Why Customer Incentives Work
Why Customer Incentives Work
Customer incentives are one of the most effective ways for businesses to attract new customers and build strong brand loyalty.
Customer incentive programs center on a few different types of perks. These can include upgrades, free goodies, discounts, or early access to new products. The type of customer reward businesses give out will depend on their target buyer persona. Not all of these incentives are the same.
There’s a variety of different programs that can accomplish each of your business goals. We’re going to look at the very best in this guide: Follow along with Prezzee to learn more about the power of customer incentives.
Incentives Save Customers Money
REPLACE WITH IMAGE
By implementing a customer incentive program into your marketing strategy, you offer customers a way to save money that they would otherwise be losing on repeat purchases.
Market research has shown that in today’s economy, people spend more on brands that offer incentives for customer loyalty. Not just that, but they’re more willing to try new products as well, knowing that their purchases can contribute to future savings.
Incentivize your customer base to do regular business with you by offering discounts or free upgrades/gifts and other ways for them to save.
Incentives Create Loyal Customers
REPLACE WITH IMAGE
One of the most effective ways to build customer loyalty is by implementing a customer loyalty program.
This type of incentive program offers new customers perks, discounts, and other freebies for their next purchase. In this way, they are incentivized to become repeat customers.
Here’s how it affects a business’s bottom line: It’s way more expensive to attract new customers than retain existing ones — five to seven times more expensive, to be precise. Not only that, but returning customers tend to spend 67% more than new ones.
Customer Loyalty Programs
Loyalty programs express your gratitude to existing customers for their business, rewarding them for their time with better awards for each purchase. In return, part of the customer experience becomes centered around saving up for new perks and upgrades.
Customers feel valued when their regular business is recognized and appreciated. They trust brands that show respect and gratitude for their time. Creating a loyalty program that stands out is a must.
As of 2023, the average consumer belongs to 14 loyalty programs but only uses seven. Statisticians recommend businesses rise to the top by offering reliable rewards on schedule or making it relatively easy to bump up to the next level and bring home that free gift or perk.
Types of Loyalty Programs
Let’s take a look at some examples of customer loyalty programs that may boost your customer retention metrics:
- Retailers gain loyal customers by offering store memberships. By typing in their phone number or showing a membership card, customers can get discounts, free items, coupons, and more.
- Some brands have rewards programs, giving customers free products after they’ve spent a certain amount of money as an existing customer. These programs are often points-based, with each new purchase contributing to a number of credits that they can use to buy new products or get better discounts.
- A lot of businesses have tiered programs, offering better incentives as the customer makes more purchases. These incentives may start as simple discounts or minor perks, building up to great incentives like early access products and exciting gift cards.
With any of these types of incentive programs, you can continuously build customer loyalty with each new customer.
Referrals Spread Brand Awareness
REPLACE WITH IMAGE
Many brands have been hugely successful in spreading brand awareness with referral incentive programs. Research has shown that referrals build trust, with marketers noting their ability to generate excellent leads at a lower cost.
In fact, referrals have led to some of the highest conversion rates across media channels. That’s because customers tend to go with word-of-mouth suggestions that come directly from a trusted source.
Whether you’re marketing to other businesses or a larger customer base, referrals earn you important credit. People trust the opinions of the real people in their lives above all. According to some studies, people are far more likely to trust recommendations from family and friends compared to advertisements.
By incentivizing people to refer your brand to their friends and family (or followers on social media), you spread brand awareness directly to your target audience. In the process, you gain more followers and more potential customers.
What Are Examples of Referral Programs?
You can incentivize your existing customers to refer your brand with a number of incentive marketing strategies:
- Referral incentive Programs. These programs offer discounts, free gifts, and other rewards for customer referrals. After they buy a membership or make a purchase, the new customers are also given all of the same rewards, encouraging them to bring their business to the preferred brand.
- Social media giveaways have been a great incentive program for getting referrals. With this strategy, a brand creates a raffle for their followers, offering prizes like eGift cards, early access to new products, or a free item.
In order to win the raffle, followers have to like the post and share it on their timelines. User-generated content is especially powerful for small businesses, with 79% of shoppers considering these posts/reviews when making a purchase.
Tip: Take the referral rewards up a notch by making everyone feel like a VIP. For example, if you send an eGift card with Prezzee, you can include custom text, videos, or branded imagery to get the message across — loyalty is appreciated.
With incentive programs like these, your business can earn new customers and grow exponentially.
Offering Incentives and Reaping the Rewards
There’s no better way to build brand trust than to offer your customers meaningful incentives for their business. When you give people practical, exclusive ways to save money with regular purchases, they see doing business with you as a valuable opportunity.
We hope this guide has helped you to learn why customer incentives are such a powerful force in marketing. Learn more about incentive marketing, corporate gifting, and refreshing your workplace with our advice and tips!
If you need personalized and exciting incentives to offer loyal customers or business partners, Prezzee can help with our huge selection of eGift cards for everything from food to vacations to streaming services and hundreds more.
We hope you can find our guides, as well as our amazing gift cards, as you pursue customer incentives! Thanks for reading.
Sources:
Why We Care About Loyalty Marketing | MarTech
Why Referrals Are The Most Valuable Form of Marketing (And How To Get More) | Forbes
Loyalty programs - statistics & facts | Statista
Why Trust and Incentives Help Consumers With Better Brand Selection | Entrepreneur
How User-Generated Content Drives Sales | US Chamber of Commerce
Is Acquiring New Customers More Expensive Than Keeping Them? | The European Business Review
