By Jordan Kinson, Account Manager at Awin
The marketing landscape continues to change and evolve; in the past three years we’ve had several unprecedented events that have fast-tracked predictions, as well as completely thrown some off the rails. These events have thrown things at us, like store closures, quarantine, and supply chain issues; all of which resulted in immediate and long-term impacts on consumer trends and habits. Sometimes it feels like as we’re coming out of one challenge, another rears its head.
The question retailers are asking is, how can we pre-empt and prepare for the unpredictable? Whilst we might struggle to make plans for every curve ball, retailers can adapt strategy when it comes to incentivisation.
The case for brand incentives: humans helping humans:
Common misconceptions around incentivisation include concerns over brand image, as well as incrementality. In times of crisis, you can flip a lot of this on its head. This is not to suggest that companies dive straight in and apply a store-wide sale, however, dipping your toes in can create a feeling of exclusivity among consumers when a discount or reward is applied. Brand image is a fluid construct, and strategic rewards can uphold the quality and value of your products/services, and also convey empathy and symbiosis with your customers. There aren’t many better ways to humanise your brand than by understanding where individuals might benefit from a little help.
The conversation around incentivisation strategy can always be had through the lens that captures the condition of our industry, and in a wider context, our world. Throughout tough times, incentivisation strategy has the potential to take on different forms. Brands typically want to encourage people to spend money, which can be particularly tough when times are too. Therefore, flexibility in incentives is sensible as it is compassionate, both of which are the qualities many people look for when it comes to companies and people.
The difference between customer loyalty vs loyalty to customers:
A prediction that is being loosely thrown around ahead of peak Q4 activity is that with everything going on in the world, we are going to see a decrease in brand loyalty. Shoppers tend to do what is best for them given the external factors that might be impacting them. This probably won’t come as a huge shock to brands; most already understand that an individual will likely look for the best deals that allow them to shop without financial strain.
So how can brands combat this? Simply put, they can show a little loyalty back. This isn’t to say that brands shouldn’t focus on customer acquisition and retention, as times will undoubtedly be tough for them too. But, in cases where incentivisation might have been a closed case previously, re-opening it is a way of showing your consumer base your value for them in turn.
Learning what resonates with your customers can open up avenues for increased brand loyalty, brand awareness, and overall customer appreciation, which are increasingly hard to come by when the market or the world is experiencing turbulence.
Essential vs non-essential spending:
An extra layer to the moral quandary many customers face is when we take into account the idea of essential versus non-essential spending. For example, how can someone justify spending money on video games at a time when energy bills are said to be sky-high? This predicament will resonate across many industries as customers ponder what products are important enough to purchase.
There is of course reason for non-essential spending. The decision to do so might always be paired with the concept of living within our means, and never putting ourselves or loved ones at financial risk. In moments when the world is looking less and less sure, we deserve peace of mind, so incentivisation is one avenue that can make this more possible, often providing sure footing for potential purchasers.
It is important to remember that incentives don’t have to be discount-led. Retailers can look to offer increased cashback, exclusive gifts with purchases, competitions, or buy now pay later to make high AOV purchases more appealing. There is variety and room to play with this type of promotion; brands can look to integrate rewards portals into their incentive strategy allowing unique benefits for customers that weren’t previously possible. If brands consider expanding their loyalty offerings, in turn, they might see increased customer loyalty.
Promoting this way tends to provide a multitude of benefits, whether it is in the form of encouragement that allows people to feel comfortable buying things that they want, or perhaps more unexpected ease when buying something desperately needed. Things like this can make silver linings seen on a day filled with grey clouds.
The importance of a flexible strategy:
Most consumers can spot insincerity from a mile away. Whether it’s through tone of voice, messaging, or product offering, brands can strategise how and when to use incentives. We have already spoken about the need to be flexible, but it is equally important to be prepared. If your brand doesn’t want to be seen as frequently discounting, it can appear insincere if retailers offer this only when there are external influences. Also, customers may altogether miss it as they aren’t expecting any kind of offer.
If you choose to incentivise, you might want to think about how to do it, and how frequently. Doing so will inform your customers and make your approach appear more organic. Whether you look to use a promotional calendar or discuss internally, you can map out key dates and points where you can look to trial types of promotion, making you more ready and prepared to implement incentives in the future.
The idea of the next few months being very tough are not hard to imagine, and the idea of hard times beyond that is equally easy to comprehend, even if it is unsettling. Brands can benefit from an innovative incentive strategy during times of crisis as much as consumers can. Thought processes and customer behaviors are often reliant on different factors during times like these and incentives are one of the simplest pathways to understanding what will help someone purchase. After all, incentives at their core are just encouragement and motivation, something which everyone could use a little bit more of when times are trying.