Whether your business’s current focus is to build employee loyalty, gain more customers, or drive more sales, you can’t expect people to help you achieve these goals out of the kindness of their hearts. Instead, they need an incentive.
In other words, what’s in it for them?
Marketing incentives are a crucial component of any good growth strategy. However, incorporating incentives the right way is even more important than simply offering them to customers or employees.
In this article, we'll explore six proven incentive solutions, including how to integrate them into your performance strategy.
Incentive marketing is the process of using rewards to motivate people to take specific actions to drive business growth. This type of marketing can work both internally and externally to improve employee performance and motivate customer sales.
For your employee retention and performance strategy, incentive marketing can provide benefits like:
As a customer-facing strategy, incentive marketing offers benefits like:
Businesses can incorporate reward incentives into a wide range of marketing strategies, including referral programs, loyalty programs, employee contests, and more.
Ultimately, incentive marketing works because of extrinsic motivation. Sometimes, it's just easier to motivate people with an external reward — such as a digital gift card, a discount on a purchase, or more PTO days. This can be much more powerful than just intrinsic motivation alone, which is doing something for the inherent satisfaction of doing it.
Incorporating an external reward into your business strategy creates a mutually beneficial offer that encourages employees and customers to complete certain targeted actions.
Marketing incentives contain two important components: the desired action and the reward. The action you want customers or employees to complete often dictates the type of reward you provide and how you structure your program as a whole.
Below are the top six marketing incentives focusing on different actions.
Cash incentives motivate people to spend money. They’re most commonly used in customer-facing marketing strategies designed to motivate customers to purchase products or services.
With this approach, the main incentive for a customer to spend their money on your business is to gain your valuable products or services in return. However, providing an additional incentive to purchase can help “seal the deal” for customers still on the fence about their purchase.
Use cases of cash incentives and discounts include:
Performance-based incentives reward employees or customers for performing specific actions in your company. Use cases include:
Performance-based incentives are very actionable. Make sure your customers and/or employees know what actions they need to take to trigger the reward.
Goal-based incentives invite customers and employees to meet specific, measurable goals. You can structure this type of incentive solution so that the more points a person earns, the greater their reward.
Alternatively, you can offer one large incentive that participants can earn for completing all “tiers” of the program.
Use cases of goal-based incentives include:
Recognition-based incentives are slightly more abstract than the concrete goals used in a goal-based incentive program. These programs recognize customers or employees for performing at the highest level. They demonstrate that your business notices and appreciates these efforts.
Examples of recognition-based incentives include:
Travel-based incentive solutions focus more on the type of incentive you provide than the required action. These programs give travel rewards instead of tangible items like money or free products.
Such rewards may include: