Study: Consumers Want More Online Incentives

A new industry study says that more than half of all online consumers would
buy more online if reward points or incentives were offered at e-commerce
sites.

The survey of 1,905 online consumers by NFO Interactive found that nearly 53 percent of
online consumers said they would gladly increase the amount they spent in
transactions at a specific retail Web site if loyalty points or incentives
were offered.

Moreover, 47 percent of the online consumers said they would return regularly to a
specific e-commerce or retail Web site if they knew they would receive reward
points or other
loyalty incentives. Only 15 percent of online consumers indicated rewards programs
have no influence on their purchasing decisions.

“Web site effectiveness was once measured by the number of hits. Today, it’s
measured by purchases. Online consumers have the ‘Gimme Factor.’ That is,
‘I’m here at your Web site. Now make it worth my while to buy something’,”
said Lee Smith, vice president at NFO Interactive.

“Rewards and incentive programs, when used strategically online, are among
the most powerful tools marketers can use today to drive customer retention
and develop customer loyalty. And they are particularly effective with
consumers under 35 years of age.”

NFO Interactive also said the survey shows that more than half of the
respondents would
gladly provide personal information in return for a reward or incentive.

Steering away from sweepstakes, consumers prefer the following types of
rewards:

  • Products or gifts: 28%
  • Airline miles: 18%
  • Gift Certificates to Retailers: 16%
  • Electronic Cash: 14%

“Just as off-line retailers are looking to create life-long, profitable
customers, online retailers desire the same type of relationship. Rewards and
incentive programs are proving to be a successful tool to cultivate customer
loyalty on the Web,” Smith said.

Participants for the NFO Interactive study were acquired from the
NFO//net.source, a representative online consumer panel consisting of more
than 450,000 individuals. Among online shoppers the data collected possesses
a statistical accuracy of +/- 2.3 percent, the company said..

NFO Interactive is a unit of NFO Worldwide Inc., a provider of
research-based
marketing information. With almost 13,000 full- and part-time employees
operating in 32 countries, NFO services include advice on market evaluation,
product development, brand management, customer satisfaction, pricing,
distribution, and advertising effectiveness.

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