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Why Incentive Marketing Can Do Wonders For Your Business

by Herm6nn
Why Incentive Marketing Can Do Wonders For Your Business

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Everyone loves being rewarded, particularly for something they were willing to do anyway. When we get a physical (or virtual) reward, our minds give us a biochemical reward. We love rewards because it’s in our Genes. This is what renders incentive marketing as such a successful strategy.

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What is incentive marketing?

Incentive Marketing is defined by the Business Dictionary as the use of motivational tools to encourage the sale of goods or services.

To me, the part “motivational tools” seems like something a robot would say pretending to be a marketing director when gesturing to a screen labeled “sales widgets” “Motivational tools” is, as it works out, are an effective way of characterizing the many calming forms which an incentive marketing strategy can provide. Competitions, games, and prizes all fit the description.

The Incentive Marketing Association utilizes simple terms to describe the strategy: “This is a structured plan for getting people to do what you want them to do.”

It depends on a fundamental formula which claims that there will only be success where there is skill and motivation.

Here’s one example that you probably know about:

“Join our coffee club, and every 10th drink is on us!”

Whether you believe it or not, this brief phrase reveals a total incentive marketing plan. First, all cafe customers have the option to join (it’s free), second, they all have the incentive to join (it’s free coffee), and so, as millions of coffee shop rewards programs have proven, you’re getting success.

Formula for effective plan:

Ability + Motivation = Performance

Why could incentive marketing be necessary for your business?

When you want people to offer you money, they will indeed ask why. A marketer’s task is to start answering these questions before the client or customer can inquire.

Whatever the marketer’s skill, the answers to those questions will never fulfill 100 percent of potential customers. For some customers, you would still need to spice things up.

It is a necessary and useful strategy as it includes a segment of customers who may not otherwise want the products or services of your company, but this does not necessarily imply that you have to pay these people to engage with your business.

Non-monetary gifts, peer recognition and promotions are all successful incentives. The strategy only shines when the performance piece of the formula is fun on its own grounds, such as a game or contest.

According to the Incentive Federation’s 2016 Incentive Marketplace Estimate Research Study, U.S. companies spend roughly $16.1 billion annually on non-monetary customer satisfaction rewards. Total incentive spending has risen by 17 per cent since 2013, and this indicates that companies are seeing strong ROI from their efforts.

What does an effective incentive marketing campaign strategy look like?

If you’ve ever bought a larger order of McDonald’s fries to get a slice of a Monopoly piece, you’ve felt the appeal of incentive marketing. You’ve also learned the strategy’s first lesson: the motivational system doesn’t have to be large in size. Yeah, you’re buying the fries with the slightest hope of winning a million dollars, but you’d be excited to win a free burger too.

However, not every strategy needs to be based around a game. Many retail brands have had great success with loyalty programs that give points to consumers for every purchase, and then compensate shoppers with discounts or freebies in exchange for points.

According to a 2017 survey by marketing group HelloWorld, discounts and deals are the preferred form of incentives, with free goods and services coming in second and third place, overall. The most successful form of incentive will always be exclusive to the company offering the reward program.

To be effective, brands need to remind their program members about the benefits they have already earned, or those they could potentially earn.

Some great examples of big brands leveraging incentive marketing strategies

Incentive marketing is all around you. You’ll probably notice this much more often after reading this article. Here are some great examples of reward programs that work:

1. Amazon Prime

Maybe Amazon Prime is the king of incentive programs. In April 2018, the Seattle-based company announced that more than 100 million people had subscribed to its Prime membership program. Prime members get two-day free shipping, a complimentary membership to Amazon Video and deals on other services.

Amazon’s plan is so successful because it mitigates the possibility of unexpected fees during checkout. If consumers click to buy an item for single price, only to see a drastic increase at checkout due to taxes and shipping charges, they may be more likely to leave the cart. Clearly, the strategy works as a survey from Consumer Intelligence Research Partners showed that Prime shoppers invest almost over $1000 annually when compared to non-members.

2. T-Mobile Tuesdays

Telecom companies have transformed incentive programs into a science in the highly competitive telecoms industry. Step into the shop of any carrier and you’ll definitely be bombarded with rewards like phone promotions and free accessories.

T-Mobile took its loyalty program to the next level when it launched T-Mobile Tuesdays, an arrangement that encourages commitment by offering rewards for signing up, remaining a T-Mobile customer or making additional purchases. The program is app-based, allowing users to receive a push notification whenever a new opportunity occurs.

3. Starbucks Rewards

More than 12 million people around the globe engage in the Starbucks reward program. Users simply download the app, fill a digital card with money and collect points for every dollar spent. Members receive free drinks and other discounted items as points accumulate.

Occasionally Starbucks will add a limited-time game, enabling program participants to rack up points faster than usual. Through implementing time-based events, the company will re-engage customers who may have stopped using the program.

If you recall the main equation of ability+ motivation= performance you will have no problem executing this strategy.

Step 1: Stop undercutting yourself.

All those “don’t tell anyone” discounts you’ve issued just to drive the prospects over the edge? Your customers are asking their buddies about them. It’s the same with all the benefits you’re paying for out of pocket, including expensive dinners and service upgrades.

Stick to the price and stop paying extras. Otherwise, you can’t stop giving away all of your money. If you take less money than you qualify for, or pay out of your own pocket for freebies, it robs you of the profits you deserve to grow your business and protect your financial freedom. It is precisely for this reason that countless business owners feel stuck–unable to break their personal “income ceilings.”

Step 2: Offer a high-value incentive you don’t personally have to fulfill.

Bonuses strongly influence potential buyers, especially high-value opportunities that are not available elsewhere. People like to be treated like royalty, after all. No matter what types of products or services you offer, NOTHING seduces a fence-sitter like tossing in a free holiday when they say YES to your bid, upsell or request for referral.

Your products and services appear irresistible when you begin to imagine yourself relaxing on a sun-soaked beach… looking at the constant Vegas Strip.. or sampling regional cuisine on a picturesque Mexican square–all on someone else’s dime. And being able to offer wonderful vacations to your new buyers always feels great… especially since this is not YOUR dime. (They are ours)

Step 3: Let us WOW your new clients and customers!

Once you’ve invited your new client or customer on board, you’ll set them up to obtain a voucher to redeem their vacation package. They’ll then have 7 days to trigger their certificates. Once enabled, the certificates remain valid for 18 months and certificate holders can book, schedule, and travel any time within that period.

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