campaign components: messaging includes offer and incentive

How to Build Better Campaigns: Offer vs Incentive

Understanding the key components of a campaign will give you clarity for how to build, iterate, and measure campaign effectiveness. Here we will dig into two components of the campaign message that are not always well understood or executed. We’re focusing on the campaign offer vs incentive.

First, some campaign definitions:

Campaign Offer

This is the action you want your prospect to take. It might be signing up for a free trial, completing a purchase, triggering a download, choosing a plan upgrade, agreeing to share data (like adding their address or a second payment method), inviting a friend, or scheduling a meeting with your sales team. If there’s an action you want your prospect or customer to take, then that is your offer.

Campaign Incentive

This is how you incentivize your prospect or customer to take the action. Often it is a coupon, a discount, or the unlocking of credits, features, or services. Other times, it can be simply focusing on a benefit of the offer; that is, some value that the prospect or customer will get because they took you up on your offer.

Campaign CTA

Isn’t that the CTA? Not exactly. The Call to Action (CTA) is a short prompt to entice the initial response, usually a click on a button. It can be, but doesn’t have to be, directly related to either the incentive or the offer.

Examples of Offer vs Incentive

Example 1: Consumer E-commerce Retail

Our first example is a summer clearance sale. The merchant is motivated to move summer inventory before the end of the season. Notice how we can combine any offer with any incentive. So at first glance we have nine combinations we can use either for multivariate testing, or for personalization (based on previous user behavior.) With stacking, we could gain even more combinations; for example, offering multiple incentives to VIP customers, or for those ordering multiple Offer bundles.

OFFERINCENTIVE
Beach Bundle: Swimwear, slides, and hat$30% off a three-item bundle
Poolside Bundle: Swimwear, towel, and sunglassesFree Expedited shipping
Town bundle: Hat, slides, and sunglassesFree tote bag with sunblock and lip balm

Example 2: PLG Engagement

Our second example is a B2B web app Free Trial. The goal is to expand from a single user to visibility for their team, which increases retention and opens up additional use cases. So we want our user to invite teammates. Just like in the first example, we have offers and incentives we can mix and match, so that we can personalize, or run multivariate testing. Two of these incentives enhance the Free Trial, while one of them offers a discount on a subscription. It’s tempting to go straight for the revenue, but your user may not be ready to purchase, which is why getting their team involved now is a good option.

OFFERINCENTIVE
Invite your team30-day Free Trial extension
Subscribe your team to reportsUnlock Premium Features
Integrate with Slack20% off annual subscription

Psychology of a Decision

It should be clear in these examples that an offer and an incentive represent the two sides of a transaction. If humans were purely rational creatures, sharing the offer and the incentive would be enough to trigger action. But it’s not that simple. Neuroscientists tell us that 95% of our decisions are made subconsciously. We make decisions based on instinct and emotion, and justify them later with logic.

That means that an offer and an incentive on their own are not enough to launch a successful campaign. They must be wrapped in a message and triggered with a CTA. But that’s another post for another day.


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