What is an Incentive-Based Marketing Strategy?
September 5, 2018
Everyone loves to receive rewards – especially when they’re offered in a simple and convenient way. This love of “free stuff” is why incentive-based marketing is an effective way to engage with your typical consumer.
Incentive-Based Marketing – What is it?
Incentive-based marketing is the strategic use of motivational devices such as games and special pricing to influence your audience to perform an action. For example completing a purchase, signing up for a mailing list, etc.
Consumers have proven that they’re willing to interact with your brand if they’re given some form of reward. However, the latest trends indicate merchants need to cater to the new demands of shoppers who are expecting their rewards immediately. As online retail continues to grow, shoppers are looking for immediate satisfaction with interactive, rewards-based marketing at the point of sale.
Popular Types of Incentives Examples
This includes rebates, coupons for dollars or percentage off and buy-one-get one type offers. These types of incentives are a great way to get your visitors to complete their purchase.
Everyone loves free stuff and it’s an incentive that’s great for growing your mailing list and enabling you to capture other information for future marketing purposes.
Sweepstakes and Prizes
Another great way to collect audience information is with draw prizes and giveaways.
Tips to Launch Your Own Incentive Marketing Campaign
1. Make it Fun
Get creative with your incentivized campaign by adding a game that your audience wants to play. Learn more about how gamification can give your business a serious boost.
2. Keep it Simple
Launching a unique campaign is great but keep it easy to understand and play. You also want to keep the barriers to entry low, like entering an email address, sharing your site, etc. If you ask for much more than that, fewer people will take part.
3. Be Generous
Make participation worthwhile. You don’t have to break the bank, but you should find the right balance between meaningful rewards and business profits. For example, the price of your products should include the cost of shipping, so that when you offer ‘Free Shipping’ it’s worthwhile for your potential customers to participate.
You Don’t Need to Break the Bank – Staying Within your Marketing Budget
According to the research done by Marketing Week, when it comes to the size of the prize, less is more. The study found that people are more likely to partake in your incentive-based marketing strategy if they feel like they have a good chance of being rewarded because the prize is of lower monetary value or there are more of them.
Volkswagon UK found that the monetary value is not always the most important factor for consumers as one of their most successful campaigns offered a low-cost nostalgic prize that struck a chord with their audience.
Will you be hopping on this Trend?
Incentive-based marketing is a growing trend that is proving to be a valuable tool for any business looking to gain a significant amount of exposure. As we know, shoppers are willing to engage and interact with your brand in return for compensation. In exchange, you’ll be able to boost your revenue without going over your advertising budget.
Test out different incentives and approaches to find out what works best for you. With a well-designed and executed incentive program your business can reap great results.