While it's always exciting to see your customer list grow, it's your existing customers that’ll ring up the biggest dollars for you. In fact, it costs at least six times more to woo a new customer and make that first sale than to sell an existing customer. That's why it makes perfect sense to offer incentives to new customers to invite them in and bring them back again and again.
What Are Your Customers Hungry For?
The answer isn’t always cupcakes. Although cupcakes are never a bad idea (who doesn't love cupcakes?), some customers are looking for information or are more interested in saving money. The incentive you choose should reflect your business and answer your customer's needs and wants.
The most popular incentives include:
- Cash back
- Discounts on targeted goods/services
- Free shipping
- Free swag
- Loyalty rewards
- Referral bonuses
- Co-branded deals with complementary goods/services (buy milk and get cookies at half price)
The Incentive to Offer Incentives
The best reason to offer incentives is to spur flagging sales, but that's not the only reason you should consider it. As part of your overall Growth Cycle Marketing plan, you'll have the opportunity to contact your customers consistently, without pestering them...to give ‘em a new reason to come back to your store or website and explore, or to participate and engage on social media. Keeping customers engaged is a great way to keep their business and incentives are a tried-and-true engagement method.
For new customers, think in terms of outselling your competition. Your job is to lure customers away from other shops, so your cupcakes should be bigger, sweeter, and maybe have bacon on top. Offer up something that's really hard to turn down.
Free Stuff Fail
Some companies manage to win and fail at the same time with incentives programs. DIRECTV, for example, offers a great referral program: invite a friend and get a discount for a year—and your friend also gets a discount. (Win!) They also offer their popular sports package free to new accounts. Existing customers pay for the same service…a lot. (Fail.) To add insult to injury, after the first year of service, they charge automatically, whether you ordered it or not. It's probably a good idea to offer incentives that aren't designed to tick off existing customers and don't come with pricey strings.
It's like a yummy-looking cupcake with anchovy filling. It looks like a great deal, but it ultimately leaves a bad taste in your mouth.
Analyze Your Measurable Results
Once you've launched your incentive program, it's important to watch the numbers. How's your campaign performing? Are opens, clickthroughs and conversions up? If your numbers go up, you're doing it right. If there's no change, consider mixing it up. If your open rates are low, you may want to try different subject lines or experiment with the best time to send emails. If, on the other hand, your emails are opened but customers aren't responding, the problem might be that your content is not compelling or your CTA needs to stand out more.
Figuring out what incentives work best for your business won't be rocket science. If you're paying attention, you know what your customers want. You just have to figure out how to give it to them...and still make money. Consider the long game, and remember, when you're passing out the cupcakes, put your existing customers at the front of the line so they don't miss out on the best flavors. They might be delighted to discover something new from you and they've already sampled your tasty wares.