Motivation for Using Incentive Marketing
Motivational speakers use incentive marketing techniques every day, because they know how powerful these messages are. In incentive marketing, a person or an organization offers something of value, for a reason, and then requires that person to do something in order to receive that benefit. For example, a cashier at a department store hands a customer a gift card, and then asks that person to fill out a small survey. The customer agrees to fill out the survey, because he wants to win a gift card for his next purchase. The store then runs a promotional advertising campaign and offers the "grand prize" to the person who fills out the most surveys.
This is a classic incentive marketing program. But, the beauty of it all is that not only does the business to offer something of value, but it does so in return for the customer's efforts. Everyone loves getting things for free, especially when those things have some kind of value. And the great thing about incentive programs, is that they cost businesses virtually nothing. They are relatively easy to set up and can be managed by any level of management. Here's how Amazon Prime fits into this incentive marketing model.
Amazon Prime is one of the fastest growing online retail stores in the world. It has a solid customer base, and a tremendous online presence. Because of its size and visibility, a company with little else to lose would be foolish not to leverage incentive marketing programs to drive sales. Traditional brick-and-mortar companies that offer incentives for referrals will work hard to convince customers to refer their stores by offering them free products or even discounted merchandise in order to boost that referrals. Amazon Prime fits into this model perfectly.
By offering an incentive for consumers who promote Amazon merchandise, traditional businesses gain two important benefits. First, they increase their exposure to consumers, and they gain new customers who know about and use Amazon. Second, by having access to this massive base of active customers, traditional businesses stand to make significant revenue from affiliate marketing. By aligning incentives with consumer preferences, traditional businesses gain a strategic advantage over digital businesses. This may be the single most important advantage that a traditional business possesses over a digital business.
By offering consumers an incentive to buy through Amazon, traditional businesses gain an additional way to earn profit from customers. Incentives can range from cash back on purchases to discounts on specific products. https://www.youtube.com/watch?v=bFbYkVo2E88&feature=youtu.be choose to reward consumers for spending money, rather than for receiving it. This allows them to continue to generate profit without necessarily adding extra work to their businesses. Digital businesses, on the other hand, cannot provide as many ways for consumers to earn rewards.
The most common form of incentive marketing strategy is providing discounts to customers. Most retail stores have loyalty programs that give discounts on specific items purchased from specific vendors. Some of these programs allow consumers to trade loyalty points or discounts for cash. A company may also provide points or discounts to clients who bring their friends and family with them to shop. Regardless of the type of incentive marketing strategy that is employed, however, it is important for a business to be clear about what types of activities will help to increase a business's bottom line. If the end goal is to simply increase profits, then one incentive marketing strategy may not be enough.
A small business may find that it is more effective to offer consumers incentive marketing programs that require them to make purchases from the company. Digital companies that have a strong online presence, for example, can build loyalty programs that require users to purchase items from the online website. These include programs such as discounts on coffee shop visits, items ordered from an online catalog, or other purchases made through the website. Incentive marketing programs that require customers to purchase something from the company are more effective because the rewards will be issued automatically. This eliminates the need for a customer to physically try to receive a reward.
Additionally, many companies use non-monetary rewards in their incentive marketing programs. This includes awards of free merchandise, free services, or discounts at various events. Non-monetary rewards should be offered in order to attract customers and should not be primarily focused on making sales. These types of rewards are great for businesses that offer goods and services that are low in cost, as they do not need to issue any physical rewards to clients.