The right incentive for the brand

Marketers are victims of fashion, just like any other group of people. So it is no surprise that consumers and staff are being offered a wide range of hi-tech premiums and incentives.

After all, this is the 21st century: and singing mugs, giveaway pens and cuddly toys are so last century, right? Well, no, not entirely. While the experts agree that hi-tech incentives – a term that encompasses items including ringtones, iTunes tracks, DVDs, computer games and even USB memory sticks, digital cameras, iPods and MP3 players – can deliver, they also point out that good old-fashioned 20th century freebies still have their place.

Kerry Bateman, managing director of communications agency WARL, says: “In our experience, both hi-tech and low-tech incentives can work – it’s just a case of making sure you choose the right one. It’s not really a one versus the other debate; like all marketing activity, the two key drivers are brand and audience.”

In the case of the brand, incentives must “reflect the brand equity and/or the theme of the initiative in question,” he adds. “This can be particularly important when dealing with, for example, an ultra-modern technology brand where your choice is pretty much made for you – a USB plug-in will almost certainly be more suitable than a free towel.”

The other side of the coin is the audience. Bateman observes: “We need to identify the most broadly compelling item for the defined audience to achieve the greatest level of uptake – and this can vary depending upon the absolute strength of the offer.”

But, he warns, “It’s also important to consider the payout issue – if you give away a free iPod, everyone will want one, but there will be no payout. It’s a balancing act to find an item that is cost-effective but which will appeal to your target market. If you get it wrong, you could devalue your brand to a significant degree.”

Sticking to the objective

Adam Maher, director of loyalty at the UK’s largest online loyalty company, ipoints.co.uk, also stresses the need to ensure the premium or incentive matches the brand and delivers against the objective. He suggests three steps to ensure the best fit with the brief.

First, “consider the relevance of the incentive to the profile, interests and motivation of your target audience. An incentive that will appeal to common characteristics can deliver significantly more value for the cost. For example, offer games to appeal to a younger audience, money-off vouchers to motivate budget shoppers, and travel accessories for frequent flyers. Where you are trying to appeal to a diverse audience, consider incentives where the customer can choose the reward most meaningful to them, perhaps vouchers for their favourite store or a reward catalogue.”

Second, “ensure the incentive reflects your brand values and how you want to be perceived. Use hi-tech gadgetry to be seen as innovative and cutting-edge, luxury goods for premium and aspirational brands, and perhaps ringtones for a fun, irreverent image.”

Finally, “consider the desired customer behaviour that you want to motivate or be associated with. Use free samples or a trial for new frequent use or subscription products, provide recipes, guides or accessories for a richer customer experience, or encourage loyalty through a points based programme.”

Jonathan Shilling, business development director at Grass Roots, believes the first step is “to understand the target audience for any incentive and be clear about the behaviours that you wish to influence within this audience.” Incentives reflect on brand identity and how it is perceived and valued by the target audience, he stresses, so there must always be a clear match between an incentive and “brand DNA”.

Timing is also hugely important, in Shilling’s opinion, and “understanding prospect and customer lifecycles is key to providing a context for delivering the proposition at the right time. Simply offering the latest must-have, hi-tech item may not be enough. For example, “when targeting the youth audience, while technology and gadgetry work well, there is an increasing pull for incentives that provide privilege or experience, enhancing status within their peer group,” he says.

Hi-tech problems

Of course, with hi-tech promotional items, there will be problems. Ray Jobsz, managing director of EIC (the Electric Incentive Company), stresses that electronic goods can pose particular problems for sourcing companies, and even more for marketers who try to do it for themselves. “It always surprises me that year after year companies fall foul of the same pitfall,” he says. “Many companies try to buy direct from the Far East, with no guarantees or quality controls. Some attempt to source large numbers of goods through consumer channels and are inevitably left waiting on delivery, meaning the promotions are delayed or even cancelled.”

But he agrees there is a growing demand for hi-tech incentives: “Increasingly, we are seeing hi-tech products being given away. This is a result of a combination of falling prices and a consumer desire for the latest technology.”

That means marketers have the opportunity to “appeal to huge audiences offering a high perceived-value promotional gift, so securing lucrative future customers.”

And that focuses attention on one key issue: being able to deliver on the promised incentive. As Jobsz warns: “One thing to be avoided at all cost is launching campaigns despite having sourcing problems. The damage this can cause to a large corporate reputation is beyond measurement.”