How To Incentivize Something That’s Hard To Incentivize

File this one in the “When six students ask the same question in the same month, it’s probably a good idea to write a post about the answer” department.

So, let’s talk about incentivization, which my spell check tells me isn’t a word, but is a hell of a lot more elegant than “sweetening the pot so more people will buy the stuff you’re shilling”.

Some products are ridiculously easy to incentivize. Digital products tend to be the stock example. Giving a 25% price cut on a digital download is generally straightforward, because there’s nothing physical going out that’s going to be affected by a price cut. You set up your discount, you do a promotion, and it’s relatively easy money.

(Or so we tend to think. Sometimes that markup is what pays for customer support, or hosting costs, or that replacement computer, or payroll – it’s not as cut and dry as the consumer tends to think it is.)

However! We are not here to talk about easy. We’re here to talk about the hard stuff.

There are generally a few cases where people come to Dave and I saying “There’s nothing I can do to incentivize my product or service”:

  1. There’s no price margin (or, “Dude, I buy this thing for $50 and sell it for $55. If I discount there goes my tiny profit”).
  2. There’s no “thing” that can be thrown in (or, “I sell this one thing, and well, that’s the only thing I sell”).
  3. There’s a limited number of options (or, “Ok, I sell these three things, but if I incentivize by throwing in one of the other things, I won’t sell that thing to that customer later”).
  4. There’s no attempt (or, “I’ve been saying there’s nothing I can do here, and boy, do I sure believe that”).

Hmm. What do we do here?

Let’s think for a moment.

Incentivizing is both a creative exercise and a long game.

There’s a notion out there that running your ittybiz is supposed to be easy. That you just kind of show up and do you business-y thing and customers are supposed to be happy to hand over the money regardless of how much creative energy you bring to the table. And that the thing you sell should automatically be appealing enough to the consumer to buy with a smile and an “attaboy.”

We understand that notion, since it’s kind of plastered all over the internet. Many days we wish that were true. But since it’s not, let’s look at what you can do.

First, you can let go of your biases – specifically, the bias that this is a difficult problem to solve. It probably feels difficult, but everything feels difficult when you’re not used to it or you come into it automatically assuming it’s difficult or that you don’t have any good options anyway.  This is usually accompanied with “Yeah, it’s just …” or “You know what I mean?”

The way around that is to look at what other people are doing. In this case, there are plenty of people incentivizing things that are hard to incentivize all the time. Start looking for examples of those, and – miracle of miracles – your biases begin to dissolve and your creative brain starts seeing more options.

Second, you can take a deep breath and accept the fact that you may have to take on some downsides right now to get more important upsides in the future. This is the long game. This is where you might have to do some stuff that’s not as desirable right now, like take a loss, in order to get more customers in the door over time.

But that’s not “settling.” That’s commerce. Really, really profitable companies do this all the time.

So, let’s talk about incentivizing the hard stuff.

Dave was recently talking to a BIG LAUNCH student who sells vinyl records for $13 a pop. A lot of people would consider that a low-margin product that’s difficult to incentivize, so it’s a good example for this today.

Here are a few things our purveyor of fine vinyl could do to bump up sales:

1) Throw in something that is either free, or low enough cost to justify a sale. Maybe a digital freebie, like some behind-the-scenes interview with band members. Maybe some record-related accessory that costs $2 wholesale. You’ll lose some profit, but get someone on your buyer’s list, which you can promote to later.

2) Take a short-term loss and groom repeat customers. Maybe throw in some free shipping, or give a discount that reduces your profit margin. It might make you lose a little bit of money now, but if you’re taking good care of your customers you can make it up on the next few sales (which you wouldn’t have made if they didn’t make this initial purchase).

3) Add something that requires an investment of your time and not your money. Create something like a 24-page PDF on how to take care of your vinyl so it lasts forever, or something else that’s going to be compelling enough to tip a good percentage of buyers over the edge.

4) Create a loyalty program. This is a lot like the second option. If you have a “Buy 5 records and get the 6th one free” kind of program you will totally take a loss on the 6th record. But you’ll make profit on the other 5 and you’ll condition people to buying from you regularly.

5) Incentivize something other than the product itself. Amazon does this well with their “Prime” program. Pay a chunk of money now, and get free shipping moving forward for a year. If the program includes perks that are basically free to provide, it makes it even more appealing for the buyer.

6) Upsell and discount. If there’s any way to upsell an additional purchase at an incentivized rate, you’ll be able to move more product, even if you make less of a profit per unit. But you’re still profiting, and you’re still getting the buyer used to purchasing from you. Long game, baby.

If you’re one of those people who has only three things to sell, you may be nervous about throwing in a second thing. Ask yourself how likely your current customers are to buy the second thing right now. If the answer is “not very likely”, then you’re not risking anything.

Let’s look at some other examples outside of the vinyl industry.

7) Throw in some time. This applies less to the record seller and more to people who sell information products or services – throwing in 30 minutes on the phone with you, or a service that takes a short time to complete can help push a sale. This is especially good when a) that 30 minutes is worth it to you to move a higher-margin product, or b) you’re just starting out, and it’s not like you’ve got a line of consults stretching around the block, here.

8) Create something that’s unavailable elsewhere. You can have a digital version of a product that’s actually not for sale, and use it as an incentive. Just create something else that’s related to the first thing, and bundle it in during a particular promotion. This is otherwise known as a “bonus.” If you’re selling information or service, this is heartbreakingly easy to do.

9) Work on your copy. I left this until last because … well, because. Weak copy is often why so much incentivization is needed in the first place. It’s like taking pictures of your dirty car in poor lighting and putting them on Craigslist and wondering why your thing is so hard to sell.  You’d be amazed at the stories we hear from clients who have Dave redo their copy.  Sometimes it’s like night and day.

So, there are 9 things for you. Use your creative brain and put some fresh batteries in your “long game” hat, and you’ll be off to the races. You’ll come up with something doable.

“Things” aren’t hard to incentivize. Incentivization is hard when you’re not invested in doing the things that can make it easier.

Go do things to make it easier.

Naomi writes more things like this in The Letter. Get it for free today. (It also comes with free marketing courses. You can’t move for free here.)

About the author: Naomi Dunford started IttyBiz in 2006. In her free time, she likes to… ha! Free time. You’re adorable. Learn more about her here and catch up with her on Twitter or Facebook.