An Offer They Can’t Refuse: How Incentives Can Make And Break Brand Loyalty

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It’s not exactly breaking news that consumers like to save.

The big takeaways, then, from ActiveCampaign’s latest study with Ascend2 are how consumers prefer to receive saving incentives from companies and how incentives are tied to — or can undo — brand loyalty.

“Incentives have long been a favored shortcut to growth and loyalty for ecommerce merchants,” begins the study, titled “Coupons, Discounts & BOGOs (Oh My!).” “Those who fail to plan carefully, however, often find that path filled with terrors just like Dorothy’s in The Wizard of Oz. Only instead of lions and tigers and bears (oh my!), the terrors ecommerce merchants and marketers encounter are unprofitable promotions, missed sales projections, and — worst of all — dissatisfied customers who share their experiences liberally on
social media.”

Email remains consumers’ preferred channel, with 77% of those surveyed wanting coupons sent that way as opposed to SMS (31%) and social media (17%). Once a coupon is received, 85% reported that they’ve followed through to purchase even from a store they had never purchased from before; 97% said they’d like to receive more coupons from their favorite online stores.

And what would consumers do for a coupon? 64% would sign up for promotional emails and 47% would click Like on social media, and 39% would share a store’s offer with a friend.

“A well-crafted incentive strategy can help businesses stay top-of-mind amidst the noise in today’s competitive digital marketplaces,” says the study, which found that brand loyalty is “up for grabs” when price is the top priority for four out of five online shoppers.

(Source: ActiveCampaign)

Of the enticements that would lead consumers to buy from a beloved online store’s competitor, 70% could be swayed with a 20%-off coupon, 63% with free shipping, and almost half (49%) with a BOGO offer.

“Loyalty is a marathon, not a sprint,” the study says. “Even when you’ve worked hard to build loyalty with customers, it will be tested. 98% of the consumers we surveyed shared that there was at least one type of coupon, discount, or situation that could get them to try a competitor.”

The study suggests embracing the threats to loyalty and focusing on “your key, competitive differentiators” such as customer service, unique offerings, and customer service responsiveness.

“Offering the right promotion to the right audience at the right time via the right channel is critical for growing your customer base, driving retention, and increasing sales,” the study says.


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