Today’s incentive market is full of choices. So it’s important to choose wisely with incentives that appeal to the tastes of your customer base, while fulfilling a variety of goals for your business, from branding and loyalty to increased revenue.
The Perfect Blend of Incentive and Results
The right incentive program is built around your goals, whether you want to acquire new customers, reward referrals or boost overall response. Of course, your budget also comes into play—anticipate how much, and what, you can afford to give away and what fits into your margin. To help you create a successful incentive program, we’ve compiled some best practices for deciding which rewards and promotions will tempt your customers.
Offer incentives with a broad appeal. Even if you have a niche product, not every customer has the same tastes or needs. It’s vital to find a product, service or experience that every type of customer wants—at every point in the sales process. Additionally, an incentive that appeals to a wide audience can be used in different types of promotions to achieve a variety of your marketing goals.
Give rewards with big perceived value. It’s great when the rewards are perceived as worth more than their actual cost. Incentives that make an impression without costing a fortune are a win/win for you and your clientele.
For example, a service provider might give away a popular DVD title with a retail price of $40 that costs only $12 when purchased in quantity. Or a hotel operator could reward best customers with last-minute free hotel stays using rooms that weren’t booked anyway.
Offer a range of rewards. This keeps customers in the repeat purchase pipeline and changes the promotional cadence up so they don’t see the same promotional message from you. Also, for loyalty, it builds their points balance and works by giving small rewards up to more aspirational incentives.
Add your branding. By associating your business identity with a broad range of incentives, you are tied to experiences that your customers enjoy. Custom or co-branded items don’t take away from your inventory or your revenue. But be choosy; you want to really believe (so your customers will also believe) in the quality and value of the branded items you select for incentives.
Watch your ratios. If you’re looking at a spend-and-get scenario, we recommend you start with an incentive value that’s 10%-20% of the purchase(s). But that isn’t a hard-and-fast rule, especially since there are many consumer behaviors that contribute to driving your revenue.
If your business looks for leads for high-ticket transactions, then sales appointments and referrals are well worth rewarding, even though there’s no immediate purchase in the equation. Also, depending on the margin of your product or service, you may want to adjust this ratio up or down.
Avoid discounting. Beyond ratios, the right incentives will add value to your product or service, while allowing you to avoid—or at least minimize—discounting. A large across-the-board discount for every customer means your best customers might not feel recognized, plus it’s unsustainable for your bottom line.
By offering value-added incentives, you don’t need to cannibalize revenue with discounted products or services that could and should be sold to contribute to your margins.
Choose rewards that are easy to redeem. Incentives are all about fostering customers’ engagement with your business to drive overall revenue. It’s essential to pick incentives that are easy to use or obtain and deliver instant gratification.
What’s the takeaway? Be thoughtful about your customers and your revenue—and pick broad-appeal incentives that complement your marketing mix and deliver success to everyone.
Learn more about Restaurant.com Incentives here.