Well, one reason is yes, it allows to call yourself an Award Winning author.
That's a nice little promo label. It's a "credit" of sorts, just as unpblished contest wins are "credits" of sorts. It's also a form of validation, just as it is for unpubs. Just because the book got published doesn't mean the author doesn't suffer from "this-book-sucks-itis."
If you final, most chapters do some form of promotion, even if it's just the listing of finalists in the RWR. (They're also listed all over the internet.) That's getting your name out there, in front of readers. If you start to see the same name, over and over on lists, you might be tempted to check out that author for yourself, see what all the "fuss" is about.
Mostly I do it to hopefully gain a couple readers, here and there. If someone reads me for a contest and really likes my book, chances are they will consider buying my next book. They might tell their friends about me. That starts the word of mouth thing working. They might not have picked my book up if not because they HAD to read it for the contest.
Contests on both side of the pubbed equation are a crapshoot. It all depends on who ends up reading your book. Of course, the same thing can be said for editors - what one editor hates another may like.
Oh, and here's another reason to enter contests - when a book finals in a contest, it gives an author a valid reason to contact her editor. (I'm not a big fan of bugging my editor. <G>) If there's a proposal sitting on her desk, while telling her of the success of the last book done together, one can gently nudge her and say, BTW, have you had a chance to read that new proposal yet? This can also work with agents.
And those are some of the reasons why I am still a contest slut. LOL. Recently my last book finaled in the National Readers' Choice Awards and the More than Magic contest. I'm still waiting to hear on one last contest. I entered 10 contest with the book, and have a 20% final rate right now. <G> That's not bad, IMHO. Could be worse, that's for sure.
Hopefully some of the people who read me in the contest will be more inclined to pick up my books in the future.
Susan G.