> You have a target market and sometimes it takes time for a product to spread through its ideal users — this is magical because word of mouth is free. And when it happens in an organic way, the intent is even higher. But if these ideal users encounter the product via an incentive program, you often “pull forward” these users, thus costing you money, when you would have gotten them anyway.
It’s worse than that. Some of these users you think you pick up via an incentive program were already loyal repeat customers!
As a silly example, there’s a local cafe that is part of a small chain that roasts its own (excellent!) coffee. I used to buy bags of coffee at their shop. But their website often has promotions, which they market to me heavily, which makes it cheaper to shop online and even cheaper if I wait for the right promotion.
And if I go to the cafe, I don’t cost them money in free shipping and I might buy a drink or a snack!
The moral: set up your pricing structure and promotions to incentivize the behavior you want from your customers.
It’s worse than that. Some of these users you think you pick up via an incentive program were already loyal repeat customers!
As a silly example, there’s a local cafe that is part of a small chain that roasts its own (excellent!) coffee. I used to buy bags of coffee at their shop. But their website often has promotions, which they market to me heavily, which makes it cheaper to shop online and even cheaper if I wait for the right promotion.
And if I go to the cafe, I don’t cost them money in free shipping and I might buy a drink or a snack!
The moral: set up your pricing structure and promotions to incentivize the behavior you want from your customers.