Customer acquisition has never been more difficult. Content marketing efforts can feel like a drop in a huge ocean of noise, and paid advertising costs – across all channels – continue to climb steeply. Competition for keywords and your prospects’ attention is fiercer than ever.
The key to standing out and attracting new customers? Incentive marketing.
What is incentive marketing?
The principle of incentive marketing is based on the behavioural science heuristic known as reciprocity. It’s one of the six behavioural influences identified by Robert Cialdini.
Simply put, if I give you something first, you’re far more likely to give me something in return.
For businesses, incentive marketing typically works by offering something free – or heavily discounted – as a way to encourage prospects to become new customers.
If you sign up with us, we’ll give you this gift for free.
Why does incentive marketing work?
Incentive marketing works because it creates an emotional connection with your prospects.
By adding value with a free gift, you’re sweetening the deal, encouraging your prospects to choose you over your competitors, because they’re getting something extra in return.
They’re not just completing a transactional relationship with you; you’ve upgraded the interaction to a personal one, showing that you care about your customers and want to reward them for choosing you.
And because your customers have received something extra, something free from you, they’re more likely to feel they owe you, and will reward you with their loyalty.
A recent study by Google analysed the purchasing decisions of over 300,000 shoppers and the behaviour behind them. It identified six biases that influence purchase decisions, and the ‘power of free’ was one of them.
In 18 of the 31 shopping categories, from car hire and insurance to FMCG, the ‘power of free’ was either the largest or second largest influence in persuading shoppers to change their brand preference. As their report states:
“A free gift with a purchase, even if unrelated, can be a powerful motivator.”
What types of incentive marketing are effective?
There are many different types of incentive marketing you could deploy to help you boost your customer acquisition, from ‘BOGOF’ buy-one-get one-free offers to free ‘bonus’ items if you sign up today.
Traditionally, these incentives have tended to be low value items, like free branded pens, or excess stock that the business wants to get rid of. But customers have quickly become wise to this.
Today, many businesses offer gift cards as their incentive. They have replaced discounts or coupons in many instances thanks to their ease, variety and wide-spread use.
But to take your incentive marketing to the next level, whether you’re running sweepstakes or raffles, promoting free upgrades and discounts, or simply offering a completely free gift, you need to make sure those incentives are truly valuable.
It’s one of the key guidelines you’ll want to follow to deploy incentive marketing successfully.
How to deploy incentive marketing successfully to boost customer acquisition
If you want to use incentives as part of a highly successful customer acquisition strategy, then you’ll need to make sure you’re promoting and offering the right incentives in the right way. And you’ll need to make sure the process fits seamlessly into your business operations.
Here are a few simple tips to boost customer acquisition with effective incentive marketing:
1. Make sure the gifts you offer are relevant, real and valuable
Any gifts or rewards you offer need to be as relevant and real as possible. Discounts aren’t particularly exciting or memorable for your customers, and random, unrelated gifts will often fall flat.
Gift cards – the equivalent of cold hard cash – are likely to be more relevant and memorable, but they’re still digital. They lack the physical presence of a real gift, delivered direct to their door.
Software like Gift & Go lets you choose your gifts from the mammoth catalogue of Amazon Business and other leading suppliers, so you can make sure your incentives are always relevant, always valuable AND always real, physical gifts.
2. Give your audience a choice of incentives
If you just include incentives as add-ons to your offer, they’ll quickly lose their value. Your prospects will stop seeing them as an incentive and just something else they get as part of the package.
But if you offer your customers a range of gifts to pick from – if you give them the choice to select their own incentive – then you’ll build that emotional connection. Your customers will be choosing something they actually want – and they’ll reward you with their loyalty.
It’s really easy with Gift & Go’s innovative platform to select a range of gifts and let your customers choose themselves – and you won’t need to worry about inventory or shipping logistics.
3. Create a sense of urgency…
Any incentive marketing should have a sense of urgency with it – a time or stock limit to encourage your prospects to act fast and become one of your customers.
4. …and provide instant gratification
You should also make sure you can deliver any incentives instantly too. Customers won’t thank you if they have to wait weeks for their gift or reward.
Gift cards provide instant gratification, but they can lack that emotional appeal. There’s no memorable connection. With Gift and Go, you can offer both gift cards and real physical gifts that are delivered via Amazon Prime.
Your customers get an instant gift delivered directly to them, and you don’t need to do a thing.
5. Make the redemption process simple
Any incentive marketing needs to be as quick and simple as possible for your customers to take advantage of, otherwise any goodwill you’ve generated will quickly disappear.
Your customers shouldn’t have to jump through any hoops or follow complicated rules to redeem their incentive.
Instead, they should just go to an instant redemption microsite to enter their code, with a mobile friendly, seamless user experience – just like the fully customisable ones you get with Gift & Go.
6. Encourage customers to redeem
Maintaining that goodwill also means reminding customers to actually redeem their incentives.
If you don’t take steps to actively encourage your customers to claim their free gifts, they’ll forget and their codes will expire.
In some cases this is inevitable, but if you look like you haven’t tried to encourage your customers, they’re likely to develop negative associations with your brand, and your efforts to boost customer acquisition will fail.
Keep your incentive marketing simple, real, and relevant
There are many more tips and tricks to help you get the most from your incentive marketing. Some depend on your industry or niche, others simply take trial and error to discover.
The key is to factor incentive marketing into your customer acquisition costs. If you already spend on content marketing and paid advertising, incentive marketing is another, more cost-effective way to attract new customers.
However much a new customer is worth to you – whether it’s £100 or £1,000 – you can select gifts and rewards to reflect that value.
Then just get started, track and measure your results, and see which incentives are most effective.
Choosing gifts, setting price tiers, streamlining the redemption process and getting gifts delivered instantly – without any effort – is easy with Gift & Go.
Try it free for 30 days for your next incentive marketing campaign.