Soft Skills: How To Use Customer Incentives
When it comes to business, one can say that any method of stimulating purchases is fair enough. One of the tools that can be used to stimulate purchase or improve customer retention is using customer incentives.
According to research by Virtual Incentives, 75% of customers value brands that offer incentives and loyalty programs. At the same time, 28% of people defined incentives as a decisive factor in the consideration process, coming only second to price.
A survey by Vibe shows 61% of consumers subscribe to mobile messaging, and that they push notifications only for the offered incentives offered by loyalty programs. That means incentives allow brands to use more channels of communication with customers and brand promotion.
Why Do You Need to Use Customer Incentives?
Incentives are “something extra” to add to customer service. Offering your customers additional benefits like extra items, bonuses, discounts, loyalty programs or special deals is what turns a regular service into a service that cares.
Such a small detail like being ready to offer something more than just your products or services makes you look like a brand who knows what your customer want.
Being a powerful tool when used in the right way, incentives allow a brand to:
- Improve retention
- Stimulate a desired action (participate in a survey, leave feedback)
- Make amends after negative customer experience
- Build a trustworthy relationship with long-term clients
- Make returning customers spend more
- Stimulate more impulsive purchases
- Improve brand promotion
- Stimulate social media engagement
Just like a free mint after a meal in a restaurant increases tips by 26%, extra perks from a brand increase the number of returning customers and boost sales. That's why so many brands use various incentives in their business.
Customer Incentives Ideas
What can a brand offer as an incentive? There are so many things that your customers will enjoy as a little extra gift.
- Discounts are great as incentives as customers appreciate the opportunity to save some money. However, discounts also stimulate the next purchase which a brand would otherwise miss.
- Bonuses can be applied to the sum of money spent or toward the number of orders, e.g. $1 — $1 bonus, 1 order — 1 bonus.
- Free samples, test items, trials are a perfect incentive to make a customer interested not only in your brand but also in a particular product too.
- Free items — some brands allow their customers to pick an item up at a fixed price, while others deliver items of their choice.
- Membership or loyalty programs offer special deals to special customers.
- Free upgrades work well for brands that use software, programs, and applications.
- Coupons can be used towards a follow-up purchase (a fixed discount or deal “buy one — get one free.”)
You can also offer services, activities, compensation, and shipping for free, but only if they work for your sphere of business.
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6 Reasons to Use Customer Incentives
Incentives can be used as a tool for increasing sales, stimulating a desired action, rewarding a customer, or just delivering your message, “Hey, we are the perfect brand choice for you!”
1 — To stimulate feedback
Feedback allows you to pay attention to the problems that weren't noticed before, and fix them. If you lack feedback, you can always use incentives to stimulate people to communicate with your customer service team more. For example, you can ask to rate the last piece of communication with your manager, or leave comments you can manage in the Feedback&Suggestions section. In exchange, you can offer a discount for their next order, or extra bonuses for the members of your loyalty program.
2 — To apologize for a mistake
Apologies are essential in any business. If your customer has a problem, you need to show that you care. Offer a discount for the next order, compensation, or free products. If the problem took too long to solve, you can make a note to remind your managers that this customer deserves special treatment as an apology.
Christina Peterson, a customer service team lead forEssayTigers service, says, “Once we experienced a power outage and missed a few deadlines for our editing services. We were not ready for such situations back then and didn’t have a power generator. But we took full responsibility and admitted our mistake. We apologized and provided a refund to every client with whom we worked that day. This allowed us to keep part of our clientele, but some were lost anyway.”
3 — To reward customers for reviews
Reviews written by actual customers are much more credible than polished advertisements. That's why they are essential for attracting new customers, who will rely on them, when making a decision.
But not many people are willing to write reviews, especially positive ones. Of course, many brands solve this problem by writing reviews themselves. But let's face it, genuine reviews are more valuable.
Using incentives in this situation will do things. You can offer discounts, bonuses, customer rewards cards, or free samples for every review, and grow their number to increase your conversion rates by 4.6% according to Reevoo statistics.
4 — To reward customers for reporting bugs or making suggestions
Even the largest companies aren't secure from making a mistake. Sometimes only an attentive user can report a problem that a company can quickly fix after. Improving the quality of your service is important for brand development, so use every opportunity to reward your customers for their time by providing them with free upgrades, discounts, or memberships.
5 — To reward long-term customers for their loyalty
Those customers who are loyal to your brand and keep returning to you, again and again, need special treatment. You can always check the history of communication with that particular person to know how long they have remained with your brand, like by using the history of the universal box. It's easy to email your customers to say that you appreciate their loyalty, and to reward them with a special discount or loyalty program bonuses.
6 — To stimulate social media engagement
If you create most of the content for your brand’s social media accounts, but still face insufficient engagement, you can try incentives as a way to stimulate sharing and commenting on your content. Provide a discount for shares, or free items for a piece of user-generated content, such as a delivered order.
This way you will get content that other users will find credible (as it is provided by users who have already purchased from you) and will motivate your followers to be more active on your social media page. You can easily track shares and tagged images, so there will be no worries about breaking your promise.
Superior Examples of Incentive Marketing
- Dunkin' Donuts. With almost five million members of the loyalty program, this chain knows everything about incentives. They encourage their customers to buy more to get bonuses for every dollar spent. Later bonuses can be used to get free beverages on their shopping trips.
- Sephora's Beauty Insider. This is a loyalty program that makes up to 80% of Sephora’s total sales each year. This implies rewarding customers with bonus points for each purchase, and an opportunity to use them to redeem gift cards, and limited edition items.
- Google Chrome rewards users for bug reports. If they find a report to be valuable and containing a reliable exploit, they might reward them up to $15,000.