Definition of Incentive Marketing: The practice of using incentives to encourage or reward consumers for purchasing goods or services provided by a firm. The practice has many names including incentive pay, incentive exchange, or simply incentive provision. Incentive Marketing is a common technique that many companies use in order to increase consumer loyalty and interest. Incentive Marketing is also the technique that many corporations use to improve their bottom line.
A different definition of incentivized marketing: Motivated buyers or consumers are the main targets of incentive marketing programs. It is designed to drive customers towards a specific solution or offer. Motivated buyers are different ways to measure customer preferences. For instance, if a consumer buys a particular product or service after viewing an advertisement on television, the incentive marketing practices of the corporation might be based on the fact that there is a strong probability that the consumer will buy the product or service. This type of marketing is done in different ways, including television advertising, radio advertising, and even on the internet.
Reward marketing provides customers with a number of options to earn rewards or discounts on their purchases. This form of incentive marketing is referred to as Social Media Marketing and can include such activities as giving out freebies and bonuses, free entries into contests and sweepstakes, and providing users with access to special offers and information. A successful marketing strategy will ensure that it targets the right customers with the right offers and makes use of different social media channels to reach out to the right potential customers.
For example, a retail chain such as McDonald's uses a number of different incentive marketing strategies. One strategy uses the Happy Hour feature in their restaurants to reward customers for their loyalty. Every time a customer purchases one of their beverages or snacks during the happy hour, they get a free drink or free food. A different strategy uses loyalty programs such as their corporate partners. The company may create loyalty programs such as their "My McDonald's Friends" program, which provides customers with free food for every five hundred dollars they spend with their particular local restaurant.
Incentive marketing can take on many forms and provide benefits for different types of businesses. An example of an incentive marketing program that targets a specific group would be a survey program. Many companies conduct surveys to determine whether their target markets are being served by their brand. If consumers feel that they are not being properly served by a particular company, they may respond by taking a survey to find out how the company could improve its service and make their experience better.
Loyalty programs are another way that reward marketing works. For example, if a certain type of company creates a loyalty program wherein consumers who bring their friends or family members will receive discounts or free items. Studies have shown that when families and friends are encouraged to spend money at a particular business, they tend to spend more money there. Reward marketing incentives work because by encouraging consumers to keep spending money at one place they feel they have earned some recognition or some sort of benefit for doing so.
Reward programs are also used in other types of incentive marketing. Some companies use rewards in order to get new clients and keep old ones. Some companies use rewards in order to convince consumers to attend special events or to buy their products or service. By giving out free merchandise or items, a business can increase its client base and build loyalty in the process.
The above examples are just a few of the many ways that business owners utilize incentive marketing in order to increase sales and profits. Whether the incentive marketing is given out to clients or to consumers within an organization, the idea is the same. Businesses need to consider how each incentive marketing program will affect their overall profit statement before deciding which incentive marketing system to implement in their business.