Rewards vs discounts: which is better?
Incent is a revolutionary new kind of loyalty currency. Most reward schemes are just IOU points that stores issue at will and have to redeem when the customer decides to cash them in. That brings all kinds of problems, since if the company issues too many points they may end up having to pay out more in goods and services than they can afford. Counter-intuitively, too much loyalty can be a bad thing.
Incent operates in a completely different way. Instead of being issued as credits, tokens are bought off the open market whenever the customer pays for an item. This effectively makes Incent a form of parallel money: a smart reward currency that can be saved, spent, given away or even sold.
One of the questions people sometimes ask about Incent is:
‘If you’re giving customers something like cashback, why not just give them a discount in the first place?’
There are several answers to that question. The first is that we believe crypto rewards are a very much better form of money than dollars, and as more and more people use Incent we hope to see people rewarded for holding onto them. There’s (rightly) a huge amount of interest around blockchain and cryptocurrencies, and Incent makes it extremely easy to get hold of crypto – it’s issued straight to your wallet whenever you shop.
But quite aside from that, there’s some new research that suggests customers respond better to rewards than they do to discounts. Rewards are better at both incentivising customers to return and for creating a clearer and better brand identity for the company.
The type of purchase or consumer also makes a difference. Contrary to what you might expect, rewards-based promotions are even more effective than discount-based promotions when it comes to frequent or utilitarian shoppers. In other words, for those consumers going about their day-to-day shopping activity (exactly the demographic Incent seeks to tap into), rewards offer a more powerful incentive to return to the same stores and give a stronger impression of the quality of the business.
The catch with all this is, that for all that this research might be correct, the bottom line for shoppers and stores is mediocre. Few loyalty schemes provide the consumer with true monetary value.
That’s where we believe Incent really comes into its own. By giving mass-market consumers rewards that are truly valuable, we think we can drive greater levels of consumer loyalty and repeat custom than most businesses could ever hope for with a conventional rewards programme.
Join Incent’s Waitlist today to start getting rewarded wherever you spend. Find out more at Incent.com