Consumers Have A Preference for Incentives and Rewards

 

The mission of marketing is to Engage, Understand and Activate consumers. Research traditionally has only been focused on the “Understand” phase of that process, but increasingly the shift to insights, in all it’s many forms, is creating a more holistic view where the lines between each are blurred, and instead are self-reinforcing. In that world, traditional market research must play a role in engaging and activating consumers, either as part of the research study, in support of the brand as a whole, or even as part of a panel building or community initiative.  That is why I remain interested and engaged in exploring incentive and reward programs; it’s not simply an operational issue any longer, but rather is an important part of the entire marketing life cycle.

With that in mind, my friends at Virtual Incentives have released the first round of data from a new research study on consumer perceptions and preferences surrounding incentives. The study, formally called “Incentive Research Paper” also explored how the incentive itself impacts brand perceptions, while studying influencers like gender, age, income levels and political affiliation. Alter Agents designed the study and provided analysis; Voxpopme provided video answers technology to video capture and analytics technology; and MindField Online supplied programming and sample for the research project.

Jonathan Price, CEO of Virtual Incentives, said, “The information we gathered for this study is vital in helping brands make informed decisions when it comes to incentivizing their target audiences. After all, we want the reward or incentive moment to truly resonate and create an engaging moment with the recipient – that means we need to be educated on what different consumer groups are really looking for when it comes to incentives.”

Data surrounding reward personalization revealed insights in to just how accustomed and willing consumers are in having personal information used in conjunction with incentive delivery:

• Receipt of personalized reward: Only two out of every five respondents have received a personalized incentive and, of those, just over half said it increased their consideration of the brand.
• Brand perception, general: Fifty-six percent said that receiving a personalized incentive would improve their consideration of the brand
• Brand perception, specific: While the vast majority indicated that use of personalization made a brand seem smart, unique and caring, a meaningful minority of 16 percent find it “creepy”
• Trust: Most respondents felt that a personalized incentive made them feel respected as a customer, while 1 in 4 feel it is a violation of their privacy.
• Type of personalization: Sixty-three percent prefer a reward based on purchase history, rather than the less popular reference to a purchase location (24 percent) or use of name (23 percent)

In addition to personalization factors, the study found that more education and higher incomes drive interest in incentives programs. In fact, the more educated and higher income level the consumer, the higher participation across the board – for all incentive types. More importantly, incentives programs lead to more expensive purchases, larger quantities, and shifts in retailer choice for these higher-status customers. For example, 20 percent more of those with an income over 50K would purchase a more expensive item based on receiving an incentive.

One thing that stood out was that, no matter the income or education level, one-third of respondents agreed on preferred reward: a virtual gift card that could be used anywhere they chose, such as Visa^® or MasterCard^®.

As data from the study is further analyzed, more trends will be released including political affiliation influence on reward preference, just in time for the elections. A paper summarizing the findings of the study will be available in early October.