Why its Important to Use Customer Incentives in an eCommerce Business

Customer incentives have long been a brilliant way for eCommerce stores to attract new consumers and secure long term relationships with their buyers.

It seems simple, but the process of using them is actually much more complicated than many initially think. It’s not enough to just have a working app or a great product, you need an incentive to push it over the edge.

Securing and promoting a customer incentive that works for your business can be as much of a time investment as an extensive digital marketing campaign or product launch. It is something that will be attached to your brand and reputation, so you need to ensure you’re doing it right.

Here is our guide to what you need to know about using customer incentives on your eCommerce store.

What is an incentive?

An incentive is something a store offers to give additional value to a product or service.

Offering customers additional benefits on top of their purchase can turn what was originally a standard buying experience into something much more memorable.

Incentives allow eCommerce stores to:

• Improve their customer retention
• Discreetly survey their audience
• Make amends for poor customer feedback
• Build a trustworthy business
• Increase their brand visibility.

From a free mint on a pillow to an almost-essential add-on, customer incentives come in all shapes and sizes and are often the difference between a middling eCommerce store and a successful one.

There is no universal solution

As foolproof as the idea of customer incentives can feel, it’s hardly a universal solution to a failing business.

Sure, everyone loves something for free, especially when it’s tied in with a purchase they’re already making, but not every product or service you provide will be relevant.

In fact, a few miscalculations could end up annoying your customers more than pleasing them, especially if you tack on a frustrating process in order to give them access to it.

There are so many reasons you may want or need to use a customer incentive, but many examples you see around the web won’t be relevant to your brand or industry.

Larger brands and licensed sellers of premium goods will find it easier to include additional products as an incentive to buy on every order, while a smaller store (perhaps on a platform such as Etsy) may want to personalize each order. In this case, the gift may be something the customer is only made aware of on delivery, and become an incentive more relevant for repeat purchases.

Your goal is to stimulate feedback

To ensure customer incentives don’t become a case of you giving away something for nothing, they need to come with a goal of stimulating feedback from the customer.

Without kickback in the form of a recommendation, the act of giving something extra with your service becomes watered down. Sure it brings in the customer, but what long term goals does it achieve?

The term shareable has changed a lot in our social media-driven world. However, it is a crucial factor in determining the success of a customer incentive campaign.

Social shareability is important (you want people talking about your deal on Twitter and increasing your reach), but word of mouth recommendations from family and friends are just as important. When we say shareable, we mean the customer can’t wait to tell everyone they know the moment they open their package. You’d be surprised how much people enjoy talking about how they’ve saved money or got something for nothing, and that’s a trait that you need to harness.

Promises are easy to break

Playing the customer incentive game requires a significant amount of concentration and making sure every element of your business and advertising is working in tandem.

It’s simply not good enough to have live Google and social media advertising floating around promoting your store alongside a unique giveaway or special program if that incentive is no longer live. If a customer clicks through to order and finds that they won’t be getting the free gift or service the ad promised them, they’re unlikely to stick around.

Even worse is when they place the order and find out after the fact. Unfortunately, you have to operate with a ‘customer is always right’ mentality. That means their mistakes caused by your lazy advertising need to be rectified. When you’re out of a free gift or have cancelled a discount code, this can be hard to do.

It’s easier than it looks to inadvertently break your promises. To get around this ensure you have systems in place to avoid lapses in concentration. Your marketing team needs to be kept up to date with stock issues and customer service teams need to understand how to quickly and effectively respond to angry customer queries about unfulfilled promises.

Popular incentives you should consider (with examples)

To finish, let’s take a look at some popular incentives across eCommerce that may be relevant to your store.

Freebies

THE classic customer incentive. A free gift is a brilliant way to sweeten the deal and draw consumers away from your competitors.

A free gift can make a product seem a lot more appealing than it initially appears, particularly if it’s relevant to the initial purchase. An add-on can improve their enjoyment of the product, while something totally unexpected can increase their interest in the niche.

Freebies are prevalent across every industry, but the gaming and gambling sectors are arguably led by businesses that offer the best promotions and hot offers. For example, the best casino bonuses often make the difference between where new and existing players spend their money. The niche is so competitive that at some point, every online casino has to give something away to draw customers in.

For your business, this illustrates that if you strike the balance of your giveaways just right, you’ll earn a certain level of brand loyalty from shoppers. The next time a customer needs the product you’re selling, they’ll remember the extras they got with your store and check to see if there are similar offers.

Although this can sometimes lead to a cycle of expectancy, a quality service can earn consumer’s trust and lead them further into the webstore than they originally would have ventured. The right gift can even earn you essential exposure and position your store as a market leader, forcing competitors to match your offer to keep up. It’s a great way to compensate for higher prices and longer shipping times.

Scarcity

“Low stock! Buy Now” — a promotion as old as time itself.

Scarcity works as an incentive because the limited availability of a product encourages consumers to act quickly. It can be used to shift existing stock of soon to be redundant products and ramp up interest in your brand.

Throughout the fashion industry clothing brands such as DoubleF have been able to build a significant following on the concept of limited availability. ‘Limited run drops’ have helped to change the perception of designer and popular clothing, positioning these stores as market leaders without having to develop innovative product lines or invest heavily in original marketing.

This is yet another instance in which the online gaming and gambling industry have proven themselves successful.

Take the Mega Millions Online game as an example. Something as simple as a countdown to the draw date doesn’t just immediately scarcity of time but a sense of action, encouraging readers to get involved as soon as they possibly can (improving not just player numbers but CTR). Something as simple as the prize total, entry cost and a countdown to drive tension can get people excited to get a piece of the Mega Millions action right then and there.

Often, scarcity can lead to increased word of mouth promotion among fanatics and regular consumers alike. In some cases, it can earn you unique promotional opportunities, with blogs and media outlets jumping on your products due to their perceived rarity. There’s a lot an eCommerce store can gain from a simple ‘low stock’ banner.

Social conscious

In 2020, consumers aren’t just concerned with what they can purchase, but what they can give back.

Being socially conscious and presenting your store as a place to do good is one of the most surprising, but powerful incentives to emerge in the eCommerce industry. As consumers become more aware of emerging social issues and the production processes of their favourite goods they seek new opportunities to change the world.

This can be achieved through direct measures to help the people who make said products, or by supporting leather social aims, as we saw through widespread support for the Black Lives Matter movement.

But what’s in it for you? Well, not just the chance to appeal to a new, more socially conscious consumer base (one that is often very loyal), but unique branding and content opportunities alongside other forward-thinking companies and motivation for your team behind the scenes.

Loyalty programs

Customer loyalty is a difficult thing to earn.

That loyalty doesn’t come cheap, but once you’ve earned it it’s much easier to strengthen those consumer bonds

Being thrown into a loyalty program where they have the chance to access exclusive deals and even win prizes is a great way to incentivize customers looking for that little bit extra to buy.

Take makeup brand Sephora as an example. They make their decidedly not cheap products more accessible by rewarding their 17 million members with exclusive offers and discounts. The option to be added to this list or gain access to further discounts, beauty tips and exclusive sets is a great reason for a consumer to take the initial plunge. These incentives turn what would have previously been a one-time customer into a repeat purchase brand advocate.

This kind of program is a chance to completely change the perception of your brand, whether it’s for high-value products such as Sephora makeup or simply your morning coffee choice with Starbucks. Loyalty programs aren’t just spaces to give stuff away, they can be used as a brand-building exercise and an opportunity to build awareness of your store through your most committed customers.

Perhaps most importantly of all, incentives are now an expected part of eCommerce.

Every customer wants a deal, whether it’s a free gift or an exclusive discount. Your job as a store owner is to provide this without compromising your business.

Organisation, originality and awareness of the current eCommerce landscape can help you do them successfully.