Promotions aren’t just for sales - here’s how Tier incentivize behavior

We’re all familiar with promotions being used to encourage purchases. That’s because sales are a business’ primary goal. But promotions can also be used to incentivize other, non-purchase related actions or behaviors. 

Behavior incentivizing promotions are much less common than purchase incentivizing promotions. But they do make an interesting case study for businesses running promotions of any kind.

Berlin-based e-mobility company, Tier is a great example of behavior-incentivizing promotions done well. As with all other e-mobility companies, Tier has to ensure its scooters are charged and ready to go when customers need them.

The conventional solution to this problem is paying rangers to collect low battery scooters every evening.

The rangers collect the scooters and take them away to charge overnight, then drop them in key locations ready for use the following day.

However, Tier now rewards its customers every time they replace dead scooter batteries. Customers can swap out old batteries for fully charged ones at dedicated charging stations situated in businesses around the city. In return, they receive free minutes on their account.

It helps to think of these promotions in terms of the action required, the incentive offered and the benefit to the business. Here’s a simple breakdown of the Tier battery swap promotion:

Action = Customers remove the old scooter battery and swap it for a new, fully charged one at a Tier charging station.

Incentive = In return, they get free minutes added to their account.

Benefit for business = Tier reduces overhead costs for the recharging process (paying rangers, wear and tear on scooters being loaded into a van for recharging, etc.).

Businesses that host these charging stations also benefit from increased footfall from Tier customers.

It's a win-win situation for the customer and the business. The customer gets free minutes on their account, and Tier gets a quicker, cheaper, more efficient process for recharging scooters.

“It’s not very costly for us. So we can actually deploy a charging network across the city.” - Lawrence Leuschner, CEO & co-founder of Tier Mobility

While behavior incentivizing promotions, like Tier’s battery swap promotion, are less common than purchase incentivizing promotions there are still a few common examples:

One of the most popular behavior incentivizing promotions is the email signup discount. Many businesses offer these discounts to customers when they join a mailing list.

Action = Customers provide their email address and agree to receive marketing emails from the business.

Incentive = In return, they get a discount code or coupon to use on their next shop.

Benefit for business = The business can expand its mailing list and increase reach for future outbound campaigns.

Referral programs are another promotion format that encourage customers to perform non-purchase related actions.

When existing customers (advocates) refer their friends, they receive a referral bonus. In many referral programs the friend also gets a bonus when they complete their first purchase.

Action = Existing customers refer their friends using their own referral code.

Incentive = In return, existing and new customers get a reward (usually some kind of discount).

Benefit for business = The business gets a cheap, effective way to bring in new customers.

Do you want to know what it takes to build a great referral program? Find out more in this blog post.

In many countries, businesses require customers to pay a deposit for recyclable bottles and cans. When they return these bottles and cans, they get their deposit back. This system is not fully promotional, as it’s often required by law.

However, it still encourages them to carry out a non-purchase related action, i.e. recycling reusable bottles.

Action = Customers returning their used bottles and cans for recycling.

Incentive = They recoup their deposit money.

Benefit = Bottles are recycled instead of being thrown away.

Any business can run its own behavior incentivizing promotions. All you need are actions customers can complete in return for an incentive.

Here are some hypothetical examples:

If you want to get started with a simple behavior incentivizing promotion, try mailing list sign up coupons. They’re easy to set up, and they’re one of the best ways to grow your mailing list quickly.

Determine the requirements for your non-purchase behavior incentivizing promotions using conditions.

There are a few different ways to do this for a mailing list signup coupon promotion. You’ll want to include the condition ‘Current customer is not a member of the audience:...’ to ensure customers can’t take advantage of the promotion repeatedly.

After you’ve set up your conditions, use effects to determine how your customers are rewarded for their actions. Using Talon.One’s Promotion Engine, you can select and combine a practically unlimited number of conditions and effects to build the ideal promotion for any situation.

You should especially consider more complex behavior incentivizing promotions if your business model is rental based, like Tier.

Rental based businesses are particularly well suited to this type of promotion. That’s because they have a vested interest in keeping their equipment in good condition.

They also often have customer accounts/profiles that can be linked to rewards. This makes it easier to attribute actions (i.e. battery swaps) to individual users, and it makes it easier to distribute rewards quickly.

Picking the right incentive for your promotion for your use case is key.

Cashback tends to work best for higher value items with lower purchase frequency.

For businesses or products with higher purchase frequency, discounts and coupons make more sense. They reward customers but cost less while also incentivizing continued purchases and brand loyalty.

Finally, rental businesses may be better served by promotions that add minutes or credit to customer accounts. This way they can reward customers with minimal additional expenditure or administrative investment.