It has been proven time and time again that incentive-based marketing works wonders for customer acquisition and retention. Even the biggest companies in the world use incentive-based marketing. For example, Amazon Prime has over 100 million subscribers, and these people spend nearly $1000 more annually. Who’d of thought that free delivery was such a big deal?
In the US alone, over $90 billion is spent on non-cash incentives. This figure is from a study done in December 2015, so the number has likely risen since then. These staggering numbers tell us that incentive-based marketing not only works, but it works well.
This blog post takes a deeper look at incentive-based marketing and will arm you with the strategies and information that you will need to improve your customer engagement and retention through the use of rewards, competitions, loyalty schemes and other marketing incentives.
What are marketing incentives?
Incentive-based marketing is the action of offering rewards to customers, usually in the form of competitions, gift cards, giveaways or loyalty points, amongst others. These are designed to drive customer engagement and show that the business values the custom of its patrons by giving back to their customer base.
The goal of incentive-based marketing is to increase customer interaction and, in the long run, sales, profit and growth. You want your customer to take actions that benefit your business. These interactions can range from getting a user to sign up for your newsletter, making further purchases, liking your Facebook page or any kind of conversion that benefits your business.
Incentive Based Marketing Improves Customer Interaction
Carried out from June to July this year and surveying more than 30,000 consumers, the study by KN Dimestore highlighted that incentive-driven advertising had a fantastic effect on brand-customer relationships, creating interaction between the two and producing great results.
A good way of drawing attention to your business, incentive-based Internet marketing rewards the customer for taking notice and makes them much more perceptible to your overall brand message. Creating an incentive that allows your customers to interact with your business is a brilliant way to make a lasting impression.
With the study showing that customers who had been involved in a positive incentive-based experience being much more likely to consider that brand when making a purchase, incentives are a great way to promote your brand online.
Using Research To Plan The Marketing Incentive
There’s a wealth of research available which prove the value of this type of marketing. Notably MarketingSherpa’s study revealed around 95% of 18-34 years follow brands on social media. Combine these findings with Ambassadors’ study, who concluded 71% of users who had a positive experience with a brand online will recommend it to others, which indicates the huge impact that successful motivational devices can yield. We’ll be discussing how to use social media-focused incentivised strategies below.
Examples of incentive-based marketing
Here’s some popular examples of motivational devices used as part of marketing incentive plan:
Freebies – “get a free shaker cup when you spend over £50 on protein powder”
Giveaways – “enter your email address for a chance to receive a free game”
Upgrades – “save £200 when you upgrade your current mobile plan”
Loyalty schemes – points cards, discount cards
Referral schemes – “refer a friend and get 10% off your next order”
Premium content – “subscribe to our Patreon for a monthly T-shirt”
Free guides/informative articles – “check out the guide for the new Ninja blender”
Free/complimentary products or services – “free moisturiser with your next razor”
Free delivery – “free delivery when you spend over £40”
Discounts – “subscribe to our newsletter to receive 20% off at the checkout”
All of the above examples encourage the customer to take an action such as subscribing to a newsletter where they can be marketed to further or refer a friend that may become another loyal customer who might refer another friend, and so on.
1. Incentive-based marketing on Social Media
Probably the most effective way of using incentive-based marketing is via social media. The kind of reach available on social media is second to none, allowing users to share images and posts infinitely and giving advertisements the ability to go viral overnight.
Not only is the reach on social media huge, but the ability to target your content and advertisements to an intended audience via the use of analytics tools and ad platforms is incredibly useful when trying to reach the right audiences.
Perhaps the biggest benefit to using incentive-based marketing on social media is that it’s free and easy. You don’t have to pay for your posts like you would with a TV advertisement or a section in a magazine. Simply plan the incentive (prizes, giveaways, special offers), craft your post, announce it to your audience and let social media and the ever-lasting appeal of “something for nothing” do the rest.
With a growing amount of businesses using social media websites to advertise exclusive offers to their customers, for example, 10% off online purchases for Facebook fans, offering incentives has never been easier.
With the study reporting that;
“Consumers exposed to an incentivized engagement were 161% more likely to visit the brand’s website”
Offering your customers an incentive no matter how large or small, helps to increase site visits. Increasing site traffic is a great way to boost search engine rankings and ultimately, increase sales. Incorporating incentive-driven advertising into your Internet marketing strategy is a fantastic way of creating strong relationships with your customers.
Social Media Incentive Examples
Take a look at this case study taken from the Twitter of one of our customers The Kings Deli.
General Twitter advertisements from The Kings Deli garnered little to no results, yet when they decided to do a giveaway of Amazon vouchers and their delicious kettle crisps, the post returned an impressive 1570 retweets and nearly as many likes.
Although the giveaway may have cost them a little in terms of the Amazon vouchers and giving away a box of their crisps, the return on investment (ROI) was phenomenal and gained them lots of engagement and many more followers.
So, not only did we generate conversions for their hand cooked crisps , but exposed the brand to a much bigger audience than The King’s Deli ever had on social media.
2. Website incentive-based marketing
Another effective way of carrying out incentive marketing is via your website. If someone is on your website, then the likelihood is that they are already interested in your product or service. These are the perfect people to target incentives to as it makes them more likely to choose you for their purchase, especially if you’re offering something valuable on top of what they intended to buy anyway.
Examples of website incentive-based marketing
Free products with your purchase
Say someone visits your male skincare website looking to buy shaving razors, offering them a free post-shave moisturiser with their first order will likely entice them to purchase the razors from your site, and if they like the moisturiser then they may return and purchase it after they have run out.
First-time discounts for new members
Another example would be offering a first-time discount for new customers who sign up or join the monthly newsletter. Not only does this incentivise them to create an account and make a purchase, but it also allows them to be retargeted for other products similar to the ones they have purchased in the past.
Can your business afford to omit incentive based marketing from future digital marketing strategies?
Planning your incentive-based marketing strategy
When planning your incentive marketing strategy, it’s important to consider the data available to you to determine which audiences are best to target and the most effective ways of doing so. Things like the platform you use, the incentives you offer and the way you promote them are critically important. You wouldn’t target video games to people over 60, for example. Sure, some 60+ year old people will play video games, but the vast majority will not.
Use All The Tools In your Arsenal
You can use a plethora of tools to help determine your target audience and where they reside. Things like Facebook Insights, Twitter Analytics and Google Analytics are great tools that will help you better determine your target audience and where they view and interact with your products/services the most.
Context Is Key
Use these tools to help gather the information that will allow you to target your incentive marketing appropriately for maximum effect. For example, if you want to run a competition offering participants the chance to win a bottle of your new women’s perfume, it’s probably not best to advertise this on platforms like LinkedIn where most of the content is business-related.
Instead, the best method here would be to run competition ads on Instagram, Twitter and Facebook, targeting groups and demographics that you know are interested in your perfume such as women between 20-30 who are avid party-goers and are looking for a fresh new scent to try out.
Plan your incentive-based marketing strategy today with the help of MonkeyFish Marketing
If you would like more help or insight into how to effectively plan and use incentive-based marketing strategies, then get in touch with the team of marketing experts here at MonkeyFish Marketing and we can help you run incentivised ad campaigns that convert interested browsers into loyal customers.
Or if you would like to speak to a member of the MFM team with regards to any of the other services that we can provide your business with, give us a call today on 01282 504730.
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