In today’s business world, it’s commonplace for companies to offer incentives to customers for purchasing their services. These incentives range from gift cards to consumer electronics, to travel incentives and can serve many different purposes. One of the most important functions of incentives is to boost customer acquisition, and just as important to retain the ones you’ve worked so hard to earn.

1. Incentives Promote Sales

When you reward customers by offering incentives alongside the purchase of services, you encourage those customers to return. While it goes without saying that running an incentive program such as gift cards, consumer electronics, or wearable tech gear comes right out of your marketing budget, companies that do this and are likely to see response rates increase by 20% to 25%, heightened revenue and a higher customer retention numbers. 

2. The right customer incentives can turn lukewarm customers into returning business

Studies show that 80 percent of revenue most businesses earn is produced by 20 percent of the businesses’ total customers. These customers are loyal and interested in a business’s services and, as such, are returning customers.

Customer loyalty and retention is a major factor in business growth. Fortunately, incentives are fantastic at not only attracting new customers, but ensuring that you’re retaining your existing customers.

Recently, Technology Advice did a survey to test exactly how effective incentives are at customer retention. The survey polled 387 people and found that 80% of them reported being more likely to do business with companies that offer loyalty programs or incentives. A great incentive program has the potential to ensure that customers find your company and stay there. 

3. Incentives improve brand communication

We live in a marketing environment that’s experiencing huge generational shifts. More and more, baby boomers are retiring and changing their spending habits and millennials are taking their place.

Millennials are different than baby boomers in many ways, specifically in that they expect brands to communicate directly to them and to provide valuable shopping experiences. This means that brands who want to be competitive in today’s markets need to ensure that they’re offering enough value to attract this new brand of consumer.

This means that companies need to do things like optimize content for mobile (a trait that 72% of customers surveyed in the aforementioned TechnologyAdvice survey identified as their preferred method of communication) and create loyalty programs that draw millennials in. To make existing loyalty programs more effective, consider tying it into an app: 59% of customers surveyed by TechnologyAdvice stated that they would be “more likely” to interact with an incentives program if the company running it offered an app with which to manage the program.   

4. Incentives set your company apart

Nowadays it’s likely that there are 30 other companies that sell virtually the same product or service that you do. In light of this, one of the few things that will set a company apart from the all the others are great incentive programs.

This means that a company that offers their customers the best service and the most attractive incentives are generally the ones that will dominate and lead the pack. This is important to note because marketing is only going to become more challenging in the coming years. The importance of incentives will be amplified and companies that invest research and effort into the development of their customer incentive programs are more likely to win in the long run.

5. Incentives boost customer satisfaction

Of all of the customers that leave a company, 66% do so because of poor customer service. This is important to note because customer incentives are one of the easiest ways to ensure customer satisfaction ratings are high and that your customers are happy with what your company is offering.

Part of the reason this is true is because customer incentives help customers to feel valued rather than exploited. Companies that get incentives right are generally offering additional products as a “thank you” for purchasing a certain product or dollar amount of merchandise. This helps customers feel seen and acknowledged.

In order to create an incentive program that is as effective as possible, it’s important for companies to do some research on their target audiences and ensure that the incentives they’re offering are valuable to the customers that are receiving them. This helps ensure the incentive program is meaningful to a specific group and that both the company and the customers thrive.


While an effective customer incentive program is good for many aspects of a business, it’s especially beneficial to customer retention numbers. To learn more about how incentives and promotions can help sell your services and keep your customers coming back, contact Mpell Promotions today.

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