Text messaging or SMS is one of the most ubiquitous forms of digital communication today. It’s a quick and easy way to stay in touch with friends, family, even customers. Unlike other digital touchpoints like social media, where passive scrolling is common, most people engage with and respond to most text messages they receive. This highly personalized form of communication is often at the center of phone usage.

Text messages have an open rate of 98% and a response rate of 45%—well above the 20% open and 6% response rates for email. Therefore, you can yield more engagement with your SMS marketing materials than any other outreach method. This is an invaluable solution to some major marketing challenges.

For instance, converting content views into customers is at the center of most strategies. It’s not enough to place your marketing materials on your potential customers’ screens; the real marker of success is getting them to sign up for your services.

Outreach methods with high engagement, like text messaging, are the key to overcoming this challenge. However, you must still provide a reason to sign up, which is why offering incentives has become one of the most successful strategic engagement tools.

The Power of Incentives

Companies seek customer loyalty because strong and long-lasting consumer relationships generate more value. However, to get more value from your customers, you must bring more value to them.

One of the most effective ways brands increase their value to customers is by offering special deals. Rewards play off the natural human desire to win prizes, and they give customers a reason to engage. Generally, these rewards are packaged in the form of incentives. Their role is to help companies generate spikes in sales or grow a loyal customer base (or both) by offering consistent rewards over an extended period of time.

The concept behind incentive programs is simple—reward to a customer for performing an action that’s beneficial to your business. The customer’s action should match the specific needs of your company. For example, if your aim is to make sales, you might consider a points-based reward for buying an item. Or, if your goal is to expand your email marketing list, you could offer product discounts for signing up.

There’s no single correct way to set up your incentives. In fact, these programs can take a variety of forms.

Getting Results

The right incentive can yield incredible marketing results. Customers who feel they’re receiving special deals from your brand are more likely to grow attached to your products and services. Over time, these incentives encourage customers to become increasingly loyal to your company. They are then more likely to refer their friends and family to your products and services.

Despite the increasingly digital world, word-of-mouth marketing is still one of the most effective ways to spread your message. Trusted third-party connections are seen as reliable sources of information for customers who often doubt the authenticity of branded content. In fact, according to Social Media Today, 60% of marketers say offering a referral program as an incentive to your existing loyal customers generates more leads.

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Incentive vs. Referral Marketing

Incentives have a variety of implementations, each with its own benefits and features. Although, many of these strategies yield the same results. Companies typically structure text messaging campaigns to expand a brand’s reach, increase sales, deepen customer loyalty, and generate a high return on investment (ROI). The implementation you choose will depend on the specific demographics and needs of your company and its customers.

To optimize your text messaging campaign, you must first understand the basic frameworks of the different rewards programs you could offer. And, to find the best way to meet your overall goals, it’s important to learn more about the specific use cases of these marketing strategies.

Two of the most closely related—and most impactful—strategies are incentive and referral marketing. Referral marketing is equally as powerful as offering incentives, yet each method has its own use. Here are the fundamental attributes of each and how you can best use them to structure your SMS marketing.

Incentive Marketing

Incentive marketing is outreach directly from a business to its customers. Simply put, through this type of campaign, you’re attempting to impact individuals who see your messaging. Ultimately, the content is designed to influence potential leads and convince them to perform a predetermined action that’s beneficial to your company.

When done through text messaging, incentive marketing is about scaling customer loyalty. You’re offering additional value directly to individuals in a personalized way. Under this framework, your marketing team is creating and distributing the messaging.

Referral Marketing

With referral marketing, the goal is to disseminate your branded messaging either through your customers or through third-party affiliate influencers. In other words, instead of directly reaching out to potential clients, you’re incentivizing current customers to spread your message for you.

Customer referrals have unlimited potential to spread. What’s more, the only cost to your company is the price of the reward you offer for a successful acquisition. Needless to say, the ROI on a successful referral marketing campaign is extremely high.

The primary form of referral marketing is to offer your customers a reward for suggesting your business to their personal connections. Customer-based referral marketing is incredibly effective because people hold the recommendations of their personal connections in high esteem. In fact, one study found 61% of people trust recommendations from friends and family members, while only 38% trust brands.

You can also offer an affiliate program. An affiliate marketing structure targets bloggers, social media influencers, or freelance marketers. These individuals aren’t generally customers, but they are incentivized to promote your business. You pay them a commission when your products or services are purchased through their specific affiliate link.

Affiliate marketing can reach a huge audience at an extremely low overhead cost to your company. Additionally, many people trust the word of the blogs and influencers they follow and see their recommendations as reliable.

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Why You Should Offer Incentives Through Text Messaging

Before you’re able to conduct your SMS marketing campaign, you need individuals to opt into your text messaging service. As you can probably imagine, most potential customers who have not yet developed a loyalty to your brand are unlikely to sign up for your SMS messaging without a reason. You’ll need to provide value to make opting in worthwhile to individuals who are new to your products or services.

Incentives are the best way to offer an immediate reward for signing up to your SMS marketing. To set this up, companies typically ask customers to text a predetermined keyword that automatically signs them up to messaging. In return, the customer will receive a coupon, free product, or special offer.

As you can see, offering incentives serves two purposes: it generates interest in your brand, and it’s a fundamental component of starting an SMS campaign.

Your incentives will help you grow a digital rolodex of customers that have opted in. Although, once you’ve sparked their interest, you must determine how best to keep it. Luckily, incentives can help maintain the appeal of your brand and even encourage your customers to further identify with your brand.

Here are four ways sales incentives can yield returns for brands that implement them:

1. It Helps You Attract New Customers

Offering incentives attracts new customers in two ways. First, you can expand your brand’s outreach by offering referral incentives to your existing customers or implementing an affiliate marketing program. And second, you’re providing an additional reason to choose your brand over all others.

You likely have existing competitors that pull some of your prospective customers away from you. Offering incentives benefits you by both capturing customers’ attention and convincing them you provide more value than your competition.

2. It Helps You Grow Your Text Messaging Marketing List

Customer data is invaluable to marketers. Yet despite the fact that practically everyone has an online footprint, it can still be difficult to reach them. A growing marketing list enables business expansion, meaning you have to find a way to contact your customers.

If you can acquire the numbers of interested individuals, you can run your SMS campaign. However, you’ll need to provide them with enough value that they’re willing to trade their contact information to receive it. Incentive structures that require customers to sign up to receive your text messaging can grow your marketing list.

3. It Helps Increase Loyalty and Conversions

Customers are loyal to brands that they believe value them. Therefore, using free or discounted products earned through rewards points could potentially convert more leads into long-term customers by garnering their enthusiasm toward your product.

What’s more, consistent purchasing over an extended time can encourage customers to identify with your products, branding, and company values. All these factors work together to increase your customer retention by strengthening your relationships.

4. It Helps You Increase Engagement

Referral marketing can increase your outreach through personal networks by asking your customers to recommend your services. Or, you might expand engagement through an affiliate program. However, engagement isn’t just about reach; it’s also about sales and social media sharing.

Point-based reward systems encourage sales, and social media contests can generate posts about your brand. For instance, you can agree to post the best customer-generated content on your main page. This way, incentives can increase engagement across the board.

Of course, these returns are contingent on the way you package and present your SMS incentives. The efficacy of your text messaging is partially a function of how well your team can strategize, organize, and follow best practices.

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Best Practices for Text Messaging Incentives

When it comes to marketing campaigns, preparation is the best insurance. Success will result from a strong strategy, clear goals, and skilled orchestration. These are the guiding principles, but there’s much more concrete, expert advice you should take into account before mapping out your text messaging campaign.

Promote Your Text Messaging Incentives

Promote your SMS incentives through as many channels as possible. After all, how will your customers know to opt-in if you don’t tell them? Messaging should include the features and details of their reward, as well as the actions they must take to receive it. For example, your number and the keywords your customers can use to opt-in should be clearly outlined. Then, post this content on your website and social media channels, and send it out to your email lists.

Keep Track of Your Costs

Manage the costs of your incentives. Free giveaways, discount codes, and sweepstakes all come at a cost to your company. At the end of the day, the campaign should be profitable. It’s important to balance the projected returns with the costs.

Manage Your Customer Data

Use data to personalize your messaging. One of the most popular methods of personalization is offering discounts or free products on a customer’s birthday. Specializing offers to meet individual customer needs can increase loyalty because it makes customers feel important.

Companies can also use customer data to optimize branding and offerings to match customer demographics on a larger scale. Determine what their values are, their lifestyles, and what about your brand interests them. Armed with knowledge, you’ll be able to boost your returns with targeted messaging.

Keep Your Customers in the Loop Through Text Messaging

Creating a timeline for your rewards can generate a sense of urgency. However, your customers might forget to sign up for incentives or use offers before they expire. This can be frustrating for customers who are truly invested in your brand. Avoid this by updating them via text, which gives them a last-minute chance to engage.

Keep Your Text Messaging Strategies Simple

Your incentive programs should be easy to understand. Many potential customers will be dissuaded by overly complicated terms and instructions.

On the other hand, loyalty programs that automatically track purchases and offer rewards when a customer reaches a certain number are probably familiar to many people and therefore easy to understand. Or, discounts and perks based on a tiered membership program will also be simple for your customers to engage with and use.

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10 Types of Incentives That Are Sure to Hook Customers

Picking the structure of your sales incentive program is a fundamental component of your overall campaign strategy. Your objectives should shape your incentive offerings. Choose a rewards program that encourages the actions you most need your customers to take. You’ll increase engagement with your text messaging by adding value for your customers, and you’ll subtly influence their brand loyalty.

Here are 10 common and effective incentive structures to consider for your company’s text messaging campaign:

1. Loyalty Programs

Companies aim to build lasting and loyal customer relationships over a long-term basis through loyalty programs. These are generally point-based systems that offer a prize for repeated purchases or engagement. These incentives are incredibly impactful to customers. In fact, Merkle’s 2022 Loyalty Barometer Report found 79% of consumers are more inclined to do business with a brand that has a loyalty program.

2. Referral Programs

Referral programs utilize the power of word-of-mouth marketing to expand your customer base. You’re already aware of the power of affiliate and referral programs. At a basic level, a company creates a win-win situation by rewarding customers that share their offerings with friends and family.

Consumers are skeptical of marketing materials because they’re used to dealing with an oversaturated advertisement landscape. However, most people trust the recommendations of their personal connections.

3. Text Messaging Sweepstakes

Sweepstakes are ideal for companies trying to generate new leads. Customers provide contact information in return for being submitted as a contestant for free products or services. This low-cost lead-generation technique can be an easy way to widely expand your outreach.

4. Discount Codes

Discounts are direct, simple, and effective. They don’t require customers to commit to more involved structures, yet the benefit they receive is valuable enough to convince them to sign up for your text messaging service. These factors make discount codes a great incentive. However, make sure you carefully calculate your costs and benefits to ensure this incentive will be profitable.

5. Free Gifts and Upgrades

Free perks can be a powerful motivator for your customers. Offering a free gift or free shipping on a purchase is a persuasive way to add additional value to a customer’s experience and potentially tip the scales for those who are unsure.

6. Text Messaging Sign-Up Bonuses

If your business model requires customers to sign up for your app, become a member, or otherwise open an account with you, sign-up bonuses are one of the most impactful incentive structures for you to offer.

Bonuses can be altered to fit a variety of formats. For instance, you can offer bonuses for actions like becoming a VIP member, referring a friend, or creating an initial account with your company. This incentive can be used to give potential customers an extra reason to commit to your brand.

7. Tiered Membership Structures

While some customers will be excited to jump in with your company, others will initially want to commit at a lower level. Offering several tiers of commitment enables customers to buy in at their comfort level, potentially reducing an individual’s decision paralysis.

Plus, a portion of your lower-level members will eventually take a later opportunity to move to a higher tier. Therefore, you’ll be able to use incentives to move members up through your structure, meaning you’ll be able to naturally scale your memberships.

8. Free Trial Month

If your company has a membership structure and your challenge is getting unsure customers to engage, consider a free trial month. This is a widely used incentive program, and it’s a highly motivating way to get potential customers to try your services. Customers will be able to test your value for themselves before they have to pay.

9. Downloadable Content

If your company has eBooks, newsletters, or video content behind a paywall, you could offer a free download in exchange for signing up for your text messaging. Leads that value your materials will happily give you their number for access to high-value content. Additionally, if your free materials effectively convey your value, then you’ll likely generate loyal customers.

10. Early Registration Incentives

If your marketing goal is to increase attendance at a digital or in-person event, then offer perks for early sign-ups. Potential attendees are likely already interested in your event, meaning they already know the value of your service. Your incentive should simply provide the final push they need to get registered.

Everything from discounts for early registration to gift cards or free services can be used to get attendees to commit to your event.

 

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Make Sure Your Text Messaging Incentives Reach Your Target Audience

Once you’ve prepared your text messaging sales incentives and are ready to run your campaign, the final step is to ensure you’re reaching out to the right numbers.

To this point, you’ve spent significant time planning, strategizing, and structuring your campaign. So, determining whether you’re sending your SMS messages to a text-enabled mobile number might seem like a minor detail. However, if you don’t take steps to filter out landlines that can’t receive your messages, you might waste a significant portion of your budget. This could be detrimental, because generating profits from your campaign relies on seeing returns.

Luckily, ensuring your texts are only sent to mobile numbers is simple, thanks to Landline Remover. Our service makes it easy for you to verify that your list of numbers are mobile-only and filter out landlines before you send your SMS incentives. This quick and easy step can protect your investment in your SMS campaign and ensure you see all your returns.

Don’t lose money on an easily avoidable hurdle. Contact Landline Remover today.