Incentives that Work: How Promotions can Boost your ROI

Promotions are never more attractive to consumers than when money is tight.  In a tough  economy, incentives can mean the difference between making a purchase and opting out of the transaction. 

At the same time, competition for these consumer dollars is fiercer than ever.  So, companies who may never have had to conduct promotional campaigns are now at least considering them.

Promotions can boost lagging sales and lure more customers to you.  But, like any other marketing tool, they must be used correctly or they may do more harm than good.  How to develop an incentive program that gets customers to act?  Here are some helpful tips:

1. Have a Plan
There are a few common kinds of incentives.  You can do some or all of them, but consider starting with just one to get a feel for what it takes to manage a promotional campaign and how well it works for your company:

• The trial offer.  This includes giveaways such as free product samples and downloads.  These could be scaled-down versions of your usual products, services and/or content.  For example, you could offer a free short ebook excerpt or a mini consultation.  This costs less because it gives consumers a taste without giving away the farm.
  
  
• Discounts.  Always popular, discounted products and services help consumers stretch the budget a little further.  If you choose this option, make sure that you find the “sweet spot” between minimal (and ineffective) discounts and ones that cost you too much.  Consider coupons, a favorite with buyers making purchases in a poor economy.  Printable online coupons make a great reward in exchange for an email and online coupons are easy to use.
  
  
• Special events. Capture the local market by planning an event in their areas.  In-store parties, by online invitation only, and one way to do this.  Attend trade shows, where you can offer show specials for attendees.  Lure them with a wine and cheese event, grand opening or other low-cost gathering.

2. Identify your Markets
Each demographic has its own unique needs.  Match up your incentive to the target audience for greater success.   One way to segment your customers is to determine your goals for the promotion.  Is the focus on new customers or retention?  Do you want to recapture people who abandoned shopping carts or opted out?  Or, are you looking for business during slow periods?

Once you know what your goal is, tailor one promotion to that goal.  For example, you could offer online coupons to those who’ve shown interest in the past but never actually made a purchase.

3. Track Results
Analyzing results on a regular basis is the only way to know how well your promotions are working for their target markets.  Set your goals in terms of hard numbers, and see how close you’re getting.  If you are achieving those goals—whether it’s x number of new emails, a certain percentage increase in new sales or success with old or inactive customers, your promotion has to justify its cost.  So, track the results carefully.  If you need to change gears you’ll know exactly what you need to do.

Promotions have the power to get customers to act, breaking the holding pattern that so often goes hand in hand with a combination of tight budgets and information overload.  When it comes time for your market to make a choice, an effective incentive program can be the factor that tips the balance in your company’s favor.