Use of Incentives: Proceed with Caution

Effective use of incentives like coffee cards and gas cards requires both an understanding of the strategic context and a feel for customer behavior. A simple assessment (high/moderate/low) of key variables will provide a clear picture of the applicability and potential desired magnitude of a campaign incentive.

The three most important variables (and their assessment scale) when weighing the value of incentives are:

  • The strategic value of the action to the company (a “high” assessment supports incentive use)
  • The perceived benefit of the action to the respondent (“low” supports incentive use)
  • The barrier(s) to desired action (“high” supports incentive use)

For example, compelling responses to a web-based market research survey have:

  • Moderate strategic value since it’s several steps removed from revenue generation
  • Low perceived benefit to the respondent
  • A high barrier to action assuming the survey is more than a few questions long

Together, these ratings point to this being a solid use of incentives.

On the other hand, a poor application of using an incentive would be to drive someone simply to visit a website or respond to an email: the strategic value is low because providing an incentive trains the customer/prospect to respond to incentives rather than content, the perceived benefit to the respondent is moderate, and the barrier to action is low.

Falling marketing spend among financial institutions

Over the past year, most leading financial institutions have cut their marketing spend. As these firms face rising provisions for losses and declining revenues, they are look for other ways to cut costs, and marketing spend is squarely in their firing line.


Banks are pursuing different approaches to cut marketing spend, including: altering the media mix to focus on less expensive media; and reducing/eliminating marketing of certain products (e.g., many banks have pulled back on credit card marketing over the past year).  In addition, banks should focus on getting the most from their marketing, by ensuring that it is synch with other aspects of their business, particularly sales.

A Strategic Framework for Search Engine Optimization

Search engine marketing can be an analytical direct marketer’s dream: it’s quantifiable, trackable, and easy to scale up or down. However, scalability can quickly result in SEM becoming an exercise in “pruning the forest”—a never-ending tactical effort with little bottom-line impact. Raising or lowering bids, concocting new text ads, trying new landing pages—which all have value and can be effective tools for optimization—become random acts of tweaking unless they are applied on a strategic basis.

A strategic approach begins by establishing an analytical structure for organizing SEM performance data so that it brings to light the ad groups or even keywords that should be the target of performance-boosting initiatives like text ad and landing page testing. For example, a strategic approach to managing an organic/paid blended initiative could focus on balancing “click share” (the percent of impressions resulting in a click-through) with cost-efficiency. This would enable a manager to find sub-optimized keywords or groups—ones that are either generating few clicks or very expensive clicks (i.e., high CPC paid)—and to develop specific, targeted tests/changes for improvement.

In addition to enabling you to keep the big picture in view without losing sight of the details, having a strategic approach is a great way to demonstrate and quantify results. Overall search engine performance should go up as a result, but it is the keyword(s) targeted through the approach that will make the most powerful cause-and-effect case.