Marketing News: Offering free gifts can encourage purchases and brand loyalty

Marketing News: Offering free gifts can encourage purchases and brand loyalty
Offering free gifts can encourage purchases and brand loyalty
Consumer-facing businesses increasingly recognise that offering a high-quality product or service isn’t enough to stand out in a crowded marketplace. Customers are seeking added value where they can – and it’s this that is heavily influencing whether or not they choose to part with their money.This has been highlighted in a fascinating study by 360insights, which found the majority of people would want to know about what added incentives are on offer before buying a home or garden appliance. So let’s look at the figures in more detail and see what lessons marketers can learn…

Three-quarters look for incentives before parting with money
The study states more than three-quarters of UK adults look for incentives such as free gifts, prepaid cards, cash rewards and discount codes before making an investment. Meanwhile, almost 3 in 10 admitted that rewards and incentives would be likely to prompt them into spending money.

Customers must want what is being offered
However, the nature of the reward on offer will be critical if it is to elicit the desired response. Indeed, 44% of people polled by 360insights said they would have to want the incentive on offer. Furthermore, 36% said it would have to be no effort to get the incentive, while 35% said any reward must offer genuine value to them.

For all businesses on-going customer dialogue is a given. Whether you seek feedback through social media, email or postal questionnaires or a quick phone call, you should regularly ask about the incentives and rewards customers enjoy. Additionally, firms could test a variety of rewards with different customer groups and see which performs in both the short term, and arguably, more importantly, over the long-term.

Incentive programmes can pay off
It’s often said that the most effective form of marketing is a word-of-mouth recommendation, as people tend to trust the views of their friends and loved ones more than a brand’s own marketing material. It’s therefore notable that the 360insights survey found that 29% of consumers believe an incentive programme would prompt them to discuss a company with people they know. In other words, offering a few freebies could reap handsome returns if it helps to encourage new customers to get on board.

Be careful with cash rewards
While cash rewards might seem like an attractive proposition on the surface, the study pointed out that this can prompt some cynicism from customers. More than 1 in 3 respondents said they were put off claiming a cash incentive as they felt it could be a scam and they might never get the reward. Businesses might therefore be on much safer ground by offering promotional gifts, such as a box of chocolates, an item of clothing like a hoodie or fleece or a something quirky like a Rubik’s Cube or fruit infuser water bottle.

As John Bird, General Manager of 360insights, observes: ‘This research highlights a serious challenge for businesses. On the one hand, we can see that rewards and incentives play a huge role in swaying consumer purchase decisions. But, at the same time, consumers expect this experience to be effortless and valuable at a personal level.’

Since different customer groups may respond to different types of rewards, you should continue to track competitive offers, schedule in time to trial new ideas and hold regular dialogue with both your customers and your customer-facing colleagues.

Sources / Further Reading
Most UK shoppers research discounts before buying for their home or garden: study Internet Retailing