What exactly is incentivized marketing? Business Dictionary describes incentive marketing as using promotional devices or incentives to encourage the sale of goods or services in return for some sort of action, such as purchasing a product, signing up for a service, or submitting to a survey. To me, however, the term icky seems a lot more evocative of human motivation than the technological, calculation-driven, data-driven image that the business dictionary attributes to it.
I believe that incentives used in incentive marketing programs are just rewards given to people for doing a certain action. In other words, if you buy a house, you might get a gift certificate worth of things that you would otherwise not have been able to afford. If you go to the doctor, you might receive a check for a percentage of your medical bills or a discount at the local health food store.
Incentive marketing is really about giving something of real value to someone who wants something back in return, a discount, a gift card, a cash bonus, or anything else. The key is to make sure that the product or service being offered is something that people will actually purchase and use. I call this the incentive marketing key, because, in order for your business to be successful, you must give out gifts that people will actually value. These can be tangible rewards, but they can also be in the form of non-monetary rewards (such as "great customer support", "continued service", and "endorsement" among other things).
If you are in a business with only one or two prime members, then incentive marketing might be perfect for you especially if your prime member already has a long list of loyal customers. If this is you, then you have all the motivation you need to get people to your incentives, even if it's only by just offering them a free bonus. I call this the prime list-building incentive. It's important to understand that just because you don't pay them doesn't mean that they won't be motivated to do any buying, they probably will.
On the flip side, if you are in a business where you have a whole list of new customers or potential new customers as well as some existing customers, then you really need to diversify your incentive marketing strategy. You need to use different types of marketing incentives for each group. This is why many network marketers have multiple incentive marketing plans, each incentive type serves a particular purpose. If you haven't yet implemented a diversified marketing strategy, now is the time.
For example, let's say you have a large number of new customers in your downline, but you don't have a large number of high-quality leads (customer loyalty programs) or great commissions on those sales. That means that even though your incentive program might have a high payout, your compensation plan may not be very big. What you really want to do is offer an incentive that's a high payout, but low in value. This way, your incentive marketing program can serve a lot of people who have high conversion rates, but your actual payout may not be too high at least not compared to what you could get from a high payout incentive program and low in value.
Here's another example. Say you have a network of mostly independent contractors. One of your primary motives for creating your incentive marketing strategy may be the chance to reward these contractors for their loyalty. If your coffee shop offers them a free coffee loyalty program, for instance, you might want to offer them something else in return, a discount at your own coffee shop. This way, they will get something out of it other than just the free coffee loyalty programs.
Here's another example. Say you have a network of affiliates, people who promote your products for no reason at all. You can't expect them to give up some of their profits to help you out if they don't get a reward. An incentive might be their chance to get some exclusive freebies or the chance to attend a party. These are all incentivized marketing ideas that you can use to pull in people who have little incentive to join your affiliate network.
