Four ways online businesses can use customer incentives
Love to attract and win over new customers? Here are four ways online businesses can use customer incentives.
Incentives are a great way for online businesses to entice people, win them over and turn them into long-term customers.
We’ve highlighted four ways you can use them, explaining what stage of the customer journey they support and giving examples of industries and businesses that use them.
1) Free trials of products or services
Free trials are when companies give prospective customers a trial period where they can use their products or services without paying for them.
They’re perfect for people at the consideration stage of the customer journey to turn them into paying customers.
Free trials are an excellent way for online businesses to use customer incentives because they let people understand what’s great about their product.
It’s a soft touch approach to sales, one where consumers feel like they’re in control but the ultimate power rests with the digital companies.
Music streaming services are the best example of how to use this incentive, with sites offering “free premium trial offers” being proof of the method being adopted.
Among the numerous different payment plans and service options, you’ll see from the image underneath that Spotify gives its prospective customers a free trial period for 3-months.
Credit: MoneySaving Expert
People need to enter their bank details to get the offer and they need to physically cancel it at the end of the trial if they don’t want to pay for the service.
It’s a method used by other streaming services but the key to Spotify’s trial period is that it’s for such a long period of time (as much as 3x the amount offered by rival sites). This makes a big difference because it gives people the chance to get really invested in it — they can truly learn the benefits of the product and make it a part of their lives.
The incentive then is to give your customers free access to your product and then impress them so much that they decide they want to pay for it.
So, if you want to attract new customers, offer them a free trial period.
2) Take the hard work out of product selection
Product selection is making a decision over what goods to purchase. It’s something more readily associated with customers but it can become a superb way for online retailers to stand out.
It’s a tactic that’s excellent for both the consideration and decision making stages of the customer journey.
Product selection is a great incentive for customers because it takes the hard work out of shopping, with companies taking their details and then making recommendations for them.
It’s a helpful sales method, one where customers put their trust in companies to understand what they want and deliver it to them.
Clothing retailers are the finest example of how you can use this incentive and Thread is the best at putting it into practice.
Thread markets itself deliberately as being an expert in clothing choices. Its product selection incentive isn’t just about understanding how its customers want to look, it’s about going beyond this and making recommendations that surprise them.
The incentive then isn’t only that Thread takes the hard work of buying clothes. It boosts the egos of its customers by saying “you’re special and we alone understand how you can show this to everyone else”.
So, if you want to incentivise your customers by showing them you’re a true expert in your field then provide a product selection service for them.
3) Free offers that gamify product engagement
Free offers that gamify product engagement are similar to a free trial period. Where they differ is that customers need to work for their free offer.
It’s an approach that’s ideal for the decision making stage of the customer journey.
Free offers are a great incentive because they give people a reason to choose your business over another, with companies essentially making a more cost-effective pitch for very similar products.
It’s a more traditional sales method, one where the sales team makes a direct appeal to customers’ bank accounts.
Businesses where money or credit is crucial to the service they offer are the clearest example of how to use this incentive, particularly credit card companies and gambling sites.
You can see the evidence of this approach in credit card companies offering cashback or reward points and sites offering the “best casino bonuses”.
Take credit card companies. Part of the rewards and cashback offersthat Amex advertises is the ability for customers to earn a voucher or air miles.
While these are ostensibly ‘free’ gifts, people must get an Amex credit card and then make purchases with it. These may be for things they would have bought anyway (so can be interpreted as not being additional expenses) but customers need to use the product to get the rewards it offers.
Now consider gambling sites. Among the numerous structures of bonuses and welcome options, you’ll note from the screenshot below that PlayOJO welcomes its potential customers with a free spins offer.
People have to sign up to the site to receive the offer and they need to play the games available at the casinos to be able to use the free spins.
It’s an approach that’s adopted by other sites but the key to PlayOJO’s offer is that it comes without wagering requirements (unlike those of rival sites). This is important because customers don’t have to invest their own cash to get this bonus — it’s a free offer that really is free.
This means that the incentive is to give your customers a reward incentive and then get them to use your product to get what you’re offering, inspiring real engagement and with your business.
The benefit of adopting this strategy is that you create an ongoing call to action, by giving customers a simple message and asking them to complete the same task over and over again. And by gamifying it you make the incentive both fun and competitive — people are asked to work for their reward.
So, if you want to win new customers ahead of your rivals then give them a free offer that’s gamified.
4) Show customers they can be socially responsible
Social responsibility is about more than just the products and services your business offers. It’s about showing your commitment to making the world a better place and demonstrating to customers that they too can make a difference.
It’s a process that works at various stages of the buyer journey but also goes beyond it.
Showing customers they can be socially responsible is something that’s becoming an increasingly important incentive for them to invest in online businesses — people expect companies to be ethical, not just offer the products/services they need.
It’s an aspirational sales tactic, one that shows customers they can give something back at the same time as addressing their pain points.
There are many examples of companies using this model but TOMS is probably the most famous. TOMS pioneered the ‘one for one’ business model.
It’s an approach where every pair of shoes purchased by a customer saw (the company has since moved away from the model) TOMS donate a pair of shoes to a child in a developing country. People are able to be charitable by simply purchasing goods that they already need, meaning it’s a win-win situation.
The incentive then is to tell customers that “buying our products makes you socially responsible”. It’s a really powerful approach because it addresses their pain points and makes them feel good about themselves.
So, if you want to incentivise your customers to buy your products then show them that doing so makes them socially responsible.
Free trials for products/services, product selection, free offers that gamify products/services, and showing people they can be socially responsible are all great ways your online business can use customer incentives.
You may not be able to use these in the exact same way as the examples we’ve given.
However, each of these incentives can be used by pretty much any online business to attract customers at different stages of the buyer journey.
So, decide which one is most important for your business, introduce it and then make your way through the rest.
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