What’s the Magic Number? Offering the Right Incentive at the Right Time

René James-Barriteau

René James-Barriteau

Only a small percentage of shoppers are ready to buy immediately after subscribing to your list. Moreover, many who eventually make that first purchase will be strongly influenced to do so by the incentives you offer. As consumers are now programmed to hunt for discounts and promo codes before they make a purchase, it’s even more important to focus on promotions that help your bottom line.

So what’s the best place to include an incentive? It can vary. Let’s look at some of the campaigns where you can include a promotion and what to consider for each one in order to maintain a positive relationship with your subscribers and protect your profits.

Welcome Series

As digital marketers, one of our main goals is to attract new subscribers. We want that permission to connect with them beyond the basic transactional messages, sending new promotions and valuable content their way on a regular basis. So what offer do you promote to encourage new subscribers to sign up? It’s important to find a balance here. Go too high with the first incentive in your welcome series, and you limit yourself from rewarding customers further into your relationship who feel they deserve a better deal. Too low, and they may not bother to sign up, choosing instead to wait for a more appealing incentive.

Registered But Not Purchased Series

The consumer recently subscribed to your list but hasn’t used the related time-based incentive to purchase yet. This is a crossroad in the relationship. Do you craft a series to get them to make that first purchase or throw them into your pot to start receiving newsletters?

Hopefully, you’ve resisted the temptation to immediately start sending non-personalised newsletters if subscribers still haven’t purchased and instead attempted to capture their interests via a managed preferences campaign in the welcome series. A subscriber is more likely to buy if you send them relevant content they’ve expressed an interest to receive.

If you’ve still had no luck engaging them, save yourself the time and money of sending unopened emails. Take one last chance with an exclusive offer now (similar to reactivation) rather than 6-12 months later. If they convert, carve out a segment for these customers and talk to them differently.

Abandoned Basket Series

If a customer purchased after sign-up and used an incentive from your welcome series, this is your next opportunity to offer an incentive to get them to purchase again. How do you decide what to offer? Consider how much you offered to get them to purchase the first time. Review their total spend and average order value. What incentive would be reasonable to get them to purchase again? Keep in mind some customers will have already reached your desired total spend after two orders, even without an incentive.

For example, if you offered 10% off at sign-up, it would be reasonable to offer a 5% discount on the third email they receive in your abandoned basket series. On the other hand, if they didn’t receive the discount code in the welcome email, 10% would be reasonable as it’s their first engagement with any of your offers.

Post-Purchase Series

Post-purchase messages are a great way to build customer loyalty and generate revenue. However, it’s important to consider the path the consumer took to get to you. What offers were they exposed to? How did this affect their previous and future buying decisions? For example, is this their first, second or tenth purchase? What is their average order value?  Does the personalised and relevant offer being served push them outside of their average order spend? If so, what incentive can you offer to keep them within their spending budget but also retain a profit margin for your business?

Birthday or Anniversary Purchase

If you ask for date of birth, don’t send a blanket offer to all your customers during their birthday month that is less than the discount code you’re offering to new subscribers. Would you feel special knowing that the business you’ve spent money with for the last five years is prioritising someone who hasn’t yet spent a dime? The same rule also applies for your anniversary email. On special occasions, ensure the offers served are personalised and unique, based upon the customer’s loyalty, engagement and overall spend with your business.

VIP Program

By the time customers are eligible for your VIP program, they may have already been exposed to a number of these promotional offers. With this in mind, what should your program contain to entice a user to become a VIP, and more importantly, stay loyal to your brand? I believe in the following strategies:

  • Exclusive benefits: At the very least, try to offer incentives that are similar to what they were exposed to before they joined. In fact, some should be standard with each purchase. This entices consumers to join as they are regular buyers and can calculate the saving benefit of membership.
  • Special offers: Create some excitement around the program. After all, these are your best customers, and this will likely make them want to stay in the group. Offer incentives that are available exclusively to VIPs, and give examples of the types of promotions members can expect, as well as when to expect them.
  • Super VIPs: People are competitive by nature, yet in marketing, we fail to capitalise on this fact. Based on the products or services you provide, what ingenious but viable incentives can you introduce to keep your customers satisfied and spending with you? For example, Ferrari offers an elite driving club for members who have purchased at least five Ferraris. In return, you receive memberships to a super car secret society that’s capped at 300 active members. Perks include first dibs on limited edition models and direct door-to-door car delivery. Other benefits include invitation-only track days and events, and behind-the-scenes-tours of the Ferrari factory in Modena, Italy.

Incentives are a great way to encourage customers to make a first or repeat purchase. However, before you embark on sending that first email, it’s imperative you give your incentive matrix some real consideration and integrate it into your marketing strategy the right way. This will help safeguard your profit margins and ensure you reward the customer correctly based on their loyalty and actual spend, not just the singular interaction taking place.


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