What are marketing incentives?

I noticed on a search through my analytics that lots of people come to your marketing managed to find out about marketing incentives.

That’s strange because I haven’t put much thought into sharing my learnings and experience here, despite running a website as well called ‘Incentive and Motivation‘ – that looks at just that.

The world of marketing incentives is actually pretty deep and spans across many a category. To help, I thought I could compile a bit of a hit list around marketing incentives for one’ master guide’.

What are marketing incentives?

An incentive is simply the carrot on the stick that makes you want to do something. An incentive could be a discount that you get for signing up to an email list, the gift card you get for referring a friend, or even the warm inner glow you get for helping someone (intrinsic motivation- but we will get to that!) Simply, anything that gets someone to do something is an incentive. This could be a loyalty programme, a points programme, a customer incentive or even a sales incentive.  

Many marketing activities could be seen as incentive marketing- you want to get customers and prospects to do what you want them to do, right? 

Examples of marketing incentives

Before we get into all the questions, what are some examples of marketing incentives? 

  • Free shipping 
  • Bulk discounts
  • Bundle discounts
  • Money can’t buy experiences / Holidays 
  • Freebies
  • Upgrades
  • Gift Wrapping 
  • Extra Loads – e.g. on Gift cards 
  • Points 
  • Samples
  • Free gift wrapping 
  • Free products or services
  • Discounts for you and a friend
  • Loyalty scheme – discount after a period 
  • Loyalty scheme – discount after certain activities
  • Refer and be rewarded
  • Cashback 
  • Cash on completion 
  • Premium content 
  • Whitepapers/ Guides
  • Entry – eg premium subscriptions/ content 

Are marketing incentives run on a special platform? 

They can be! You can get special platforms, whether that’s something to help with channel incentives and sales incentives or even gifting and rewarding customers with prizes and trips. This industry is a whopper, so you won’t go it alone.

These are the fastest to use, they can also run multiple types of incentive marketing campaigns from the same tool and will produce analytics and reports that help you assess success. However, this all comes at a cost.

What’s an own marketing incentive? 

Just like marketing on your own website, an incentive that you run would be something product or service related and you can run this with just your own web dev team (tech allowing) because it’s selling or discounting your own products. 

  • ‘Buy two tops, get one free.’ 
  • ‘Buy by February and get 10% off in March’ 
  • ‘Get a gift card and get an extra £5 loaded.’ 

What’s a marketing incentive programme/ marketing incentive partnership? 

A marketing incentive programme would be something that might not be a discount or offer to do with your precise product or something run through a platform – a far larger campaign. For example, if you sell video games and there’s a big game out about kickboxing baddies in the jungle, you might want to run a prize campaign that sends people out to the wilderness. You might need a prize incentive company to help you, or a travel incentive agency. 

If you are a hotel and you want an incentive, perhaps you would team up with the tourist board to get someone a tour of your city and the sights – staying at your hotel. You could arrange this yourself with ease. 

You might also choose to go the well-trodden route of ‘win an iPad if you complete our survey’. It’s basic, but it still works. 

Are loyalty programmes/ loyalty schemes marketing incentives? 

Loyalty programmes are the ultimate form of an ongoing marketing incentive. These can be mobile or little paper business cards that get stamped. You get them with your coffee or your haircut, but they play a huge part in getting repeat business back. It’s an example of gamification, without being too fancy – simply, the game is to reach all your stamps and get the reward. Usually, this is some kind of discount. 

What marketing incentives work? 

Oh wow, a tough question! It’s all down to your demographic. If you appeal to someone like myself, you might do really well promoting in a way that gets me in store. Your data will show I come into town a lot. I like to buy random stuff. I get gifts. You could reel me in with a buy one get one-half price on greetings cards. You might see more of me in store if you can reload my loyalty card with points. I will probably buy an extra doughnut if you entice me in with a free coffee. I will fill in your survey if you promise me a free pudding. 

Then again, my husband, who hates shopping, coffee shops and lingering around will be more interested in quick wins. He might fill out a survey in exchange for an Amazon gift card. He would probably like to win a watch. He might spend more than me in one shop than I do in a year if you can get him to bundle things. 

My mum, who hates packaging waste, will be incentivised by one large shopping box that comes without excess waste. She might also love to make a charitable donation if she purchases by a certain date. 

The fact is, every demographic is different. Your incentives have to appeal to either the unique niche you are in or the most profitable. 

Marketing incentives and social media

It can help if your incentives have legs for social media as well. If I spy a free mini hand cream with a purchase, you can bet I post it on Instagram. If I see a chance to win an iPad, I’m not going to share it. If you can offer low value but high desirability items, that’s your sweet spot for social media.  

Making marketing incentive mobile

I might be preaching to the choir, but if you can get your incentives mobile, all the better. Whether that’s your loyalty programme or your gift card, alerts when they pass a beacon or SMS at a push, getting on the device we all take to everywhere, including the toilet, is something that will reap the benefits for you. 

Are guarantees marketing incentives? 

Yes. If your business is in a particular niche with known failings, a guarantee can be a powerful marketing incentive. For example, take insurance. We all know how annoying it is to get a renewal cost that’s more than last years when we know a comparison site would bring up a cheaper rate. It’s just how the world seems to work. They catch people that are too late to check who roll into an automated renewal. 

Imagine if a company was able to guarantee that their next years’ renewal price would be lower than this one? 

That would be a great incentive. 

However, it’s not a pain point for another sector. If your local beauty salon suggested that they could guarantee their massage prices would remain in place for two years, you would probably just shrug and be a bit like ‘err, okay’. 

If you can find out the pain point for a customer and guarantee against it – it becomes a real marketing incentive. 

What motivation is there behind an incentive? 

Thee is intrinsic and extrinsic motivation for doing anything. Extrinsic gets you a reward from someone else. This would be working late because your boss said he would get you free pizzas on Friday. Intrinsic motivation is doing it because it feels good and right. You work late because you value the job and just want to see it dine. 

Can you make marketing incentives that focus on intrinsic motivation – aka can charity be a marketing incentive?  

Maybe! TOMS shoes made a whole business model from charitable donations from sales of their shoes. While the look of the shoe made them popular, people liked to do some good as well. If you can align your company as someone who does good and gives back, part of their motivation to purchase will be intrinsic based (they help someone in need) as well as extrinsic (they get a nice pair of shoes). 

Are freebies and samples marketing incentives? 

Yes, if they are followed or given with some kind of time-limited offer or an incentive to buy. It’s a long shot spending marketing pounds on giveaways that don’t reap the benefits of an actual sale and tracking the success can be a pig on a stick. Give them away with a tracked code and see how many sales you convert. 

Is affiliate marketing a marketing incentive? 

Affiliate marketing could be seen as an incentive in the sense that the affiliate partner is positioning your incentive in the space that makes a prospect want to buy. Marketing incentives are seen as monetary, but an incentive to ‘be like an influencer’ or to ‘avoid missing out’ is just as valid a reason to hit ‘buy’ on something. There is the other angle in that your affiliate partners can be given incentives as well to promote your product. 

Is referral marketing a marketing incentive? 

You offer marketing incentives for referrals, and these would be known as referral marketing as a whole process. The incentive would likely be built into the whole campaign, and you would be setting realistic rewards and incentives for referring you, customers. This could be a small referral incentive for a qualified lead and a larger incentive for a closed sale. Perhaps they will get a discount when they pass an email address over, and if that person orders, they will get a bigger discount. This keeps people engaged and interested in giving over what is essentially, rich personal data. 

Examples of referral marketing programmes

Are ‘points cards’ a marketing incentive? 

Yes, absolutely. Although these sit within a loyalty card space, they work as a marketing incentive, sitting in a wallet – digital or physical and acting as a marketing and brand touchpoint, ready to be used. 

Can marketing incentives help my salesforce? 

 Sales incentives are a similar breed to marketing incentives and are also known as channel incentives. If you can get your sales team as fired up about their job (selling) using the same principles behind a marketing incentive, then all power to you. They would need a tweak, but you could say that a sales incentive and a marketing incentive are very similar. You would typically, however, run a sales incentive through a platform, and it would be more like a leaderboard that charts progress and eventual success. A channel incentive might be for someone like a reseller, and again, you would want to incentivise them through giving them hoops to jump through to attain the prize. 

How much to spend on a marketing incentive? 

This depends on you and your business. An example of some marketing incentives recently include the many banks offering £100 to switch over, the meerkat movies campaigns and similar. For them, the act of switching banks is a big deal. It’s a ball ache, and not many people fancy it. A £100 prize or marketing incentive seems to be a sweet spot to help people think it’s worth it. A free hand cream wouldn’t cut it. 

On the other hand, many of the beauty boxes have run subscriptions that come with a marketing incentive that is just that – a free hand cream. Spending £15 a month on a box of goodies is not a huge deal – and for them, and at cost price of £3 hand cream (displayed with the RRP) would be enough to tip over some potential prospects. 

It’s all about the cost of your product and service, the admin involved in the customer meeting your goal (signing up, subscribing, paying) and then reflecting that in the incentive. 

It’s all about trial and error. 

What about GDPR and marketing incentives? 

In the old days, it was so easy. Free stuff in exchange for your email – thanks! Now, GDPR is in play. GDPR is clear that consent must be freely given, and data controllers should avoid making consent a precondition of a service. However, this doesn’t rule out using incentives. 

“There will usually be some benefit to consenting to processing. For example, if joining the retailer’s loyalty scheme comes with access to money-off vouchers, there is clearly some incentive to consent to marketing. The fact that this benefit is unavailable to those who don’t sign up does not amount to a detriment for refusal. However, you must be careful not to cross the line and unfairly penalise those who refuse consent.”

In other words, you should be fine making incentives to encourage people to sign up to your emails, but you would be even safer if you still gave incentives across other channels that do not require personal data. This gives the consumers confidence and also allows you to stay on the right side of the law. 

Can you give an example GDPR statement for marketing incentive sign up?

Sure!

‘We would love to offer you 20% off our jeans if you subscribe yo our monthly e-newsletter. At the moment this discount is only available to email subscribers. However, we regularly run promotions across our social media channels which you find here and here.”

Why aren’t my marketing incentives working? 

If your marketing incentives aren’t working, there could be a few issues with the actual incentive you have chosen. Does it align with your business? Have you promoted it enough? Are you putting money into marketing? 

Asides the basics of delivery, there could be some psychological reasons. 

You aren’t promoting scarcity. 

‘Low in stock’ or ‘2 other users have looked at this hotel in the last hour’ all poke that bit in our brains that makes us worry about scarcity. We are back on the Savannah, worrying about our next leg of antelope. If you can push the scarcity, you will get better results. Think time-limited, in demand, ‘don’t miss out’ and so on. 

People aren’t talking about it. 

If a tree falls and no one is there to hear it, did it fall? If no one is posting on social media or getting excited about your incentive, what’s the point? You need social proof. Just like you wouldn’t expect to sell products without reviews (they work!) you need people to get behind your marketing incentive. Happy reviews, photos of customers getting their free doughnuts, hashtag, internal promotion – get it all in line. 

Stats on marketing incentives: 

According to userlike.com, 50% of customers won’t make a purchase unless it is part of a promotion or special offer.

A National Retail Federation report shows that 75% of consumers expect free delivery on purchases, even on orders less than $50.

A Virtual Incentives study shows that incentives are one of the most important considerations in a customer’s purchase, second only to price itself, and far ahead of brand preference.

The same study also showed 75% of customers feel more favourable to a brand that offers incentives.

A free mint after a meal in a restaurant increases tips by 26%

Dropbox gave free storage in exchange for referrals, and has helped Dropbox achieve an astonishing 3900% growth.