Does Offering Customer Incentives Actually Work?
Customer incentive programs are designed to benefit and reward loyal customers. Some businesses might offer discounts for their loyal and repeat customers, while some might provide points for every dollar spent. But, does offering customer incentives work, or are businesses wasting their time, money, and funds? In this article, we will discuss some benefits and advantages of providing these incentives so you can see what you get out of implementing them in your business.
They Help Build Customer Loyalty
Studies show that people are more likely to engage with a business repeatedly if they had a great experience at and with the business. Providing these incentives is one way of ensuring a great experience for your customers, with customers who have made a purchase five times more likely to do it again.
Customer Incentives Also Enhance Customer Satisfaction
Everyone wants to feel valued, and no one wants to feel exploited. When you offer an incentive, you show your customers that you value them and appreciate that they have decided to use your products and services. This translates into higher customer satisfaction.
To ensure you are getting the right results, try to tailor your incentives to your customers. The more personalized, targeted, and relatable the incentive feels, the more valued your customers will feel and the higher their satisfaction with the experience after engaging with your business.
Customer Acquisition and Retention
Businesses can tailor their customer incentives to attract new customers. Banks, for example, will offer free checkbooks or savings accounts to attract new customers. Once a business successfully converts a customer using such incentives, it can continue using periodic incentives to retain them.
Offering a discount for purchases over certain amounts can help with retention while at the same time helping a growing business increase its sales and revenue.
Increasing Brand Awareness
Many businesses struggle with getting their names out there. Branded products offered as incentives have worked very well in the past to help increase brand awareness. Businesses can offer branded items for a first purchase or taking an action, with the customer benefiting from the incentive and the business benefiting from the increased brand awareness.
They Help With Data Collection
Every modern business should be collecting data to use in various ways. For example, many businesses now collect data for segmentation in their digital marketing efforts. While online businesses can rely on signups and other strategies to collect data, businesses that do not have an expansive digital network and presence cannot.
Customer incentives can help with data collection if a business offers an incentive for filling out a survey or providing information in another way. People are more likely to oblige if they know there is a reward at the end of the process.
Yes, customer incentives work very well if they are implemented correctly. A business should provide incentives their customers want for the incentives to feel valuable. Businesses can use data and customer segmentation to ensure their incentives match individual customers perfectly.