Marketing incentives drive specific actions: a first purchase, a signup, a referral. But most businesses pick incentives based on what’s popular, not what matches their goal. A discount code works differently than a free sample, and a referral reward works differently than a loyalty perk. This guide breaks down five types of marketing incentives by intent, so you can pick the right one for what you’re actually trying to accomplish.
What are marketing incentives?
Marketing incentives are rewards given by a business to current and potential customers to promote conversions.
These conversions could include initial purchasing, repeat purchasing, website visits, email signups, referrals, and more.Â
Incentives for brand awareness
These incentives draw attention to your brand, particularly from people who haven’t bought from your company yet. People need to know who you are, what you offer, and what you stand for before they intentionally choose to make a purchase from you.
Brand awareness incentives aren’t rewarded in return for anything, since their intent is simply to help get the word out about you. Give these rewards freely and strategically, and you’ll reap your own rewards!
Best incentives for brand awareness
- Free samples: If your audience tries and loves what you have to offer in a smaller quantity, they’re more likely to come back and pay for a full-size product.
- Free products for a very limited time: Think free food offers on special days, like Chick-Fil-A’s Cow Appreciation Day.
- Sweepstakes and contests, especially ones that encourage social media and word-of-mouth sharing
- Branded swag: Clothing items, bags, water bottles, or any other items printed with your brand name that your audience would enjoy.
Incentives for lead generation
People have found out about your brand, but how do you turn this attention into leads? Certain incentives can help motivate people to give their contact information, so you can nurture them towards making a purchase.
Best incentives for lead generation
- Informational incentives: ebooks, whitepapers, or other documents that share valuable information on a topic related to your brand (These documents will also encourage your leads to trust you more.)
- Coupons and discounts in exchange for an email address
- Free trials of your new product
- Sweepstakes and contests that require a number or email address
Incentives for purchases and repeat purchases
Purchase incentives give on-the-fence leads a sweetened deal, so they’re more likely to buy from you. They either reduce the cost of a purchase or add value to a purchase through a bonus.
Best incentives for motivating purchases
- Buy one, get one free offers
- Free bonus item with purchase
- Free upgrade with purchase
- Discounts, coupons, or sales
- Sweepstakes where each purchase gains a customer an entry
Create unique discount codes with our coupon code generator >
Incentives for customer retention
Gaining new customers is great, but retaining your existing customers is even more important. Repeat purchases aren’t offset by customer acquisition costs, and the more purchases a customer makes, the higher their lifetime value becomes.
Retention incentives give customers another reason to stick around. This helps you increase your retention rate and decrease your churn. The best retention incentives are usually part of an ongoing loyalty program. Be sure to read our article on loyalty program incentives for more details!
Best incentives for encouraging customer retention
- Discounts
- Store credits
- Loyalty points, where individuals can redeem points for select rewards
- Feature upgrades and plan upgrades
- Sweepstakes and contests
Use our gift card code generator to create unique store credit vouchers >
 Incentives for referrals
Referrals are powerful because people trust word of mouth from their peers far more than they trust messages that come directly from your business. When someone refers a friend to you, that friend is more likely to become a customer and to remain loyal over time.
But here’s where most businesses get referral incentives wrong: they focus entirely on what the referrer earns. The reward becomes transactional, and the referrer feels like they’re selling out a friend rather than doing them a favor. In fact, 74% of referral programs use one-sided rewards that only pay the referrer, despite two-sided rewards consistently performing better.
The better approach is to frame the referral as a gift the referrer can give their friend. When the friend gets something valuable (a discount on their first purchase, a free month, an upgrade), the referrer feels good about sharing rather than awkward about it. It shifts the whole dynamic from “I’m getting paid to pitch you” to “I have something you’d actually want.”
Double-sided incentives, where both the referrer and the friend are rewarded, lean into this naturally. The referrer has a genuine offer to extend, and the friend has a reason to act on it.
The best referral incentives are part of a referral program. Check out our article dedicated to referral program incentives for best practices when using referral rewards.
Best incentives for encouraging customer referrals
- Discounts
- Store credits
- Free products
- Branded swag
- Cash payments
Marketing incentive best practices
Whichever intent you are creating incentives for, follow these best practices:
- Keep incentive guidelines simple: An incentive works best when customers know exactly how to earn it. Make sure incentives feel achievable. This helps prevent incentive breakage and promotes trust.
- Remind your customers to use any incentives that expire: Studies show 43% of rewards expire before they are redeemed.
- Look beyond monetary rewards: Non-monetary rewards are just as (if not more) effective.
- Start an incentive marketing campaign: A few popular types are referral programs or loyalty programs.
- Tie incentives back to your brand whenever possible: This gives your leads and customers a reason to keep your brand top-of-mind. Think discounts, store credits, free products, upgrades, and anything else with a direct connection to your products or services.
Marketing incentive examples that work
These businesses have had particular success with adding incentives to their marketing efforts. Why were they so successful, and what can you learn from them? Let’s break them down.
7-Eleven Free Slurpee Day
Avid fans of 7-Eleven know that the chain gives out free Slurpees every July 11th, for 7-11 Day, and make sure all their friends know too. Loyal customers who are part of the chain’s membership program and visit 7-Eleven on Free Slurpee Day get a digital coupon for a second free Slurpee, redeemable for 30 days after the promo. And people who don’t usually go to 7-Eleven see loyal fans posting on social media, and get excited about the free drink.
This multi-pronged marketing incentive achieves several intent goals at once: brand awareness, retention, and referral. But it still keeps things simple, with a core reward: free Slurpees.
7-Eleven hopes to hook new customers on their Slurpees with this effective incentive, and give loyal returning customers a reason to come back. Based on how well the promotion’s known, it’s been a success: 7-Eleven gave out an estimated 9 million free Slurpees during their 2019 promotion.
Tim Hortons’ Roll Up the Rim
Tim Hortons, Canadian coffee and donut staple, uses their annual Roll Up the Rim campaign to incentivize purchases. Whenever customers buy a medium, large, or extra large hot beverage, they get a chance to “roll up the rim” and possibly win prizes ranging from coffee for a year and $5,000 to smaller rewards like free coffee and donuts. The contest has become a mainstay in Canada, just like the chain itself.
T-Mobile Tuesdays
T-Mobile knows happy customers are more likely to stick around, so they give all customers surprise perks every Tuesday through their app. These perks include free offers and deals from other brands, branded swag, and chances to win bigger prizes like gift cards, tech, and vacations. All just for being a T-Mobile customer.
Chipotle Rewards
Chipotle incentivizes repeat customers with this well-designed loyalty program. Customers earn points on every purchase (10 points per dollar), and can redeem 1250 points for entrees of their choice. Plus, they also get free gifts on their birthday.
The brand shakes things up with gamified elements, such as extra point days and surprise challenges, while still keeping their loyalty program easy to understand and rewards achievable.
Bombas Referral Program
We can’t end our list of top marketing incentives without highlighting a stellar referral program! Sock brand Bombas’ referral program lets customers send their friends a coupon for 25% off of their first Bombas purchase.
And when their friends make that first purchase, customers get rewarded with a $20 gift card of their own, to spend on more Bombas. This generous, two-pronged reward effectively incentivizes customers to share with friends they think would be interested in Bombas.
Wrap-up
The common thread across every incentive type: match the reward to the action you want. Discounts drive purchases, free samples build awareness, and referral rewards work best when the friend gets something too. Pick your goal first, then pick the incentive that fits.
If you’re looking for more ideas, check out our guide to referral rewards or learn more about starting a customer referral program.
