Incentive is any promotional offer that aims to influence customers to purchase goods or services. Usually, incentives take a form of discount coupons, cart promotions, free shipping offers or bonus items. In other words, incentive is any physical or non-physical item that is supposed to motivate customers to perform specific actions (usually sales-related).
Incentive marketing is a type of marketing which uses incentives (premiums, special pricing, games, or competitions) to sell products. Incentive marketing can help businesses grab the attention of customers and build a brand differentiation strategy.
How to succeed with incentive marketing?
There are plenty of steps to consider before running an incentive-based promo campaign:
- Plan the incentive – the more brand-related and target-specific the incentive, the bigger the chances for success. Running open-for-all campaigns and throwing free items at customers is not an optimal long-term promotional strategy.
- Keep it simple – incentives should be simple and their value easy to grasp. The more complicated the promotional T&C, the bigger the risk that customers will feel discouraged or annoyed.
- Set up limits – incentive marketing can quickly get expensive if you do not install proper security checks. If you are using a dedicated incentive software, check what limits and restrictions are offered out-of-the-box.