Incentive Premiums by ETTSI

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Well here it is, 2012! Business is a little unpredictable right now that’s for sure. It’s an election year which history tells us will probably be a pretty good year but there is much uncertainty about the economic events unfolding around the world. Even the experts are holding back their predictions while showing some reserved optimism for the coming year.

So what are your plans for 2012? Are you going to sit on your hands and wait for the economic winds to start blowing your direction again or are you going to get out front with a renewed push to make the most of whatever comes your way regardless of what the economy does? When you think about it, this is a stupid question isn’t it! Of course you are going to be proactive so please consider these 4 Keys that I have used for years to design effective Sales Incentives Promos.

1. Pair the incentive with a premium product, not a loser. When the incentive becomes the most important reason for making a purchase, there is something wrong with the promotional idea in the first place. I’ve had customers that were sitting on inventory that just wouldn’t sell because there was no demand for it any longer. We looked at adding something to sweeten the deal but the truth was the customers still didn’t want the item. Most of the time, if you want to run a promo, selecting a more desirable item will be far more profitable while building long term customers through product satisfaction. If you just want to dump inventory, try EBay!

2. Keep the perceived value of the incentive below half the value of the product. As a rule of thumb, the perceived value of a sales incentive should be between 25% and 40% of the value of the merchandise or service. How do I know that? Well, over the last 20 years I’ve been creating Sales Incentive Programs using everything from travel certificates, to electronics products, to major retailer and restaurant rebates. I helped just about any type of company sell pretty much any kind of product or service. I have to admit, I’ve been tempted to lead with my best card many times but my experience has taught me that this is not how you win the game. You see, an incentive should be just that. Something that helps people to make a decision that they are leaning towards but for some reason they just can’t commit.

3. Don’t exaggerate the value of the incentive. One of the biggest problems with using incentives is the tendency of salespeople to overstate the value of the incentive thinking this will help them make a deal. If you have invested in a good incentive program, overstating the value will actually work in reverse. Smart customers will shy away because it doesn’t set well with them and the gullible ones will be pretty upset when they find out there were deceived.

4. Use an incentive that has real value. You know, if an incentive isn’t really worth anything, it won’t be much of an incentive. Every now and then I get a customer who is just plain cheap. They want something that looks great but they don’t want to pay anything for it. I can design incentives to meet pretty much any budget but, as the old saying goes, “You can't make a silk purse out of a sow’s ear”. A well designed incentive program will cost far less than the perceived value of the incentives. Still, if you do not want to invest in your incentive program, don’t be surprised if your customers don’t want to invest in your products.

Using these 4 Keys will cause your customers to take a second look, reconsider a negative purchase decision, or simply make a point to stop in when they had been planning to but just never found the time. You’ll pull sales forward, sell more, and sell at higher margins. And, most important, your customers will be happy and continue to come back to you again and again.

Tags: economy, incentives, optimism, planning, recession, sales incentives, travel certificates