Customer incentives are rewards offered by brands in exchange for the completion of brand-building behaviors. The type of reward may vary from discounts and free gifts to reward points and VIP access to new products. The goal is to actively show that the brand values the customer’s business and is willing to make a generous offer as a “thank you” for their support.
Conversion to purchase is the most commonly targeted consumer behavior, but incentive-based marketing strategies may also be tailored to:
- Solicit personal information like an email address or phone number
- Drive loyalty program sign-ups or app downloads
- Garner reviews and social media shares
- Encourage repeat purchases or larger cart sizes
- Entice shoppers to buy in bulk or purchase bundled items
- Boost referrals of friends and family
- Motivate buyers to upgrade
- Appease customers after making a mistake
- Inspire customers to try a new product, flavor, or line
No matter which strategy you choose, offering the right incentive can greatly benefit a brand’s marketing efforts and help achieve the most important business goals required for long-term success.
Benefits of Incentive-Based Marketing Strategies
Incentives are not only methods in which to draw new audiences, but they also lie at the heart of loyalty programs. The case for creating, sustaining, and even ramping up a loyalty program is evidenced by the fact that 40% of revenue comes from returning or repeat purchasers. Though loyal buyers represent the minority of the entire customer base (only 8% of all website visitors), they shop more frequently and spend more money than newcomers. Just a 5% increase in customer retention can boost profits up by 95%. Most importantly, brands that offer rewards are building lifetime value and expressing their desire to provide their customers with a positive shopping experience.