October 2000   

What incentives turn today's online browser from a "just looking, thanks" person into an "I'll take this one and this one" customer?

Wide Variety Available

The types of buying incentives offered to shoppers are almost as numerous as the number of Web sites. These incentives include:

• Coupons
• Discounts
• Free gifts
• Free shipping
• Frequent flyer miles
• Points
• Rebates
• Rewards
• Sweepstakes

Incentives Crafted Just for You

Often shoppers receive an invitation to sign up for an incentives program. As part of the sign-up, consumers respond to a detailed questionnaire about their preferences and interests. This information enables merchants to target them with special offers that match their interests. This honed approach to the target is seen as more likely to succeed than a scattershot approach.

At the same time, merchants receive aggregate totals on shopper demographics, usage activity, and profiles of customer interests.

Pointed in the Right Direction

Some sites, such as MyPoints and MyPoints Cybergold offer points to customers. Shoppers who sign up for MyPoints Cybergold receive BonusMail in their email inboxes. The messages contain information about shopping opportunities and special offers. The opportunities offered to customers are based on the profiles created when they signed up for the service. Shoppers receive a certain number of points when they click through the BonusMail message to visit a site, and more points if they make a purchase. They also can earn points by dining at certain restaurants, buying certain items, and responding to polls.

Customers must have a minimum of 750 points before they are allowed to spend them. MyPoints Cybergold allows shoppers to earn cash that can be transferred into their checking accounts or Visa accounts. A Cybergold account must have a minimum balance before it can be transferred into another account, and there is a $.25 transfer fee. Customers also can receive prepaid phone cards, gift certificates, and travel awards.

The Check is in the Mail

Ebates.com is a shopping portal that offers a cash rebate for every purchase. According to the company's membership information, Ebates.com has more than 400 merchant partners who pay Ebates sales commissions for directing shoppers to their sites. Ebates.com uses this commission to give shoppers rebates. Ebates.com derives its revenue from advertising, rather than commissions from the merchant partners.

CyberRebate.com offers mail-in rebates on the products it sells. Frequently, the items are free or significantly reduced after the rebate is factored into the cost. The site also does not charge a shipping fee.

Coupon Clippers?

The distribution channel E-centives, Inc., provides digital coupons and online offers tailored to the shopper's profile. Some coupons can be printed and used offline.

Some grocery stores offer weekly email messages detailing special offers. Shoppers can print the offers that interest them and take the printout to the store for redemption.

You Could Be a Big Winner

Some sites use sweepstakes to attract buyers. McAfee.com, for example, recently offered a chance to win a Porsche Boxster to new subscribers to its online clinic for virus protection.

This Is Your Reward

Nova International's Buyer's Reward program offers incentives such as two free hotel room nights for shoppers who sign up for a 30-day trial membership in Nova's Buyers' Reward Program. Nova also offers free software, discounts on rental cars, savings on movie tickets, admissions to theme parks and other family attractions, and more.

Into the Wild, Blue Yonder

On selected sites, ClickRewards awards ClickMiles -- often a large number of ClickMiles for opening a new account, with smaller numbers of ClickMiles awarded depending on the amount of a purchase, excluding taxes and shipping charges. ClickMiles can be redeemed for hotel stays and frequent flyer miles on several major airlines. Non-flyers can redeem their ClickRewards for other items such as gift certificates and brand-name merchandise. Donations to certain charities also earn ClickMiles.

It is possible that your accrued ClickMiles may be taxed. ClickMiles also have expiration dates, and an inactive account can be closed.

Absolutely Free

"Free" probably is one of the most attention-snaring words in the English language, and some Web sites use it to offer a gift to their customers, usually to first-time buyers. But merely offering a free item probably is not enough to attract and keep a shopper. The item must have value to the customer.

A free newsletter, for example, can continually remind a shopper about a business, and it can include additional special offers. Free samples also are a tried-and-true method of introducing a product to customers.

Price Reduction

Some sites offer a percentage off all or selected products, while other e-tailers offer free shipping and handling to attract customers.

The wide variety of incentive programs has advantages and disadvantages for both customers and merchants.

Buyer Beware

Before signing up for any type of incentive program, be sure to read member agreements carefully. Note whether the information provided to others is aggregate material, or whether individualized information about you is shared with others. You may be authorizing the company to share your personal information with other marketing groups. You'll also want to read the company's privacy policy, which, in many cases, is posted on the Web site.

Be aware that a program can sometimes be terminated and that as a result, you may have only a short time to redeem the rewards before your points are lost. Some programs charge a processing fee to an inactive account, or reserve the right to change their redemption policy.

Sometimes sites require a large minimum purchase in order for a shopper to receive the incentive offered. Getting $20 off an $80 order isn't much of a bargain if a customer doesn't want to buy that much merchandise.

Seller Beware

Some shoppers have several email addresses, and this practice has caused many sites to prohibit one person from using more than one address to take advantage of special offers.

Another concern is that merchants who offer attractive deals to first-time shoppers will attract buyers for that offer only. The best offer is one that attracts new customers who become repeat customers.

Win-Win or Lose-Lose

Careful shoppers can find online incentives advantageous.

E-tailers also can benefit by such targeted promotions.

The best incentives and promotions will benefit both merchants and customers, making additional sales likely.