When we think about incentives, we often think about money. That to incentivise a customer to buy, we have to offer a discount. Or to incentivise a member of staff to work late or quicker, we need to offer them a bonus or overtime pay.
In a culture so bound by monetary value, it’s no surprise that this is the case. Want something delivered today? Sure, you just have to pay for it. Want to make the sale immediately? No problem, just remove your profit margin.
I could write for hours on our relationships with money, and especially on the ‘need to earn more and spend less’ mentality that I often hear from clients. I really could, but I’ll save it for another time.
Because right now, on the cusp of Christmas and Black Friday (a week today), I want to suggest that encouraging customers to buy is not simply about 15% off, or buy one get one free.
I was talking to a client the other day, and I asked, ‘What incentive can you offer the customer?’ She immediately went to discounts and giveaways, which made me realise that that’s still the first reaction to so many people who want to boost sales in the short term.
But let’s just pause for a moment.
There are lots of reasons customers decide to buy a particular item at a particular time. There are many millions of pounds spent on trying to discover customer motivations and how to capitalise on them, but we don’t need that research. We already know.
Customers buy because:
- They like a product (for themselves or someone else)
- They trust the vendor/maker/seller
- It matches their value perception of the product
- It’s the right time for them to buy it (they were just thinking about something like that for baby niece Lela, and this fits right in)
- There’s a time limit on the availability of the product (in essence, FOMO)
- And yes, because there’s a money-saving opportunity
Customers are moved to make a purchase based on one or all of those reasons, or variations of them. And every customer has their own beliefs and values that make them different. Some customers are generous towards others, so it’s very easy for them to make a decision to purchase a gift, but much harder for them to decide they’ll buy for themselves. Some customers are the exact opposite.
And I say all this knowing that Black Friday is a good opportunity to boost sales, and that sometimes a discount or a giveaway boosts engagement and results in sales anyway. You can make good, strong business decisions to offer a monetary incentive, but let me just offer some thoughts before you do:
- Do you always offer discounts and giveaways to boost sales? Doing this regularly may de-value your brand. Save discounts for special occasions, and be creative about giveaways. Make them generous and focused on a particular goal (eg getting rid of old stock, or building your email subscriber list).
- Do the customers who are buying your discounted product also buy from you at full price, or will they in the future? If your discount attracts people who only buy from you when your products are on offer, it might be a sign that you need to add in a lower price point (that still offers you at least 25% profit).
- Which products can take the discount? Both in terms of profit margin and sales status – bestsellers often don’t need to be discounted to be popular, and are more likely to be de-valued by a big discount.
- Can you save discounts for special occasions? Like twice-yearly sales, or birthday sales, or launch discounts. You may find it better to offer discounts in a strategic, planned way, rather than simply as a push to get people to buy because it’s slow for you right now.
I’m not saying never offer discounts – just be confident they’re the right thing for your business right now.
And if you need a few ideas to offer non-financial incentives, here are some goodies:
- Buy now, while stocks last! A great one for Christmas, and definitely motivated by FOMO.
- Don’t end up in the dog-house this Christmas (buy one of our products instead). A good one for targeting men at Christmas.
- Here’s something extra-special that’ll suit you really well. Customers need reminding that you understand them, and understand what they’re looking for.
- How can you even resist something so beautiful / cute / useful?! Especially good for baby and pet products – things that tug at the heartstrings. Or remind customers how well you solve a problem they’re having.
- You can get this by tomorrow if you order now. Be explicit about your turnaround times, especially in the run up to Christmas. Speed sells, especially for desperate customers.
- Similarly: you can get this sent to a friend tomorrow, and it’ll be gift wrapped. Mid-December marketing.
Incentives are basically anything that completes this sentence: Buy now, because…
You can finish it however you want! You can use whatever little extras you like. You can also simply point out how awesome you are. ‘Buy now because our customer service is great’. ‘Buy now because this is a bestseller and we know people love it’. The options are really endless.
But I encourage you to see incentives differently than simply money off.
What’s your experience? What has worked for you? What hasn’t? Where do you get stuck? I’d love to hear!