Incentive Marketing is the process of using rewards or incentives to encourage consumers to purchase goods or services. This is the opposite of discounting. An incentive-based marketing strategy encourages individuals to take action that leads to the achievement of a goal. Incentive marketing can take many forms. Some companies use incentive marketing company by giving bonus points for every purchase, while other companies use it by offering cash discounts at certain intervals.
The core concept of incentive marketing is to alter consumer preferences in order to achieve a change in behavior. Simply put, to state the tactic in more simple terms, it is a psychological technique to get individuals to perform something that would have an influence on their ability to make a particular purchase. It pivots on an elementary psychological law, which states that where there's motivation and ability, there tends to be performance. Incentives alter consumer preferences by changing how they behave. For example, food companies that offer cash rebates to consumers who bring home a large bill are influencing how much they spend on that particular item. Incentive marketing also involves changes in product features such as size, price, display, and benefits.
One of the most popular incentive marketing techniques used by companies is telemarketing. Motivational devices such as lists of all the reasons a consumer should buy their products, as well as lists of every time they are contacted by a company that could help that particular consumer purchase their product are also very popular incentive marketing tools. These kinds of marketing incentives are often coupled with offers of a deal, or a "special offer" if they make just one purchase.
Loyalty incentives are also becoming very popular in marketing incentive programs. A loyal customer is a customer that consistently purchases a certain product from a brand over a period of time. When this customer joins a loyalty program for a minimum amount of time, for example, they receive points that can then be redeemed for merchandise. These rewards can either come in the form of cash, merchandise, or services. Other common incentives that fall into the category of loyalty include discounts on future purchases or a discount at a future date.
One type of program that uses customer loyalty incentives is the program that rewards loyalty through the use of gift cards. These can come in the form of gift certificates for goods or services, which can be used on any purchase. However, they can also be rewarded by providing points towards future purchases. This type of incentive marketing is often used to reward new customers who join a business, as well as returning customers.
The objective of marketing ROI is to align the rewards and intentions of a customer with their needs. Therefore, incentive marketing ROI takes two forms. There is the type that offers an incentive to a customer for making a purchase, while there can also be other types of marketing ROI designed to provide a service or product that benefits the public. Each of these programs has its own purpose, and both types of programs are often implemented together in order to maximize their effectiveness.
Motivational devices are often used in incentive marketing programs, as a way to motivate participants to take advantage of a program. Many businesses offer rewards to participants for enrolling in programs, and a motivational device is often tied in with this offer. For example, a business may offer a discount to clients who recruit their friends to join a rewards program. Likewise, customers who purchase a certain amount of gas will be eligible for a discount. The discount is given as a result of the customer using a particular incentive. In incentive marketing you can include many different types of rewards.
Additionally, incentive marketing programs are often introduced into incentive programs as a way to attract new program members. As an incentive to new program members, one may offer up a free Amazon Prime membership card when the program member makes his or her first purchase. Similarly, a incentive marketing company may offer up a percentage point off purchases made by new program members. Both of these offers are great ways to attract new members to a program. Because participating in incentive programs is such a good way to build new business, many companies employ them as part of their overall marketing strategy.