What Is Incentive Marketing? 6 Ideas to Gain Customer Loyalty

August 7, 2023

incentive marketing

Successful marketing comes in all shapes and sizes. 

From SEO to social media marketing, email outreach to affiliate programs, marketers have lots on their plates. However, successful marketing can sometimes be as simple as rewarding your customers.

The central premise of incentive marketing could hardly be more straightforward. It’s all about appealing to our innate desire to earn rewards or win prizes. For global brands and small firms alike, marketing incentives can boost sales significantly.

Many B2C brands use loyalty management software to identify repeat customers and reward them for their continued support with special discounts and perks, which will bring them back to shop more. Marketing incentives work as they give consumers a final nudge to interact with your brand.

Someone who’s reading your pages or other material is already interested in what you offer. By offering a reward or incentive, you encourage them to take the next step in their customer journey. What, then, are some incentive marketing ideas that might do the job for your company?

6 incentive marketing ideas 

Whether you run a local store or operate a cloud contact centre, effective marketing is vital. It’s how you attract those new customers or clients, and keep them away from your rivals. Incentive marketing can play a crucial role in your overall strategy.

The following are some straight forward yet effective incentive marketing ideas. You can pick and choose those most suited to use on your customers.

1. Loyalty programs 

When people talk about incentive marketing, they’re often thinking about the digital world. So much business gets done online these days that such an assumption is natural. Marketing incentives work for - and get used by - companies both online and off, however. Loyalty programs are a prime example. Such incentives are a staple of all kinds of businesses, for the simple reason that they work really well.

At the most basic level, a card that you can get stamped to give you a free coffee or haircut is a loyalty program. As is anything that incentivizes customers to stick with a brand by providing some form of reward. The reason these programs are effective is because people like to feel appreciated. They enjoy thinking that companies are grateful for their custom and they value great customer experience.

For that reason, 69% of consumers say that whether they can get loyalty points impacts their choice of retailer. If you’re in a position to run a loyalty program that’s free for customers to join, you should. It’s as simple as that.

2. Referral bonuses 

Another common type of marketing incentive is a referral bonus to bring in new custom. This type of arrangement is a win-win for firms and customers alike and is particularly effective with affiliate marketing. That’s definitely how you should sell it to consumers if you do implement the idea.

Once again, the premise is refreshingly simple. You offer existing customers a reward if they recommend you to others. That could be a straightforward monetary bonus or something specific to your products. 

dropbox referral program

Dropbox runs one of the most successful referral programs. 

Referral programs work particularly well for e-commerce websites and other online businesses. Such firms can make it straightforward for customers to recommend them. They can also track whether those referred actually do go on to become paying customers.

Reviews and other kinds of word-of-mouth marketing, too, are influential in the digital world. If you don’t already use social listening to see what people say about your brand online, you should start.

3. Special features for premium memberships

Not all marketing incentives work in precisely the same way. Most offer a financial reward or a prize for customers who make a purchase or take another action. Some add new and desirable features to a product or service. That's when customers take out a premium membership.

This is a slightly different way of rewarding your most loyal customers. They have to pay for their heightened level of membership, but the benefits are worth it. That’s especially true for those most regular users of your product or service. Amazon Prime is the highest-profile example of this kind of marketing incentive. 

4. Access to special pricing for paid customers

These incentive marketing ideas are about inspiring and rewarding customer loyalty in one fell swoop. Giving access to exclusive prices for the most reliable customers is another example. It’s a superb way to show consumers how much you value them and their custom. Such a show of gratitude can be particularly impactful when many people feel loyal customers miss out.

Incentivized pricing can also have a further positive impact on your business. Customers will know they get a better price for buying a particular volume or using your service a specific amount. As a result, they may make more effort to reach those thresholds. Thus, your marketing incentives boost customer loyalty and turnover at the same time.

5. Early access to new items and sales

If you release new lines or run special offers, you may want to provide them to loyal customers before anyone else. That’s another tried and true form of incentive marketing. It’s a method often employed in the entertainment and leisure industry. Think about the last time you saw tickets for a concert or gig go on sale. You probably noticed that some people could buy them first. That might have included members of the fan club, users of a particular sponsor’s product, and others. 

priority customers for tickets

O2’s priority tickets are an example of incentive marketing

This is a great incentive marketing idea to consider. You give up very little and could still get abundant rewards. By giving some customers early access to products or promos, you create a sense of urgency. That’s an excellent way to boost sales. On top of that, you’re still rewarding loyal customers and aiding retention.

Marketing email lists and unified communications as a service (UCaaS) platforms, too, make this technique simpler. It’s quick and straightforward to reach out to all your existing customers.

6. Sweepstakes and contests for free merchandise

Incentive marketing isn’t all about inspiring people to buy from your brand. Sometimes, a successful marketing incentive is one that helps you gather new leads and info. Sweepstakes and contests are highly effective techniques in this regard.

Many firms use giveaways to persuade people to give them their email address or fill in a short survey. The former gives your brand a new channel through which to reach potential customers. The latter provides potentially invaluable detail on your target audience.

Sweepstakes and contests are easy for even smaller businesses to run. You can appear generous, after all, without breaking the bank. One very desirable prize will delight entrants to your competition. It doesn’t, though, have to make much of a dent in your budget.

Incentive marketing examples

Whatever your niche, your brand must use all at its disposal to aid your marketing strategy. If your main focus is to find new customers or to keep those you’ve got, the more marketing weapons you have, the better.

Some firms combine tech, such as software with VoIP video or VoIP browser capabilities, in order to reach a broader audience. Others leverage the types of marketing incentives we talked about above, including some of the world’s most recognizable brands. Many of those use loyalty programs, contests, and a variety of social media marketing techniques. The results they’ve achieved by doing so, too, are remarkable.

Let’s take a look at some notable incentive marketing campaign examples and the benefits they’ve delivered.

Dunkin’ Donuts and Starbucks

Two leading brands provide a superb example of how impactful loyalty programs can be. Starbucks runs one of the most famous loyalty schemes in the world. Their rewards card and mobile app helped significantly boost sales after its launch.



It also made Starbucks a target, however. When the coffee brand made changes to its loyalty scheme, rivals Dunkin’ Donuts took aim. What ensued was a pitched battle over rewards programs. The firms waged a PR war about which of them offered a better deal to consumers.

Two world-renowned brands clearly see incentive marketing as a vital battleground – one on which to try and get an advantage over one another. It’s not a marketing technique that any organization can afford to ignore.

Amazon Prime

We touched on Amazon Prime and its success as an incentive marketing technique earlier. It’s well worth giving it some more attention, though. In a way, Prime combines a few of the versions of incentives we discussed earlier. It’s similar to a loyalty program in that it’s most beneficial to more regular Amazon customers. It also provides extra features to customers who upgrade to Prime membership. Throw in that you can also get a free trial, and Prime shows another incentive marketing hallmark. 

However you categorize Prime, there’s no question it’s been a profound success for Amazon. That’s a testament to both Amazon’s clout as a brand and the effectiveness of the Prime program.

Prime is a particularly smart example of incentive marketing. That’s thanks to its innovative nature. Starting as an offer of free or speedier delivery, the scheme has expanded over the years. Now, Prime members get all manner of features, not to mention access to the firm’s subscription TV service.

Amazon has turned a comparatively simple premium membership into so much more. Prime is a loyalty program and incentive for new customers; all rolled into one.

McDonald’s Monopoly Sweepstakes

We did say that incentive marketing gets leveraged by the world’s best-known brands. Now that we’ve followed Amazon with McDonald’s in our examples, it should be apparent that we weren’t kidding. The fast food brand’s Monopoly-themed sweepstakes contest has run for decades. It’s among the best-known examples of incentive marketing in the world. That makes it an extraordinarily long-lived marketing exercise with a remarkable history.

Despite some less favorable episodes in the past, the scheme has still delivered for McDonald’s. The contest has become akin to an institution, and has given away millions of dollars in prizes. Its annual implementation is an event that people eagerly anticipate. National newspapers around the world even run stories about it. If that’s not an example of how beneficial a good marketing incentive can be to brand awareness, nothing is.

It's a win-win!

Incentive marketing is a potentially lucrative avenue for any brand to explore. That’s whether you want to find new customers or reinvigorate those you already have. This strand of marketing is one that excels in aiding both customer acquisition and retention. Contests, referral bonuses, and loyalty programs, after all, have universal appeal.

It’s easy to try some of the clever techniques listed above. Not all of them will suit your brand or customers. You only need one effective scheme or contest, though, to see a benefit. Get it right, and you could taste similar success to the world’s leading brands, which already make incentive marketing work for them.

Retention will bring no results unless your audience engages with your brand. Learn what customer engagement means for a business.

Loyalty management software
Brew some loyal-tea

Create and manage your reward programs with the best loyalty management software.

Loyalty management software
Brew some loyal-tea

Create and manage your reward programs with the best loyalty management software.

What Is Incentive Marketing? 6 Ideas to Gain Customer Loyalty Incentive marketing is a technique that encourages customers to promote your products. Learn how to use incentives to get your target audience's attention. https://learn.g2.com/hubfs/iStock-583855344-1.jpg
Sam O'Brien Sam O'Brien is the Director of Digital and Growth for EMEA at RingCentral, video conferencing and call center software provider. Sam has a passion for innovation and loves exploring ways to collaborate more with dispersed teams. https://learn.g2.com/hubfs/Sam%20OBrien%20X%20G2%20Incentive%20Marketing-1.png https://www.linkedin.com/in/samuelwobrien/

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