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We get it. Business can be tough. Crowded markets have made it increasingly challenging to differentiate yourself amongst competitors, but Runa may have the solution.
The challenge of global competition, crowded markets and commoditized products
Crowded markets and commoditization are issues faced by almost all sectors today including Telecommunications, Energy, Banking and Real Estate. Surviving in a crowded market can be tough, and competitors need to seek innovative ways to gain and retain customers. This can lead to the adoption of drastic measures in the fight to attract customers, such as price wars or a drop in quality to reduce operational costs.
It’s not just competitors placing pressure on companies. Economic globalization has enabled operations at an international scale, bringing new competitors to the market.
Today’s consumers are also more savvy than ever. They want convertibility, convenience and control, and they want everything to be individually tailored and instantaneously available.
Customer acquisition and the potential of Incentives
In a crowded market where consumers are spoilt for choice, differentiating yourself can be tough. Companies are faced with the challenge of keeping costs low to remain competitive, without compromising quality or service. When your marketing strategy is trying to appeal to a market of what is often millions of potential consumers, cost management becomes even more challenging. However, every challenge is an opportunity.
Competitors too often focus on a low price point to acquire new customers. While this tactic can be effective, lowering your price point can risk damaging the brand image or product quality in the eyes of your consumers. It also creates additional pressures to reduce operational costs in order to maintain an acceptable profit margin.
While incentives are often overlooked in the scramble to attract and retain customers, there’s significant potential to this strategy when executed well. For example, global telecommunications giant Vodafone gained a double digit lift in new customer acquisitions with a recent incentive campaign in the UK. The incentive saw customers rewarded with a 100 Pound gift card from their selected choice of retailer upon signing up.
The benefits of an incentives based approach for customer acquisition
Incentives are a valuable strategy in customer acquisition as it opens up the capability for companies to change the value of the product or service to the consumer without lowering the price point. Companies with an incentive based acquisition strategy at a low Cost-Per-Acquisition (CPA), will maximize the potential to attract and retain customers at a low cost.
Incentive based acquisition can:
- Drive in new customers at the bottom of the conversion funnel
- Differentiate your product against your competitors by enhancing the value to your target market
- Remove pressure to drop price points
Incentives can also enhance your customer’s experience and tie in with the customer journey. When building an incentive based strategy, companies should seek to create a positive experience that builds towards brand loyalty – long term and invaluable asset in a commoditized market.
Gift Cards as an incentive for New Customers
Popular incentive strategies adopted by companies include gift cards, discounts, loyalty programs and product samples or trial periods. While discounts, samples or trial periods can draw initial attention, these can be difficult to manage, costly and complex to roll out. For example, loyalty programs commonly used by supermarkets or airlines are difficult to manage and result in significant administrative overhead.
Gift cards are a low cost, low risk way to incentivize new customers and create customer acquisition. With gift cards companies can:
- Providing a meaningful incentive for new customers, including leveraging customers’ existing emotional connection to brands
- Easily manage and monitor campaign costs and effectiveness
- Gain additional insight and data on your customers’ preferences
How Runa can help you built incentivize campaigns
Runa are suppliers of gift cards, and our simple, online platform enables enterprise sized marketing teams to easily run flexible and innovative digital reward acquisition campaigns online. Powered by a single gift card API, Runa unlocks the power of digital incentives programmatically.
By using Runa’s API, Companies enjoy a range of advantages.
Choice
Give your customers what they actually want. Reward your customers with over 550 retailers’ across all industries including Food, Travel, Entertainment, Electronics and Department stores, all through Runa.
Huge CPA Reduction
A study found $45.7 billion in unredeemed gift card balances between 2005 to 2015, and this money remains with the gift card issuer. Gift cards issued through Runa ensures the money sits either with you, or redeemed with your customers.
Data is Power
Easily manage, track and reconcile your financial reports with real-time reporting capabilities, or view first hand your customers’ preferences in retailers. Data insight allows you to learn more about your customers and to continually improve future campaigns.
Not only can Runa help you acquire customers using digital rewards. Runa can also help retain and delight customers and build loyalty. Book a demo to see how.
Final thoughts
While each industry and market is unique, many of the challenges faced by companies in today’s market are the same. Crowded markets and commoditized products create challenging circumstances to remain competitive. For companies looking to attract and retain customers, digital incentives, and digital rewards in particular, may be the answer.
