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What Is Incentive Marketing?

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  • Written By: K.C. Bruning
  • Edited By: John Allen
  • Last Modified Date: 04 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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Incentive marketing uses offers of additional items or services to encourage a potential customer to buy. This can include things such as gifts, special discounts, or premium quality items. There are also long-term programs which can be used to encourage repeat business. The primary goal of incentive marketing is to encourage the customer to behave in a certain way, whether by purchasing a specific product, purchasing at a certain time, or some other action that helps to boost the vendor.

One of the most popular kinds of incentive marketing is to offer a gift to customers who purchase a certain amount or by a specific deadline. Often the item is closely related to the product for sale. For example, a cosmetics bag may be offered to customers who buy a certain kind of make-up. In many cases, this kind of a gift will be used as an incentive to attract new customers or to reward long-term customers for their loyalty to the brand.

Incentive marketing can also be a long-term process. Many companies track customer purchases so that they can offer perks for a certain amount of repeat business. One popular method is the punch card system, where a customer gets a discount, free item, or other incentive after a set amount of money is spent or number of purchases is made. This can be tracked on a card that the customer or vendor keeps or via a computer system managed by the vendor.

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A company may also use a special event, such as a contest, as an incentive marketing strategy. These kinds of events can vary widely, but for the most part they have a theme that is closely related to the product and which is geared to inspire the target audience to participate. Sometimes purchase of the product is required for participation in the event. Promoting the event, rather than the product, can also be an effective way to draw attention to the company without making a hard sell.

Incentive marketing may also be used internally to boost employee moral. This can include daily activities such as reaching certain performance levels or sales goals. Offering incentives for helping to recruit new employees or drawing in new customers can also improve business for the company. These programs can be a lighter, less complex complement to the more comprehensive process for annual performance reviews and bonuses.

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