All marketers know that it’s a bad idea to give away something for nothing. Whenever the possibility of incentives such as product samples, lucky draws or other free items is mentioned, many react strongly: “We don’t want to rely on incentives as a crutch,” says the marketing manager.
It is true that incentives can be used as a crutch, but not using them at all means throwing away a powerful tactic in a marketer’s arsenal. Brands are competing in an ultra-crowded space and consumer attention is being pulled from the moment they wake up to the moment they fall asleep. “Free stuff” is a compelling piece of content that grabs attention. Free is good.
But how do we avoid using incentives as a crutch? In evaluating incentives, we need to address two factors: consumer consideration effort and incentive value.
Factor #1: How much time does my customer spend evaluating their options?
The key deciding factor in whether or not to offer an incentive lies with the audience, and how much time they spend considering a given brand. Soap, soft drinks and tissues are what economists would say are fungible, or replaceable goods. 99 times out of a 100, those goods lack differentiators that the majority of an audience will care about. And in those cases, no amount of trial will “convert” an audience.
In other words, your soap is not a religion. Strategically, your marketing dollars are better spent with other top-of-mind activities such as point-of-sale activities or short pieces of compelling content.
In high consideration markets however, much research goes into the purchasing process. For instance, according to GWI research, smartphones are some of the most highly researched consumer products across the world. Any item that requires a higher level of consideration is a good candidate for incentives because at some level, getting the product into the hands of the consumer is an ideal strategy. This is true for big ticket items like smartphones, but it’s also true for grocery purchases like diapers. We will see the distinctions among products with the next factor.
Factor #2: How valuable is this incentive I’m offering?
There are two dangers when offering an incentive. The first is offering something that lacks value. This point is obvious: If you offer something worthless, the only engagement you’ll get is from your agency partners sharing the content with their friends on Facebook.
The other danger is offering something too valuable in exchange for a low effort piece of engagement for your audience. Offering an all-expenses paid holiday to Europe for signing up to a newsletter is a great way to build a low value CRM database full of people who just want free stuff.
So what do we offer?
That depends on what your objective is. If it’s trial, then a relatively low-value product sample is suitable so long as the barrier to participation is low. Pampers had success leveraging trial and building trust online with its Feel It To Believe campaign. The brand challenged moms across Hong Kong and Taiwan to try the new diaper for free and share an honest review of the product. And by sharing their reviews and ratings they were rewarded with an interactive ‘feel it’ adventure that created a fun bonding moment and a personalised keepsake starring their own baby.
The campaign created an entire social community of moms publicly demonstrating trust in the Premium Care product and in the Pampers brand. A record number of trial packs was given out. Even more powerful was the public product rating of 4.9 out of 5 stars, driving a huge increase in sales.
But if you want more engagement such as user generated content? Remember, your audience’s time and effort is not free, so a higher-value incentive is absolutely necessary.
A higher-value incentive allows for a higher barrier to entry. Asus' 100 Days of Zen campaign asked customers across the world to share artwork in the style of Instagram influencer and Asus endorser Robert Jahns. Normally, this would be a difficult ask for an audience as it requires time and technical/artistic know-how. But because the value of the incentive, a daily chance to win a ZenFone 2, was high enough, consumers submitted hundreds of submissions every single day of the competition. Participation was highest in markets where the ZenFone 2 had greater perceived value—the Philippines, India and Indonesia. The campaign yielded high quality content being shared on user social platforms; this is what an incentive-driven UGC campaign should look like.
Selecting the Incentive
Once you’ve established whether or not an incentive is a viable tactic, then you must select the right incentive. For some brands, the product itself is a smart, relatively low-cost approach as it creates an instant connection between the brand and the customer. The perceived value of the product will determine how much your audience will be willing to tolerate in terms of a barrier to entry. Lower-value items should require as few necessary steps as possible. Higher-value items should yield high quality content that your brand can leverage (ie earned media). Consumer electronics is a space with the sorts of high-value products that can yield very high quality user-generated content.
For some brands however, product giveaways do not reinforce exclusivity. This is particularly common among luxury brands that derive real value from such exclusivity. For these brands, incentives must be complimentary to the brand while acknowledging the willingness of their audience to participate in high involvement activities. For sport and aspirational luxury brands, this is a workable challenge. Instead of product, these brands can use attractive experiences to stimulate their target audiences. For an aspirational luxury brand, VIP tickets to a fashion show can enhance the brand pedigree, generate buzz and yield incredible content—if all the pieces are managed carefully.
For ultra-luxury brands such as exotic automakers or high-end fashion houses, the barrier to entry to any high-value incentive may always be too high, thus precluding the possibility of any sort of incentivised activity. Here, instead of incentives, luxury brands may consider the value of influencers who attract well defined audiences and lend the brand credibility.
At the end of the day, an incentive-based activity should always sit within a strong piece of content or customer-oriented experience. Even a really compelling incentive can be quickly forgotten if the surrounding content does not resonate with audience needs. In other words, start with a piece of content, then evaluate the viability of an incentive to amplify it. That is the formula needed for a strategically sound, efficient marketing activity—and makes sure you’re not giving away something for nothing.
Kevin Grubb is strategist at Razorfish Hong Kong