounted tickets.
Your costs are low – The prizes, raffle platform, marketing are relatively inexpensive to operate.
You have influencer relationships – Leveraging influencers makes dispersing the promotional tickets more impactful.

Additionally, the rule helps orient raffle organizers to think strategically about ticket pricing and promotion. By categorizing buyers into the “10%” willing to pay more and the general public, it focuses marketing and sponsorship efforts.

What are the limitations?

While the 90 10 raffle rule has its advantages, there are some limitations to consider as well:

If prizes aren’t desirable enough, you may not sell enough full price tickets to reach revenue goals.
Discounted tickets could cannibalize full price sales if not targeted carefully.
Administering two different ticket pools (full price and promotional) complicates operations.
Legal restrictions on raffles, gambling, etc may limit viability in some regions.
Doesn’t work as well for small niche raffles – you need a large market for the promotion tickets.

The rule can put overly optimistic revenue goals that won’t materialize if the raffle prizes or market aren’t robust enough. And using influencers or giveaways to dispense tickets could undermine sales if not targeted thoughtfully.

Best practices

To successfully employ the 90 10 raffle rule, here are some best practices:

Research appropriate ticket pricing – Price based on prize value and demand.
Invest in great prizes people want – This drives full price sales.
Promote early and widely – Get the word out far and wide.
Strategically target promotional giveaways – Give tickets to those who will create more buzz.
Add donation or sponsorship opportunities – Allows other ways to generate revenue.
Keep expenses low – Don’t let overhead eat into profits.
Abide by all legal regulations – Be aware of gambling restrictions.

Investing in great prizes and promotion is key. And having ways to generate revenue beyond direct ticket sales (e.g. sponsorships, donations) can also improve the profitability.

Should you always use the 90 10 rule?

The 90 10 raffle rule is a solid strategic framework for many raffle situations. But it may not be the best fit 100% of the time.

Here are some factors to consider:

How strong is the demand for the prizes? Extremely high demand may warrant more full price tickets.
Do you have promotional distribution channels available? If not, you may need to sell more tickets at full price.
What are your total revenue and participation goals? The rule may need adjustment to meet specific targets.
How sensitive is your market to discounting? Deep discounts could undermine pricing long-term.
How complex are your operations? The two ticket pools adds complexity which may not work for small DIY raffles.

Assess the unique dynamics of your raffle situation before definitively deciding on a 90 10 approach. Being more flexible with the ratio allows customization based on demand, goals and resources.

Conclusion

The 90 10 raffle rule dictates that 90% of revenue should come from 10% of ticket sales. This approach allows organizers to maximize profits while using discounted tickets to increase reach and engagement. The rule works best for high demand prizes with a large target market. But the exact ratio should be tweaked based on specific circumstances and goals. When used strategically, the 90 10 rule allows raffle organizers to generate substantial revenue while creating promotional buzz. Just be sure to have great prizes, ample distribution channels for the discounted tickets, and the operational infrastructure to administer two ticket pools smoothly.

How to implement the 90 10 raffle rule

Here is a step-by-step guide to implementing the 90 10 raffle rule for your next raffle:

Set your revenue goal – Determine how much total revenue you want to generate from the raffle.
Determine prize value – Assess the approximate retail value and desirability of your raffle prize(s).
Estimate demand – Gauge the expected demand for your raffle based on prize, marketing reach, etc.
Calculate full price tickets – Decide how many tickets you can sell at full price.Aim for 10% of total tickets.
Set discounted ticket price– Determine an appropriate discount for the remaining 90% promotional tickets.
Establish ticket sale channels – Identify where and how you will sell full price vs. discounted tickets.
Create marketing assets – Design your raffle website, social posts, graphics, etc.
Sell full price tickets – Market to your target whale buyers and sell the full price tickets.
Distribute discounted tickets – Strategically promote and distribute the discounted tickets.
Draw winner(s) – Hold your raffle draw event and award the prize(s).
Review and optimize – Evaluate results and learnings to improve future raffles.

The key is allocating tickets strategically based on demand, segmenting your market, and tapping promotional channels to distribute discounted tickets. Adjust ticket quantities and pricing as needed to meet your goals.

Raffle marketing strategies

To successfully market a raffle and implement the 90 10 rule, here are some effective strategies to consider:

Spotlight your grand prize – Make it the hero. Show it off in all marketing materials.
Offer bonus prizes – Smaller prizes give more people a chance to win.
Share proceeds purpose – Communicate how the funds raised will be used.
Time limited scarcity – Countdown clock, limited tickets, etc.
Social media blasts – Leverage existing community on social channels.
Influencer endorsements – Enlist influencers to promote the raffle.
Paid advertising – Target high-value buyers via Google/Facebook Ads.
Email marketing – Send emails and newsletters to your list.
Public relations – Pitch media for raffle news coverage.

These tactics build excitement and awareness for your raffle. Be sure to promote early and consistently across channels. Target specific outreach for high-value ticket buyers willing to pay full price.

Creative ticket distribution ideas

Raffle promoters can get creative with how they distribute discounted promotional tickets. Here are some ideas to generate buzz:

Social media giveaways – Run contests and give tickets to commenters or sharers.
Influencer unboxings – Send a package of tickets for influencers to showcase.
Media promotions – Giveaway on radio shows, local TV, etc.
Blogger outreach – Offer tickets for blog reviews and sponsored posts.
Charity partnerships – Collaborate with a nonprofit to disperse tickets.
Local businesses – Give tickets to display onsite and share.
Print ads – Coupon code for discounted tickets in newspapers/magazines.
Events – Hand out at conferences, festivals, intermissions, etc.

Think outside the box to tap into different networks and audiences. Get strategic about who you allocate promotional tickets to in order to generate the most buzz and engagement.

Raffle legal compliance

When running any raffle promotion, it is important to comply with local laws and regulations. Here are some key legal considerations:

Register with state/local authorities – Most regions require gaming/raffle permits.
Avoid prohibited practices – Some do not allow lottery, gaming, alcohol or firearm prizes.
Disclose odds – Share odds and prize facts prominently.
Terms & Conditions – Have comprehensive rules and disclaimers.
Withhold taxes – With larger prizes, taxes may need to be withheld.
Bonding requirements – Some states require a bonding amount to operate.
Age limits – Check minimum age laws for entry.
Sales cut off – Deadline for ticket sales must be established.
Award substitutions – Clarify if a substitution of equal value can be awarded.

Consult your state and local gaming commissions to ensure full compliance. Work with legal counsel to review raffle operations and marketing approaches as needed.

Frequently Asked Questions

Why is it called the 90 10 raffle rule?

It is called the 90 10 raffle rule because the goal is for 90% of ticket revenue to come from 10% of total ticket sales. So 10% of tickets generate 90% of proceeds.

What percent of tickets should be full price?

According to the 90 10 rule, aim for around 10% of your total tickets to be full price tickets. So if you have 1000 total tickets, you’ll sell 100 at full price and 900 at a discount. The exact ratio can vary based on demand and goals.

How do you determine full price ticket cost?

Consider the value of prizes, demand and comparable pricing for similar raffles. Full price should be high enough to maximize revenue from your most engaged buyers.

How steep should the discount be on promotional tickets?

Discount promotional tickets enough to incentivize engagement, word of mouth and social sharing. Often 50-90% discounts are used. Avoid devaluing altogether by making them free.

How can you sell raffle tickets legally?

Comply with all state and local gaming commission regulations. Obtain required permits, follow sales processes, disclose odds, withhold taxes, and restrict prohibited practices.

What are some popular online raffle platforms?

Some popular platforms for running online raffles include RaffleCopter, Raffletub, RallyUp and GiveSmart. They help automate ticket sales and promotions.

What info should be on raffle tickets?

Raffle tickets should include unique ticket number, event name, date, pricing, benefiting organization, prizes, odds, contact info, disclaimers and legal terms.

How do you pick raffle winners fairly?

Use randomized selection methods like drawing from a barrel or using online random generators. Conduct the drawing publicly for transparency.

Do raffle winners pay taxes?

Tax obligations vary by region. But winners are often responsible for taxes on the fair market value of prizes over a certain amount.

How much should you budget for raffle prizes?

Prize budgets often range from 10-25% of total revenue goals. Big ticket prizes drive demand, so invest in exciting prizes people want.