Incentives work when made into sensible offers for sensible people
Incentives work when made into sensible offers for sensible people – this has worked for UK Vending Ltd for the past fifty profitable years in business
It is astounding how so few people realize two things:
1. Incentives pay, when used wisely.
2. If you use them all the time you cheapen your brand.
Why do they pay? Because generally you get all the people you would have got anyway – plus a few you wouldn’t have and the extra ones convert into customers at much the same rate as the others.
Victor Ross, Chairman of Reader’s Digest once said: “I have never seen a relevant incentive fail to pay for itself.”
If you’re not trying incentives, do.
If you are, test alternatives (it may make a huge difference).
The first question is obvious but often ignored: why do incentives work?
There are three reasons.
1. They overcome fear – of being sold something the prospect doesn’t need or can’t afford.
2. They overcome laziness.
3. They give an excuse for trying you.
For all these reasons they should be prominent.
Always describe your incentive, and say what it’s worth. If it costs nothing, it’s worth nothing. The more desirable it sounds, the more replies you’ll get. The more it’s worth or the greater the perceivable value, the more people want it.
Try more than one incentive. You can have one for replying, one for replying within 14 days, one for buying two or buying the luxury version, trying another product or service or recommending a friend.
Try a few things people might lose – a threat, if you like. It may work even better. In fact studies suggest it does based on the ‘bird in the hand is worth 2 in the bush’ principle or ‘fear of loss is greater than desire to gain’.
• They have to buy by a certain date, or on a certain day.
• There are only so many left.
• It’s a limited edition.
• It’s restricted to certain privileged customers.
People are cynical. They think the cost comes out of the product. Always say why you’re being so nice.
• As a reward for doing something.
• To encourage them to try.
• Because “we find it’s the cheapest way to get new customers”.
• Because it’s our centenary.
What makes a good incentive?
• The Golden Rule: add value, rather than cheapening the brand.
• A free gift adds value; repeated discounts cheapen your brand.
• Discounts are better for acquiring customers, or rewarding them.
• Use them sparingly.
Martin Button is the Managing Director of UK Vending Ltd, Britain’s longest serving vending company. UK Vending Ltd (UKV) is a national supplier of prestige vending products and a provider of unique financial packages supporting UKV sales. UKV is a family owned business started some fifty years ago by Martin’s father John. It was the first vending company anywhere in the world hosted on the internet when most had not yet heard of the World Wide Web. One of Google’s ‘naturals’, UKV had an online shop before Amazon or Ebay. UKV had a successful background in email marketing before most companies had begun to understand its power. Imaginative marketing coupled with excellent staff recruitment and management, planning and customer service may be key to UKV’s long-term success in this competitive market. However, sheer business savvy and insight is what makes it work.