How to run an incentive campaign

Offering valued customers the right incentives and rewards will keep them coming back for more. Here’s how to make the most of a new scheme, and use the opportunity for real growth. 

•  Define your objectives
  Is your aim to increase frequency of purchase? Do you want to speed the adoption of a new product, or build your brand and your database? ‘Ask yourself what you’re trying to achieve,’ advises Business Link’s (opens in a new window) John Grange, ‘and don’t proceed until you’re absolutely clear. Bear in mind that 80% of your business comes from 20% of your customers, so keeping that 20% happy is vital.’
  
  
• Maintain value
  Make sure your incentive is not just a simple discount (such as £2 off any purchase) – a good scheme should reward positive customer behaviour (higher spending or buying more frequently). For example, offering £5 off a £50 purchase might encourage increased spend. Your scheme must bring value to your business as well as your customer, and while the current climate has prompted a ‘scramble to discount’, this may have repercussions for the long-term health of a brand.
  
  
• Know your customer
  Use all the data you have at your disposal to create a clear picture of your target customers and their behaviour. Look at their purchasing history so you can tailor offers for products that might interest them. What do they do in their free time? Orange Wednesday has proved a highly successful cinema ticket offer scheme while ‘lock-in’ shopping events often produce good results.
  
  
• Design your scheme
  Decide what sort of incentive you’re going to offer – rewards or giveaways, coupons and vouchers, points, free delivery, sales promotions, recommend-a-friend or rebate programmes? What you choose will depend on your objectives and your target demographic. Make sure your company is geared up for the response and able to deal with the technical processes associated with incentive schemes. Gathering unique codes submitted via SMS can get complicated if you don’t have the right infrastructure in place.
  
  
• Budget carefully
  Try to account for every eventuality – if you need to take on extra staff to cover a response period, factor in the cost. If customers can’t take advantage of an advertised offer, your company’s credibility will almost certainly suffer.
  
  
• Communicate the benefits
  Promotion is vital. If your offer is not well promoted it will fail, so allow money for that in your budget. Regular communications are the most likely to turn one-off customers into loyal purchasers. There are many different ways to communicate with customers, including direct mail, email and text.
  
  
• See the big picture
  ‘Customer incentive schemes work best as part of a comprehensive customer care strategy and the offer of good overall service,’ says Business Link’s Grange. ‘They cannot, single-handedly, guarantee the loyalty of your customers.’ Incentives do not represent a quick fix to what might be a more widespread problem.
  
  Use the opportunity to define the data you hold about your customers and consider hooking up with other like-minded institutions through network or affiliate incentives. Joining a local rewards scheme could be beneficial, as could a reciprocal incentive scheme with a neighbouring or complementary business.

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