Boost Response Rates with Consumer Incentives
Whether your company is a national brand, a small local business, or somewhere in between, consumer incentives are a great way to engage your customer base. By offering a little extra motivation for a customer to convert or respond to your marketing, you can drastically reduce churn and produce great results. This value add can also directly lead to an increase in marketing response rates and additional revenue. By offering consumer incentives and other promotions to your target audience, you can increase to likelihood that they will respond to your efforts.
Why Does It Work
Like many promotional strategies, using consumer incentives, like shopping or travel gift cards, works because it adds additional value to your customer without extra work on their end. For example, let’s say your customer is on the hunt for a new gym membership. As they shop around, tons of different incentives and promotions will fly at them from lots of gyms competing for that customer to respond to them. While lots of those promotions centered around discounts or limited time sales are nice, they do not really add any extra value to entice the customer to choose them. However, if there is a gym that is offering a gift card that is eligible for items or experiences outside of that gym, the customer is much more likely to respond positively and choose them.
Another reason promotions boost response rates is that gift cards appeal to your customers, at least in their minds, as free money. This is due to the very basic associations people have with gift cards and instinctively thinking of them as just that: gifts. This is a particularly effective motivator across consumer behavior, even on harder to convert populations, like new prospects or long-lapsed consumers.
How to be Successful
Best practices for consumer incentive programs are still in their infancy as it is a fairly new sales and marketing tactic, at least in the mainstream corporate world. However, there are several basic principles that your company can stick to in order to run a successful effort that leads to a boost in consumer response rates.
- Focus on loyal consumers, and/or those most likely to become loyal. When you send out offers to this population, use gift cards as a reward. This can be either through a one-time promotion or as part of a loyalty program.
- Promote consumer incentives heavily during your company’s peak seasons, such as the holidays or another time depending on your industry. A huge portion of consumers are already trained to heavily shop during these times so adding an extra bonus like a gift card can draw them in even more to your efforts.
- Distribute gift cards as a thank you for new orders. This will depend on how you’re your new order volume is and what your consumer base looks like, but thanking consumers who already bought from you will stick in their mind and make them more likely to do so again.
- Invest in providing top customer service. This would include things like 24/7 customer service communication channels or even a year-long return policy for companies with product based sales. Even if your company does not have the resources to create a massive customer support team, you can still implement these principles on a smaller scale.
- Try to upsell a product or service by offering a gift card. This is an aggressive strategy and may not be for everyone, but it can work wonders on the right population. How it works is similarly to other promotions; a consumer reaches a certain amount in their order or buys a select product/service, and they get the gift card. This option can increase your sales with barely any extra effort on your company’s end. It also adds extra entice for the consumer to complete his or her order.
Consumer based marketing is an aggressively competitive environment. With each year it is getting harder and harder to stand out to your audience and drive them to stay with your company. By providing additional value to your consumers, you leave them feeling positive and happy to have made their transaction. It would not be a surprise if this soon becomes a basic strategy for all companies, as familiar to consumers as coupon codes, in the near future.