When I was a kid, my dad would sometimes ask me to help him clean our car. The idea of helping him was fun, but I hated the thought of getting my hands dirty. To sweeten the deal, he would promise to buy me chocolate after I finish the job.

It was an effective trick. Our car would be fresh and clean, and got a snack... I was happy and my dad was too.

Little did I know, but my father had perfectly executed a great incentive marketing strategy on me. And it worked wonders!

The thing is, everybody loves to receive rewards—especially when they’re offered in a way that is simple and convenient for them. This is why incentive marketing is so effective in engaging your typical customer.

So what is incentive marketing?

Business Dictionary defines it as the following:

"Use of motivational devices such as competitions, games, premiums, special pricing, to promote the sale of a merchandise or service."

In other words, “take the action we want and we’ll give you something in return”. The action and the reward will depend on your business. For some, it may be buying something and for other businesses, it may be signing up for an email list or downloading an eBook.

Rewarding customers with incentives is a pretty big deal in the business world. The Incentive Marketing Association says that in the United States alone, 84% of the businesses spend $90 billion annually on incentives.

That means consumers have proven that they’re willing to interact with your brand if they’re offered some kind of reward.

For example, somebody who is reading your blog is already interested in what you offer. By offering an incentive, you give them a nudge to take the next step in their journey with you.

So, what then, are some incentive marketing techniques that you could try for your business? How about these?

5 incentive marketing ideas to motivate your customers

1. Run a referral program with your current customers

Let’s start with one of the most popular ones—referral programs. They work like this: you offer your existing customers a reward if they recommend you to other people. The reward here can be a straightforward monetary bonus or something specific to your product.

One great example that comes to mind is Dropbox. Their incentive for referrals is really simple: Refer your friends and earn extra storage.

Incentive marketing - drop box referral

And they have seen a 3900% growth in 15 months! No, we’re not kidding. The reason why referrals work so well is that people generally take action based on the recommendations from people they trust. In fact, 84% of people trust recommendations from people that they know. That’s a staggering number!

Referral programs help you amplify every customer or visitor. This accelerates revenue growth while reducing your average customer acquisition cost.

2. Make your top customers feel appreciated with a loyalty program

Customers are at the heart of any business' success. While it's important to tap into new markets, keeping your existing customers loyal requires much less effort, time, and resources. And the best way to do this is through a customer loyalty program.

Starbucks has one of the most successful loyalty programs of all time. They call it Starbucks Rewards.

Starbucks rewards explainer - incentive marketing

To earn loyalty points (or stars, in their case), customers must order or pay for coffee with their Starbucks app. This was successful in 2 ways—first, their loyal customer base has multiplied, and second, they created a goldmine of data on customer preferences and behavior that helped them run more campaigns later.

If a loyalty program is doable for your product, it can be a great way to collect and centralize your customer data.

4 Loyalty Program Examples in Food and Beverage
If there is one industry that lives and dies by repeat purchases, it’s the food and beverage industry. The price tags are relatively low and margins are slimmer than other industries, meaning you need to sell in high volumes! Sales volume can be generated by getting people to buy more per visit or b…

3. Give away free stuff

Incentive marketing need not be only about persuading your customers to buy more from you. Sometimes, it can even be about giving away stuff for free like an eBook or a coffee mug in return for something valuable.

Contests and sweepstakes are two such highly effective techniques. You don’t have to break the bank to run these.

A lot of companies use them to persuade people to give them their contact info like an email address or fill in a short survey. Here’s a simple workflow to explain it clearly. For example, if you use Gravity forms to run surveys, sync it with your Salesforce CRM.

This gives you a new channel to reach potential customers, grow your email list, and even provides invaluable detail on your target audience to run campaigns in the future.

4. Provide early access to the latest items

This is another tried and true form of incentive marketing. It’s a method often employed in the entertainment and gaming industries. If you release a new line of products or run special offers, you may want to offer them to your most loyal customers before anybody else.

This creates a sense of exclusivity in them and tells them that their participation in your brand’s early access program sets them apart from other brand fans.

NBA 2K, the popular basketball video game franchise has done this for many years now and has seen tremendous success.

NBA 2K game - incentive marketing

They offer a pre-order release of the video game with exclusive content that is available way before the actual release date. This allows their most loyal fans to start playing the game weeks before anybody else and also gives away exclusive bonus content.

By giving your most loyal customers early access to new products, you create a sense of urgency. With that, you’re rewarding them with additional goodies, boosting sales, and most importantly, aiding retention.

5. Offer premium features to premium customers

In addition to giving your loyal customers access to exclusive content, consider also giving them access to exclusive levels of service. In other words, make them VIPs.

Customers who buy a service from you generally expect additional features in it. And the best example of this is Amazon Prime. If you have signed up for Amazon Prime, you get free 2-day shipping, Prime Video, Prime Music, and more. That’s a lot of features!

Amazon features - incentive marketing
Illustration: Chris Philpot

Granted, Amazon is backed by hundreds of billions of dollars. And 99% of eCommerce can’t afford such a level of features.

But a lot of Prime’s success can be attributed to their dynamic CRM system. And how does using a CRM system help? Here’s one way. Whenever customers buy something from you, you can sync their details to your CRM, giving your team up-to-date information about them, and ensuring that your customers have the best possible experience when dealing with you and your company.

This works particularly well for eCommerce businesses. If you run your store on Shopify, connect it to your Salesforce CRM. You can then run a workflow that collects data of every new paid customer over a certain order value to your CRM. This helps you deeply understand your top customers and develop features that they would love.

Incentive marketing TL;DR

Incentive-based marketing is a growing trend that has proved to be a valuable tool for any business looking to skyrocket their revenue. And, according to consumer behavior, shoppers are willing to engage and interact with your brand if they’re compensated in return.

So, test these ideas and examples to inspire your own incentive marketing efforts. Try out different approaches to find out what works best for your business. With a well-designed and greatly executed incentive program, your business can reap great rewards.

Good luck!

This is a guest post by Vimal Bharadwaj, a Product Marketer at Automate.io. He is passionate about all things B2B SaaS. While he's not working, you can see him watching an NBA game, playing basketball, reading a book, or ranting about something that in no way affects his life. His goal in life is to constantly learn and get better before the robot overlords take over the world in the year 2050.

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