Why do we need incentives? The majority of online shoppers have a pronounced price-performance sensitivity. On the one hand, the variety of offers increases daily and on the other hand, comparing products and offers in our digitalized world has become extremely easy. Incentives therefore offer a good opportunity to stand out from the convoluted range of offers.
Incentives: What is this?
Incentives in online marketing are cash or non-cash bonuses that are linked to an offer or product, thereby encouraging the user to make a purchase. In other words, an incentive is the icing on the cake of an offer that makes the offer particularly appealing to the customer.
A long road to the final buying decision
The human being is and remains in its basic features an emotional being. At least since Simon Sinek we have known that emotionally charged products sell better. Why? Because people generally do not make purchasing decisions rationally. However, this does not mean that the decision to buy must also be affective, i.e. a short-circuit act. Quite the opposite: especially in the online sector, the path to a decision is a longer one, all the more so when it comes to larger or special investments. But especially for the user making comparisons, a well-chosen incentive can work wonders. The final buying impulse can be influenced by emotional factors. An incentive that appeals to the individual interests of the user can be the trigger for the purchase, especially for products that are very similar.
An example – smartphones and tariffs: Let’s be honest, mobile phone and DSL tariffs are no emotional products. They are abundant and the differentiators are not too far apart. Once the user has been tagged and is aware of his or her interests, a personal incentive can be used to make tariffs much more attractive by addressing the user’s emotional side
The more individual the incentive, the more effective
Not everyone is convinced by the same incentives, so it is important to know which target groups are receptive to which incentives. As different as people’s interests are, as different goodies, vouchers and discounts must be in order to achieve optimal effects. However, it is also certain that we are not as individual as we often think. Put simply this means that targeting depends on pigeonhole thinking in the positive sense. And a little common sense can’t hurt either, as our article on audience targeting shows. Intelligent user incentives are one of four components of successful online advertising:
Coupons as an incentive for everyone?
Usually, a coupon has the advantage of allowing you to choose from a wide range of products. The larger the range, the better. However, it is even better to know which shop is in the good books of which user. And that’ s how you build the bridge to user-specific targeting. Because yes, sometimes clichés are true and helpful, it is not for nothing that they could develop into them.
“A simple example would be the target group of men and women: if you want to reach female users, cosmetic goodies or shop vouchers are the obvious choice. For men, on the other hand, technical products such as sound boxes or tablets are very popular.”
Yvonne Hansen, Head of Business Development | advanced store
Cashback: Incentives with a long-term effect
Incentives that do not expire after a one-off use, as described above, are the most convincing. Best known are so-called bonus programs, in which members collect points or the like. Big players in this industry are companies such as Payback or Miles & More. However, cashback portals have now also reached the German average consumer and are enjoying growing popularity.
“The advantage of cashback is obvious: instead of points that the buyer can invest in a limited selection of premiums, he or she will get money back. And thus the freedom to decide for him- or herself how to spend the money.”
Christoph Terwiel, Head of Business Development | advanced audience
From gatherer back to hunter, that is the maxim of cashback systems. Of course, dealers, buyers and cashback providers all get their slice of the cake. This is a concept that advanced store is firmly convinced of. That’s why we took over the cashback portal mycashbacks with advanced audience in December 2018.
Cashback further conceived as remarketing extension and element of control
With a pinch of imagination, the use of the cashback principle can easily be extended to other performance advertising solutions. Once you’ve realized the importance of incentives for the success of display campaigns, it’s easier to cross the boundaries. How? For example, by consciously using Cashback as a follow-up incentive within a retargeting campaign. It can also be used as a special incentive for a certain period of time to consciously control conversions. However, what is true is that cashback is an idea with a future, since everyone benefits:
“The idea is simple: By connecting people with the best brands in the world, we provide them with the opportunity to get money back on stuff they buy every day. The cashback, in turn, will be provided by the retailer himself. It’s part of our commission as a cashback provider that we pass on to the online shopper. In exchange, our trading partners attract new customers who will make long-term purchases from them.”
Marc Majewski, CEO
One thing is for sure: The user is and remains the decision maker in terms of product success. As an online shopper, he also has the opportunity to do extensive research and has therefore become more selective. This does not mean, however, that the purchase decision cannot be influenced positively. After all, this is what good online marketing is for. Target group oriented incentives are a step in the right direction in order to offer the user the unique and convincing offers he confidently demands. In addition to coupons, cashback offers in particular are an interesting way of creating long-term incentives from which traders and customers can profit effortlessly.