While a customer incentive might sound like an expensive way to attract attention (a gift on top of purchase doesn’t always make financial sense), the idea is actually more common than you might realise. Free shipping is an incentive, for instance, as is a free trial or a refund guarantee. Sometimes, it’s a badge or points for making a purchase, a concept known as gamification.
In the digital age, some incentives are exactly that – digital. In the entertainment industry for example, casino operators might offer daily free spins as part of a promotion. This industry is especially difficult for new businesses to crack, as there’s so much competition in the space. Deposit bonuses, jackpot entries, and extra turns on popular games are just a few of the ideas marketers have come up with in the space.
Done well, incentives can ensure a customer sticks around. However, it can also look like a transparent way to open somebody’s wallet. The obvious question is: what do shoppers think about it?
A Little Extra
Incentives reportedly boost engagement, loyalty, and revenue. The awkward part of the puzzle is that many of the glowing reviews of incentives come from companies selling incentives. So, it can be hard to take some figures seriously.
Still, the Indeed employment website claims that humans are “highly motivated by rewards”, suggesting that providing a little extra should be a no-brainer.
Engagement company Ebbo does have a strong case for its positive statistics. From a study of 2,500 people, researchers found that 90% of consumers prefer “incentivized engagements” with businesses. Almost 60% of those would abandon one company for another if they put more on the table.
Perhaps most importantly, 40% of people who engage with an incentive are likely to tell somebody else about it. Word-of-mouth marketing is a powerful tool for SMBs in particular, businesses that don’t have the same immediate “reach” as a monolith like Amazon.
Employee Satisfaction
Of course, things are never quite as simple as they seem. Let’s look at another example that reframes incentives as something for employees, rather than customers.
During the last decade, the popularity of worker rewards grew alongside concerns about employee satisfaction. The website Perkbox promised savings from major brands, cashback, and various gift cards. Similarly, EatFruit delivered weekly fruit baskets to offices.
If we consider the workplace as the product in this case, we encounter a problem that affects customer happiness, too. A disappointing product makes any incentive meaningless. A customer isn’t going to be interested in collecting loyalty points after a poor experience, just as an employee won’t care about grapes if they’re already unhappy.
Customer Service
In a retail sense, strong customer service is considered key to retention. So, incentives like free returns, easy refunds, and dedicated helplines become much more effective at keeping shoppers around than a throwaway gift lacking relevance to the original purchase.
Overall, each incentive needs a reason for existing – and it can’t always be to attract new customers. They’re just as effective at restoring damaged relationships.
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