Incentivizing customers is a tried and true way of getting people to do something that they otherwise might not do. To persuade a specific action, you give an incentive. It’s that simple. And companies in a diverse range of industries have been doing this for years.
It’s that simple. And companies in a diverse range of industries have been doing this for years. Buy One, Get One Free, as the classic saying goes! But now this approach has caught on in the wireless industry, and it is shaping the future of how wireless companies market to and win over consumers.
T-Mobile Leads the Pack
If there’s one wireless carrier that seems to truly appreciate and understand incentive marketing, it is T-Mobile. To promote T-Mobile smartphones, company CEO John Legere has implemented a slew of incentive marketing plans over the last several years. These include paying customers’ early termination fees for switching to T-Mobile, offering free cellphones, and now T-Mobile Tuesdays. Customers with a T-Mobile plan can sign in to T-Mobile’s mobile app and receive free gifts every Tuesday, including free pizzas from Domino’s, movies from Vudu, and treats from Wendy’s. But that’s not all T-Mobile is offering. The company is even giving away one share of T-Mobile stock to every individual who signs up for the promotion. Sure, as of this writing one share is worth only about $40, but that number could go up.
Leveraging a Proven Model
Incentive marketing is hardly new (loyalty programs, rewards programs, and referral programs are all various types of incentive marketing campaigns). So the fact that companies like T-Mobile are leveraging incentive marketing campaigns to revitalize the wireless industry should come as no surprise. Here are several companies that are having tremendous success using just this approach.
Poshly is a start-up that makes money by giving away free stuff. However, as you might expect, there’s a bit more to it than that. Poshly works with partners to give away free items, such as clothing and gift cards. It works closely with retailers in the fashion industry to help drive brand awareness for its clients. Poshly users take 10-question quizzes, answering basic questions about buyer demographics, in order to earn rewards. Poshly’s partners, in turn, gain invaluable marketing data to help guide their campaigns.
The most efficient way to grow a business is through referrals, but unfortunately, it isn’t always that easy. So how did Drobox go from 100,000 users to 4,000,000 users in just 15 months? By incentivizing its customers. With the company’s referral program, users could earn 16GB of free storage space simply by referring Dropbox to a friend or family member. All that person had to do was sign up for an account (which is free for the first tier).
The idea of a referral program is incredibly attractive, because it allows a company (hypothetically, at least) to pay a small upfront fee in order to win a long-term customer. In Dropbox’s case, that small upfront fee is the equivalent of 16GB of storage space. In Uber’s case, it’s the price of a cab fare, more or less. That’s a pretty good deal and it’s working to an extent – Uber’s year-over-year growth is up significantly. However, that growth has come at a cost. Referral programs are designed to help mitigate this expense.
Credit Cards (Nearly all of them!)
The odds are good that you have at least one credit card that rewards you for spending money. Perhaps you earn travel miles. Or perhaps you earn points that can be redeemed for retail goods, like watches, cameras, and gift cards. The idea is simple and effective, which is why so many credit cards offer it. “Don’t like using your credit card to make purchases? But what if we give you free gasoline?” This, in a nutshell, is incentive marketing.
Incentive marketing is a good thing. After all, the consumer actually get something tangible out of it. Traditional marketing offers nothing more than promises. This car will make your life more exciting. These clothes will make you cooler. This beer will make you more attractive. Incentive marketing is different. It says, “Buy X and we will give you Y, free of charge.” That’s not a bad deal!