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.