Consumer incentives offer benefits to buyers and are one of the leading methods that businesses use to boost sales. Some types of incentives are points-based reward systems, frequent-shopper discounts, rebates, or percentage-off deals.
Businesses can use one reward system or combine incentives. Combining incentives offer a few advantages and disadvantages.
Advantages of offering Different Incentives to Different Media Consumers
Businesses offer customer incentives to increase customer traffic that, hopefully, leads to conversion. Offering a variety of incentives will ensure that each visiting customer will sample at least one of your offers.
Clearing Excess Inventory
If you are dealing with tangible goods, offering incentives is one of the ways you can use to clear excess inventory. Even when you end up not making any profits, generating some quick cash can enable you to meet some pressing financial obligations or use the cash to stock some fast-moving inventory.
Helps with A/B Testing
If you have every page of your website promoting different desired actions that visitors can take, you’ll be able to carry out an A/B test to determine which of the incentives work best and which one(s) should be discarded.
Some of the actions you can test include:
- Subscribing to a service
- Buying a product
- Submitting a survey response
- Signing up for a newsletter
Disadvantages of offering Different Incentives to Different Media Consumers
Changes Customers’ Price Perceptions
When businesses offer a variety of incentives to their customers, the customers may get so used to the incentives that they find it difficult to revert to the original prices. Once the incentives stop, some customers may shy away from purchasing from your business.
Limits Your Revenue
Incentives, while a boon for customers, do take a cut of the business’ bottom line. Too many incentives can add up and eat into your revenue.
Damaging the Reputation of Your Brand
Some consumers tend to believe that goods put on promotion are of low quality. When customers visit your website or business and see too many incentives, they may start to doubt the quality of your products.
How to Offer Different Incentives to Boost Your Sales
In light of the disadvantages discussed above, it is wise to play safe when it comes to offering multiple incentives. Here are some tips that help you to come up with the best reward system for your customers:
Encourage repeat purchases
Rather than having a blanket discount on all your goods/services, you can offer the discount only on the next purchase. This will encourage new customers to come back and be a repeat customer.
Increase incentives over time
Start with a small discount but increase the value for repeat purchases. You can start with 5%, move to 10%, and finally to 15 or 20%
Your deals should reflect your customers’ frequency of purchasing and should take into consideration their individual preferences. If a customer purchases a variety of goods from your site, you need to offer them more incentives on the goods they like most.
Create a rewards program for repeat customers
Having a rewards program will create loyal customers. Those who have enrolled in your program may not easily move to your competitors. You can also use coupons to encourage customers to return to your site.
Provide detailed information about your services/products
Your customers may get overwhelmed by the variety of incentives you have on offer. Letting them know more about your services/products will help them make the right decision faster.
Offering different incentives provide many advantages, but you must be careful to do it right. Otherwise, you could damage the reputation of your brand and miss the vital revenue opportunities.