This is what American President Donald Trump allegedly said to his then FBI director James Comey. As the President, Trump is allowed to ask for loyalty. He is the highest authority of the nation and the sovereignty and security of the nation depend on the loyalty that he receives from his task force.

Now imagine a different scenario.

A generic pizza chain called ThePizzaChain asks all its customer to be loyal to them and not have pizzas from other places. They have outlets all over the country which are easily accessible. Hence their request should be easy to adhere to. But this does not happen.

In the current market scenario Brand Loyalty is a fickle thing. Consumers have a plethora of choices, each one better than the next. There are multiple marketing techniques that entice a consumer stick to one brand or try a new one. Among them is Incentive based Marketing. A quick search on Google for Incentive Marketing would show pages and pages of websites dedicated to curating Incentive strategies for companies along with extensive research articles on incentive related statistics. This is not without good cause.

Incentives are things that motivate an individual to do a particular task or act in a particular way. Dr. Jonathon Britt from McGill presented a paper on "Investigating the Pleasure Centers of the Brain: How reward Signals Are Transmitted" at the 2014 Canadian Neuroscience Meeting. He said getting rewards leads to an increase in the dopamine levels. Reward signals from the brain also form neural networks that are the reason for the habitual behavior. The success of Incentive marketing is due to this behavior of the human brain. The rewards that companies provide rewires the consumer brain to make them come back again.

According to research done by AllianceData, approximately 76% of millennials and the Gen X population would try a brand for one or two times before stopping their use completely. Also, 55% of the early millennials said they prefer purchasing from the same brand that they like.53% of newer millennials and 51% of Gen Z agree with it. Hence, it becomes a matter of prime importance for companies to attract and retain them.

Providing incentives incurs a large cost to the company. Hence, it becomes vital for companies to choose the right kind of incentive. They should also be provided at the correct stage of the buying process which would give them the final push into making the final buy. The incentive needs to be related to the main product in addition to being appealing to the consumer. Free Trials, Extra discounts, discounted or free after sale services, offering flexible payments options are some of the incentives most popularly used.

An Incentive Marketing example close to home would be the market capturing war between the telecom giants of India. According to IBEF, India has the second largest telecommunication market in the world. The number of smartphone users is expected to reach 180 million by 2019. The two telecom giants Vodafone-Idea and Airtel are at loggerheads in a bid to capture the lions share of the market.

Since the price cannot be reduced beyond a limit, the companies have to look at other innovative ways to entice the customers. If you ever wanted to cancel your sim card, but then after visiting the store decided to put off the decision for a few more months then you have experienced the lure of Incentive Marketing. The staff is trained to recognize high churn customers and then special offers are sent to those customers. In order to encourage continuous loyalty, Airtel would offer 10Gb data per month free for three months. All a customer had to do was click on the claim the offer. After the offer expired, they would relaunch the same offer after a few months. Postpaid connections of Airtel who have subscribed to Infinity plans have received one-year Amazon Prime subscription. A 51rupee gift card was also provided to be redeemed on Amazon. Netflix subscription of 3 months was given for free to customers who are on higher cost plans. Vodafone-Idea also has similar incentives for their customers.

These companies have the details of their customers, their data usage habits and extensive research data on the needs of the customer. The Marketers analyze these points and pinpoint on the exact product or service that would attract the customer and reduce the churn rate.

Another well-known example of Incentive Marketing is McDonalds Happy Meal. Each meal would contain articles of children's liking. They would be small toys or trinkets related to a new movie or a famous cartoon show. They could be collected to form an entire set. This was a brilliant strategy that McDonald's implemented. The picked on the behavior of children to be attracted to toys and games. However various lawsuits have been filed for banning of Happy Meals as they are linked to childhood obesity. According to recent news on Fox Business, McDonald's has removed Happy Meals from their value menu.

In the implementation of incentives, care needs to be taken that there is no adverse impact on the consumers. It should be carefully curated to improve the company profits and increase the acquisition of new customers.



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