The term incentive marketing company was coined in the 1920s by Mark Twain. He used the term to explain the power of consumer rewards. The power of rewards can come in many forms. They can be monetary or non-monetary, it can be tangible or intangible, but the key ingredient is that it creates an incentive for performance.
To explain the theory, the Incentive Marketing Association utilizes simple yet meaningful terms. It is essentially a structured approach for individuals to perform something that benefits them. It rests on an underlying psychological formula, which says that where there's motivation and ability, there tends to be measurable performance. You might put it another way. Where there's a reward there's accountability. But the incentive marketing campaign isn't just about rewards. It's about the whole process of getting people to act. It's about the whole idea of marketing in general.
The best way to explain incentive marketing is to think of it in terms of a restaurant. If the manager put a customer a free meal after they pay the bill, they wouldn't be doing their jobs properly. They would be sending a mixed message, encouraging some customers to pay up, while penalizing others for not paying up right away. The manager doesn't care whether the dish was free or not, the important thing is that he gets his money back.
The same principles can be translated into incentive programs. If you're going to create incentive programs, you need to understand your target market and know exactly what kind of behavior you're trying to promote. Just as with restaurant owners, you have to know what kind of behaviors and intentions you want to promote to maximize your chance of getting paid.
To design incentive marketing campaigns, you first have to know the people you're trying to encourage to take part in your program. Your program members are people who have an interest in your business. You might be looking to motivate new customers, increase sales of a specific product or encourage employees to take on more responsibility. Understanding your program members will help you design incentive programs that achieve your goals.
For example, if you run a rewards program for Starbucks coffee drinkers, your incentives might include receiving a free cup every time you refer a friend. However, you might also give a free Starbucks coffee to a loyal customer after they make a purchase from you. Understanding how you can split the rewards up so they have more incentive to participate in your program is the most important part of your incentive marketing strategy. You can use surveys and rewards programs to help you learn how your customer's interests overlap with your own.
The next most important aspect of developing an incentive marketing company is understanding what brands and services are well-suited to the medium. If you don't already offer coffee, for instance, it would be difficult to create incentive marketing campaigns for other grocery store brands, or for other household brands outside of your core customer base. This is because coffee is the one product that more people rely on for their morning start. For this reason, you want to understand the preferences of the people who buy your food and beverage products, so you can design incentive marketing campaigns that target them specifically.
Finally, you have to consider the effectiveness of your incentive marketing campaign. If you're handing out free cups of coffee, for instance, but the recipients of these cups end up putting the empty cup down on the counter before they've had their coffee, this isn't a very effective incentive marketing strategy. On the other hand, if you provide a bag of candies each time someone makes a purchase at your bakery, this could be a very useful incentive marketing campaign. Understanding what your potential customers need, and meeting that need is the most important part of creating an incentive marketing campaign. Incentive marketing with a bag of candies may work, but not if you're targeting people who will just put the candies away.