This is your ultimate guide to incentive marketing, designed to show you how to use rewards strategically at every stage of the funnel to attract, convert and retain customers.

Incentives are everywhere in marketing, but most of them don’t work.

Whether it’s a 10% discount code, a tacked-on gift card, or a loyalty scheme that only occasionally pays off, too many businesses default to the same tired tactics in the hope that they’ll magically boost performance. But here’s the hard truth: generic incentives don’t move the needle. If anything, they can damage your brand, dilute your offering, and waste precious budget.

The irony? Marketing incentives can be incredibly effective when used with intention.

Done well, rewards and advertising incentives can build brand loyalty, increase customer lifetime value, reduce churn, and even convert disengaged leads. But to do that, they need to do more than simply exist. They need to feel meaningful.

As Egor Belenkov, CEO of Kitcast.tv, puts it:

“Incentives only work when they feel valuable… Real connection always beats transactional rewards.”

That one quote sums up the challenge businesses face. In a world of constant offers and short attention spans, incentives must feel personal, purposeful, and perfectly timed.

At Rewardable, we’ve seen how rewards can drive real results across the entire marketing funnel, from awareness campaigns and lead generation to customer retention and advocacy. But the key isn’t just what you offer, it’s when, why, and how you offer it.

In this article, you’ll learn: 

• Why most incentive based marketing falls flat and how to avoid the same fate

• What makes a reward feel valuable, not just transactional

• How to use different types of incentives effectively at each stage of the funnel

• When to use gift cards (and when not to)

• How to measure the impact of your incentive strategy

• Tips for building long-term brand loyalty, not just short-term clicks

Whether you’re a marketing leader looking to improve performance or a small business owner trying to stand out without slashing prices, this guide will help you reframe how you think about rewards, and show you how to use them strategically.

Let’s dive in.

Contents

• What are incentives and rewards in marketing?

• Why incentives often fail (and how to do better)

• Top of funnel (awareness): how to attract new leads with smart incentives

• Middle of funnel (consideration): converting interest into action

• Bottom of funnel (loyalty and retention): keeping customers long-term

• The role of gift cards (when and why they work)

• How to measure incentive success

• Common pitfalls to avoid

• Bonus tips to make your incentive campaigns stand out

• Wrapping it all up: build smarter incentive campaigns today

• FAQs about incentive marketing and rewards

What are incentives and rewards in marketing? 

At first glance, the words incentive and reward might seem interchangeable, but in marketing, each serves a slightly different purpose.

An incentive is something offered before an action is taken. It’s a motivating factor designed to encourage a desired behaviour, like signing up for a newsletter, attending a webinar, referring a friend, or making a purchase.

A reward, on the other hand, is something delivered after the action is completed. It serves to recognise and reinforce that behaviour, often with the goal of encouraging it to happen again.

Marketing incentives create momentum. Rewards build loyalty.

A brief history of incentive marketing 

Incentive-based marketing isn’t new. It dates back decades, from supermarket loyalty stamps in the 1930s, to frequent flyer miles in the 1980s, to the explosion of digital cashback and referral programs in the 2000s. What’s changed dramatically is how incentives are delivered.

Today, we’re not limited to paper coupons or physical punch cards. Digital tools like Rewardable allow businesses to send instant, global, digital rewards with just a few clicks, whether that’s a £5 coffee gift card or something more tailored, like a donation to the recipient’s favourite charity. Or, as with Rewardable… a store of value that the recipient can choose to redeem for anything they choose from our range! 

How are incentives different from discounts or promotions? 

It’s easy to confuse incentives with general promotions, but there’s a key difference in intent and impact.

• Discounts lower the price of a product or service, often for everyone, and can inadvertently devalue your brand.

• Incentives are conditional and they're offered in exchange for specific actions. They feel more exclusive and less like a price drop.

This distinction matters. A 10% discount might temporarily drive sales, but an incentive, such as a £10 Rewardable for referring a friend, builds a stronger emotional link with your brand. You’re not just cutting prices; you’re building relationships.

Why matching incentives to intent matters 

Not all customer incentives are created equal and not every customer wants the same thing.

Blanket approaches like “£5 for everyone who signs up” might generate some traffic, but they don’t address the underlying motivations that guide behaviour at different stages of the customer journey.

That’s why the most effective marketing incentive plans are matched to user intent.

• At the top of the funnel: prospects may respond best to exclusive content or partner perks.

• In the middle: they may need a nudge like a trial extension or a small-value gift card.

• At the bottom: loyalty can be reinforced through recognition, surprise rewards, or community access.

When done right, incentives feel like a natural continuation of the relationship, not a bribe.

Why incentives often fail (and how to do better) 

Let’s face it: not all incentives are created equal. And not all of them work.

Businesses love to throw out gift cards, discounts, or sign-up perks and hope for the best. But when marketing incentives are poorly planned, or misaligned with customer intent, they don’t just fall flat. They can actively damage trust, devalue your offering, and waste precious budget.

So what goes wrong?

1. One-size-fits-all rewards 

Generic incentives are one of the most common mistakes in marketing. Giving every customer the same £10 gift card or blanket 20% discount might seem efficient, but it often feels lazy or irrelevant to your audience.

Customers are savvy. They can spot a mass blast campaign a mile away. If your incentive marketing ideas don’t feel personal or meaningful, it likely won’t move the needle.

The fix? Think about what matters to your customer at each stage of their journey. Personalised messages, flexible reward options (like letting them choose their gift card), and context-specific timing all make customer incentives more impactful.

2. Over-reliance on discounts 

Discounts are the default reward for many brands, but they come at a cost.

Over time, habitual discounting can damage your brand’s perceived value. Customers start to expect lower prices, wait for sales, and treat your products as commodities rather than something worth paying full price for.

Worse still, discounts can condition short-term behaviour while hurting long-term loyalty. If the incentive to buy disappears, so does the customer.

The fix? Use discounts sparingly and strategically, perhaps to drive urgency at a specific time or for a specific segment. Where possible, swap price cuts for value-added rewards that keep your pricing intact (like a bonus, gift card, or exclusive access).

3. Poor incentive timing 

Even a good incentive can fail if it’s delivered at the wrong time. Offering a reward too early can feel pushy, while offering one too late might miss the window of decision-making altogether.

Imagine offering a £10 voucher after a customer churns. Too little, too late.

The fix? Map your customer journey carefully and look for moments of decision, doubt, or delight. These are your key windows for action. Think welcome flows, onboarding drop-offs, or post-purchase engagement.

4. Lack of follow-through 

Another common pitfall? Making your customers work to receive a reward.

Long forms, vague instructions, reward delays, or having to chase support for a missing gift card all kill the experience and often, the relationship.

The fix? Make it effortless. Digital rewards should be instant, intuitive, and flexible. With Rewardable, for example, businesses can send personalised digital gift cards instantly, in the recipient’s local currency and preferred brand, minimising admin and maximising satisfaction.

TL;DR: the secret to smarter incentives 

Incentives fail when they feel:

• Impersonal

• Misaligned with customer mindset

• Transactional

• Inconvenient

They succeed when they feel:

• Timely

• Thoughtful

• Easy to redeem

• Aligned with what the customer actually wants

Next, we’ll explore how to match specific advertising incentives to each stage of the marketing funnel, so you’re not just rewarding behaviour, but guiding it.

Top of funnel (awareness): how to attract new leads with smart incentives 

At the awareness stage, your goal isn’t to close the deal. It’s to open a door.

This is the moment when people are discovering your brand, dipping a toe in, and figuring out if you’re relevant to their world. It’s your chance to stand out, show value, and build familiarity. Incentives can help, but only if they’re used well.

What not to do 

Too many businesses fall back on tired tactics here:

• Generic sweepstakes that feel like spam

• Mass discounts with no context or strategy

• One-size-fits-all sign-up bonuses that offer no unique value

These can attract the wrong kind of attention (think: freebie hunters), generate low-quality leads, and do little to build real interest or trust.

Instead, the goal should be to earn attention by offering something genuinely useful, relevant, or compelling.

What works to drive awareness and attraction 

1. Content-gated perks 

Want to drive newsletter sign-ups or whitepaper downloads? Offer something of clear value in return, without feeling like a gimmick.

For example:

• “Download our free industry report and get a £5 digital reward.”

• “Sign up to our newsletter and receive a bonus you can actually use, your choice of digital gift card.”

This builds your email list while offering real utility to your audience and it creates a great first impression.

2. Free tools and resources 

Offering useful tools or downloads, like calculators, templates, checklists, or how-to guides, can massively boost brand visibility. But don’t stop at free content.

Pairing these with small, personalised customer incentives (like a £5 reward for completing a toolkit or attending a webinar) gives your audience extra motivation to take that first step.

And because Rewardable supports a wide range of brands and currencies, you can easily tailor rewards to suit different industries, demographics, or regions.

3. Giveaways with strategic partners 

Giveaways can be powerful, but only when they’re aligned with your target market.

Rather than running broad sweepstakes, try co-branded giveaways with companies who serve your ideal customer. This expands your reach, adds credibility, and brings value to both audiences.

For example:

• A productivity app could team up with a remote working platform to offer gift cards to new sign-ups.

• An eCommerce brand might partner with a lifestyle influencer to run a curated giveaway.

This works because it builds awareness through networks that already have trust.

“At Kitcast, we leveraged industry leaders by giving them something worth talking about,” said CEO Egor Belenkov. “Co-branded content, product integrations, or perks that made them look good.”

4. Early access or exclusivity 

Exclusivity is a powerful psychological driver. It creates a sense of privilege, urgency, and importance, all great tools for building curiosity and driving action.

Offer advertising incentives like:

• “Be among the first 100 to sign up and receive a digital gift card.”

• “Join our early access waitlist and get a free month + a thank-you reward.”

• “Beta users will receive a surprise gift if they share feedback.”

This not only attracts new leads but builds a sense of community and connection from day one.

What to keep in mind at this stage 

At the top of the funnel, your leads don’t know you yet. That means:

• Your incentive should signal your brand values

• It should be low-friction and low-pressure

• And it should create positive emotional resonance

The best early-stage sales incentives for customers aren’t about hard conversion, they’re about warming up the relationship.

How Rewardable can help 

With Rewardable, you can effortlessly send digital rewards that work across currencies, devices, and borders, ideal for giveaways, downloads, or event-based incentives. Just set your budget, personalise your message, and let recipients choose the gift card that suits them.

No minimums, no platform fees, just thoughtful incentives, delivered instantly.

Middle of funnel (consideration): converting interest into action 

You’ve captured their attention, now you need to earn their action.

At this stage of the marketing funnel, your audience is aware of your brand and weighing up their options. They’re not ready to buy just yet, but they are exploring. The right incentives here can nudge them to take that next step, whether it’s signing up, booking a demo, or trying your product.

This is where smart, strategic incentives do more than just sweeten the deal, they create momentum.

What not to do 

Avoid the generic, short-sighted approach:

• A “10% off your first purchase” code that disappears into inbox oblivion

• Broad-brush discounts that appeal to everyone but motivate no one

• Points-based systems that take too long to feel rewarding

At this stage, people are looking for value and relevance. You’re not trying to bribe them, you’re helping them see why your brand is the right fit.

What works to convert interest into action 

1. Rewarding referrals 

Nothing builds trust like a personal recommendation.

Encourage engaged prospects to refer colleagues or friends in exchange for a Rewardable. For example:

• “Invite a friend to our webinar and you’ll both get a digital reward.”

• “Know someone who’d love [your product]? If they sign up, you get a £10 gift card.”

Because recipients can choose their own gift card via Rewardable, you avoid the trap of irrelevant rewards and you get warm leads who are far more likely to convert.

2. Personalised offers 

Generic offers don’t convert. Personal ones do.

Segment your audience based on their behaviours, what content they’ve downloaded, what events they’ve attended, or what stage they’re at and craft a relevant marketing incentive plan.

Examples:

• “Thanks for attending our webinar. Here’s a £5 gift card to say thank you.”

• “We noticed you’ve been exploring [product]. Book a demo and get rewarded with a digital thank-you, on us.”

This kind of gesture builds reciprocity and nudges action without resorting to price-slashing.

“I’ve seen early access to features or invite-only webinars drive more engagement than discounts ever could.” Says Egor Belenkov, CEO of Kitcast

3. Incentivising event attendance 

Events, webinars, product demos and workshops are great for nurturing prospects, but no-shows can be high.

Offering a small digital reward for showing up can make a big difference in attendance and post-event engagement. Try:

• “Join us for the session and we’ll thank you with a £5 reward.”

• “Stay until the end and we’ll send you something useful to say thanks.”

Not only does this increase participation, it gives you a great follow-up touchpoint to continue the conversation.

4. Surprise and delight 

Sometimes, the most effective sales incentives for customers aren’t the ones people expect.

Send a small thank-you gift card to a prospect after a great sales call. Or offer an unexpected reward to a prospect who’s been in your funnel for a while but hasn’t taken the next step.

These kinds of “delight” moments show attention to detail and they’re memorable.

Why it works 

At this stage, prospects are still evaluating. The best incentives help:

• Build trust and credibility

• Reduce friction around taking the next step

• Show appreciation for their time and attention

They also create a psychological moment of reciprocity: “They gave me something thoughtful, I want to give back.”

And unlike discount codes, which can make your product feel cheaper, rewards through Rewardable allow you to show appreciation without undermining your pricing strategy.

How Rewardable can help 

With Rewardable, you can easily send digital rewards that are:

• Personalised: with your branding and message

• Global: choose currency and region

• Flexible: recipients choose the gift card they want

You can even upload lists and send in bulk for event follow-ups or nurture campaigns, no clunky admin, just impact.

Want to drive more demo bookings or thank people for showing up to your next webinar? Set up a Rewardable campaign in under five minutes.

Bottom of funnel (loyalty and retention): keeping customers long-term 

Acquiring new customers is important, but retaining them is what drives long-term growth. Studies consistently show that increasing customer retention by just 5% can boost profits by 25–95%. That’s why the bottom of the funnel isn’t where the marketing journey ends, it’s where the relationship really begins.

This stage is all about nurturing customers, strengthening loyalty, and turning satisfied buyers into brand advocates. Incentives can play a key role here, but only when used with care.

What not to do 

Too often, retention campaigns fall flat because they’re:

• Generic: “Here’s 10% off your next purchase.”

• Transactional: impersonal rewards with no context or timing

• Inconsistent: random gestures instead of structured, intentional engagement

A spray-and-pray email with a gift card won’t cut it. True loyalty is built on consistency, relevance, and emotional connection.

What works to build long-term loyalty 

1. Milestone rewards that celebrate the customer 

Recognise key moments in your customer’s journey. That could be:

• Their first purchase anniversary

• Their tenth order

• A one-year subscription renewal

These milestones are perfect opportunities to say “thank you” in a way that feels intentional and rewarding.

Example: “Thanks for being with us for one year! Choose a digital gift card on us, just our way of saying we appreciate you.”

With Rewardable, these types of rewards can be scheduled in advance, so you never miss a moment to connect.

2. Feedback incentives that fuel engagement 

Customers want to feel heard. Asking for feedback, and offering a small reward for their time, can boost participation while deepening loyalty.

• Send a short net promoter score (NPS) or product satisfaction survey with a reward attached

• Incentivise online reviews or testimonials for recent purchases

• Ask customers to vote on new product ideas or upcoming features

When people are involved in shaping the brand, they’re far more likely to stick around.

“Customers stick around when they feel valued… Instead of generic discounts, we involved top users in beta testing, let them influence features, and even sent personal thank-yous.” says Egor Belenkov, CEO of Kitcast

3. Anniversary perks and celebratory moments 

These don’t need to be tied to purchases. A “happy birthday” gift or a surprise for being on your email list for a year can go a long way in showing appreciation.

You can even align perks with your brand calendar:

• Celebrate holidays with a token of thanks

• Send surprise rewards during slower business months to re-engage customers

These gestures don’t just feel nice, they remind customers why they like your brand.

4. Personal thank-yous with curated rewards 

Not all loyalty rewards need to be big. In fact, small, thoughtful rewards are often more meaningful, especially when personalised.

• Send a digital gift card with a thank-you message after a major purchase

• Let the customer choose from a selection that reflects their tastes

• Add a note from a real person (not just an automated email)

This kind of care builds emotional loyalty, the kind that doesn’t vanish with a competitor’s bigger discount.

Why it works 

At this stage of the funnel, customers are familiar with your brand, but familiarity doesn’t always mean loyalty. Thoughtful marketing incentive programmes help:

• Reinforce emotional connection

• Encourage repeat purchases and upgrades

• Turn passive buyers into active promoters
  
  
  

And because Rewardable offers a wide range of global gift cards, it’s easy to personalise the experience even when working remotely, or at scale.

How Rewardable can help 

Rewardable makes it simple to:

• Automate milestone and anniversary rewards

• Personalise client incentives with meaningful messages and flexible choices

• Scale your loyalty programme across currencies, countries, and campaigns

Whether you’re saying thank you for a great review, or celebrating a customer’s 12-month journey with your brand, Rewardable helps you show appreciation in a way that feels authentic, not automatic.

The role of gift cards (when and why they work) 

Let’s clear something up, gift cards aren’t the problem.

They’re fast, flexible, and universally understood. They’re not impersonal by default, but they can become that way when used without thought or context.

Incentives only fail when they’re used as a crutch, not a tool. When every campaign, every touchpoint, and every interaction is met with a generic gift card, your rewards programme loses meaning. But when used intentionally, gift cards can drive powerful results.

When gift cards work brilliantly 

1. For global teams or audiences 

Need to reward someone in Sydney, Stockholm, and San Diego all in one go? Good luck sourcing local experiences or vouchers that feel equally valuable.

This is where digital gift cards shine.

With Rewardable, you can:

• Send rewards across currencies and borders

• Let recipients choose from a range of local and international brands

• Deliver sales incentives for customers that actually feel usable, no matter where someone is based

Pro tip: The sender pays in their local currency, and Rewardable handles the rest, converting the reward seamlessly into the recipient’s currency. No extra fees. No complexity.

2. For low-lift, low-commitment marketing incentives 

Sometimes, you just need something quick and frictionless:

• A thank-you for attending a webinar

• A reward for filling out a survey

• A gesture for a small internal win

In these moments, a gift card offers immediacy. The recipient gets value instantly, and it doesn’t require deep personalisation or heavy admin.

Plus, you can still add a personal message or select a curated shortlist of brands to keep the gesture meaningful.

3. For short-term campaigns with tight turnarounds 

Running a last-minute lead gen campaign? Launching a referral push with a 2-week window? Hosting a seasonal contest?

Gift cards can be deployed at speed, no printing, shipping, or logistics to manage. With Rewardable, you can launch, track, and deliver digital rewards in minutes, not days.

They’re ideal for:

• Time-sensitive promotions

• “Act now” calls to action (CTAs)

• Quick wins that need instant gratification

When to pause before reaching for a gift card 

There are times when a gift card isn’t the best fit:

• When the moment calls for emotional connection. A handwritten note or personal thank-you might be better than a voucher, although with Rewardable, you can combine the two.

• When you want to deepen brand affinity. Exclusive content, insider access, or early previews can be more meaningful than money.

• When you’re rewarding high-value loyalty. For long-term customers, generic rewards can feel like a missed opportunity. Customisation matters here.

Remember: not all client incentives should be transactional.

How Rewardable makes gift cards smarter 

If you’re going to use gift cards, use them wisely and make the experience count.

With Rewardable, you can:

• Let recipients choose their own reward from hundreds of global brands

• Deliver in their preferred currency, without added fees

• Add branded messaging or thoughtful notes to every reward

• Track delivery, redemption, and campaign results in one place

When used with intention, gift cards remain one of the most powerful tools in your incentive toolkit.

How to measure incentive success 

It’s easy to assume that incentives are working, after all, you’re giving something valuable, right?

But unless you’re measuring the right metrics at each stage of the funnel, you won’t know if your rewards are actually driving the behaviours that matter to your business.

A free coffee voucher might feel nice in the moment. But if it doesn’t increase customer lifetime value or move leads down the funnel, it’s not doing its job.

Here’s how to measure what matters…

Top of funnel (TOFU): are you attracting the right attention? 

At this stage, your goal is to reach new people and make them aware of your brand. Incentives are often used here to:

• Drive clicks on ads or social posts

• Encourage email sign-ups

• Attract participation in contests or giveaways

Key metrics to track:

• Impressions: How many people saw your campaign?

• Click-through rate (CTR): Are the incentives generating curiosity and engagement?

• New users or subscribers: Did the campaign grow your audience?

• Conversion rate on landing pages: Are visitors taking the action you want?

Tip: Don’t just optimise for volume, look at the quality of the audience you’re attracting too.

Want to see how easy it can be to create high-impact, low-friction campaigns? Book a Rewardable demo today and experience it for yourself.

Middle of funnel (MOFU): are you turning interest into action? 

This is where leads decide whether or not to engage more deeply. Incentives are used here to:

• Encourage demo bookings

• Increase attendance at webinars or events

• Drive newsletter engagement or content downloads

• Nudge users toward trial sign-ups

Key metrics to track:

• Form fills or demo bookings

• Lead quality scores (based on sales team feedback or behavioural scoring)

• Engagement with gated content

• Conversion rate from leads to qualified opportunities

Tip: If you’re offering rewards at this stage, track how many users take the next step, not just how many claim the incentive. Rewardable’s sales team incentives platform makes it simple to launch these kinds of campaigns.

Case study: A SaaS company used Rewardable to incentivise demo bookings by offering a £10 digital gift card for attending. Over one quarter, demo bookings increased by 22%, and 45% of those leads converted into paid customers within 60 days.

Ready to boost demo bookings, lead conversions, and team performance? Start building your smarter incentive campaigns with Rewardable, book a demo now.

Bottom of funnel (BOFU): are you building long-term loyalty? 

Here, the focus shifts to retention, loyalty, and lifetime value. Marketing incentive programmes help:

• Reward repeat purchases

• Thank loyal customers on anniversaries or milestones

• Encourage referrals and upsells

• Prevent churn by showing appreciation

Key metrics to track:

• Repeat purchase rate

• Customer lifetime value (CLV)

• Churn rate

• Referral conversions

• Average order value (AOV)

Tip: Even if someone claims a reward, if they don’t come back or increase their spend, your incentive may need refining. Platforms like Rewardable help sales managers easily automate rewards for closing deals.

Case study: An eCommerce brand rewarded loyal customers with a £5 Rewardable digital thank-you gift at their one-year customer anniversary. Retention rates among those customers rose by 18%, and average order value grew by 12%.

Turn happy customers into loyal advocates. Discover how Rewardable can help you automate meaningful, personalised rewards, book your demo today.

Cross-funnel metrics: the overlooked indicators 

Regardless of where your promotional incentive gifts sits in the funnel, these metrics can tell you a lot about its effectiveness:

• Redemption rate: Are people actually using the rewards?

• Time to redemption: Do they use it right away, or forget about it?

• Engagement post-redemption: Did the reward lead to further interaction?

• Cost per action (CPA): How much are you paying for each desired behaviour?

Tip: A high redemption rate paired with no downstream conversion could mean your reward is attractive, but not targeted enough.

Use data to improve timing and targeting 

One of the biggest mistakes businesses make with rewards is treating them as set-and-forget. Incentives should evolve based on what your data shows.

Ask:

• Are your TOFU rewards generating the kind of leads that convert?

• Are your MOFU incentives actually shortening the decision cycle?

• Are your BOFU rewards improving retention or just adding cost?

Tools like Rewardable make it easy to track redemptions and campaign performance, so you can tweak, improve, and actually prove the ROI of your rewards.

When you treat marketing incentives as experiments, not assumptions, you give your team the data they need to make better marketing decisions.

Common pitfalls to avoid 

Incentives and rewards can be incredibly effective, but only when they’re done right. Too often, well-meaning campaigns fall flat, not because the idea was bad, but because of avoidable missteps.

Here are some of the most common mistakes businesses make and how you can steer clear of them.

1. Sending rewards too late 

The problem: Timing is everything. If there's a long delay between the desired action and the reward, the emotional connection weakens and so does the impact.

What happens: Recipients forget what they did to earn the reward. Excitement fades. Redemption rates drop. Worse still, your brand looks disorganised or unreliable.

The fix: Use a platform like Rewardable to automate reward delivery and make the experience instant. When someone completes a survey, attends a webinar, or hits a milestone, thank them right then and there. The faster the reward, the stronger the positive association with your brand.

2. Lack of clarity on redemption 

The problem: If it’s not 100% clear how someone redeems their reward, you risk frustration and confusion.

What happens: You lose trust. People abandon the process or bombard your support team with questions. Your campaign results get skewed because users wanted the reward, they just couldn’t figure out how to get it.

The fix: Make sure your redemption instructions are crystal clear. Keep them short, simple, and tested. Rewardable’s user-friendly platform makes this easy with a seamless experience for both senders and recipients.

Bonus tip: Include visuals, like a screenshot of what the recipient will see, in your comms, to preempt any confusion.

3. Overusing discounts or devaluing your product 

The problem: Relying too heavily on discounts can backfire. While short-term sales may spike, you’re also conditioning customers to wait for the next deal.

What happens: Margins shrink. Loyalty becomes transactional. Your product starts to lose perceived value, especially if competitors are running similar offers.

The fix: Use client incentives that add value, not subtract it. Think: a gift card for a coffee, a small bonus reward after repeat purchases, or early access to a feature, not 20% off everything, all the time.

Remember: You want to reward behaviour, not discount your worth.

4. Failing to test and iterate 

The problem: Launching a rewards program and never revisiting the results is like running an ad campaign without checking performance.

What happens: You miss valuable insights. Maybe different promotional incentive gifts would’ve worked better, or maybe a different timing window would’ve doubled results. But you’ll never know.

The fix: Track key metrics like redemption rates, time to redemption, downstream conversions, and cost per action. Run A/B tests with different marketing incentives at each funnel stage. Rewardable gives you visibility into how your campaigns perform so you can continuously optimise.

Remember: Data turns assumptions into results. Don’t set and forget, learn and improve.

Bonus pitfall: using the same incentive for everyone 

The problem: Not all customers are motivated by the same things. What delights one user might be meaningless to another.

What happens: Rewards fall flat. Engagement stagnates. ROI underwhelms.

The fix: Offer choice. One of Rewardable’s strengths is letting recipients pick the reward that fits their life, in their local currency and from a wide selection of global brands. Flexibility = higher redemption and happier recipients.

The takeaway? Even the best campaigns can fail without careful planning, thoughtful design, and attention to the customer experience. But when you avoid these pitfalls, you unlock the true power of incentives: 

meaningful, motivating moments that drive action and results.

Bonus tips to make your incentive campaigns stand out 

You’ve got the strategy. You know how incentives work across the funnel. But to truly stand out, to turn a good campaign into a great one, requires a few final flourishes.

These bonus tips will help you take your incentive based marketing from functional to unforgettable.

1. Align marketing incentives with your brand tone 

Why it matters: Every reward you send is an extension of your brand. A luxury skincare company giving away generic Amazon vouchers? Off-brand. A wellness startup offering a curated self-care reward? Spot on.

The tip: Choose incentives that reflect your voice and values. Are you quirky and fun? Consider surprise “mystery” rewards. Are you premium and polished? Offer elegant experiences, quality brands, or exclusive access. The reward should feel like it could only have come from you.

2. Personalise the experience 

Why it matters: Personalisation deepens emotional connection. When someone feels seen and understood, they’re more likely to respond positively and stick around.

The tip: Personalisation doesn’t have to be complex. Add their name. Reference the event that triggered the reward (e.g. “Thanks for joining our webinar!”). Use Rewardable to let recipients choose what matters to them: food, fashion, tech, experiences, or even a charity donation.

A reward that says, “We see you,” always outperforms one that says, “We sent this to everyone.”

3. Mix tangible and intangible rewards 

Why it matters: Not all value comes with a price tag. Recognition, belonging, and status can be even more powerful than a free gift.

The tip: Pair your gift cards or perks with something human. Publicly celebrate top contributors. Give loyal customers early access. Thank them personally in your email. Create exclusive content or invite them to VIP spaces. The combo of reward + recognition goes further than either alone.

4. Use scarcity to drive action 

Why it matters: People act faster when they know an opportunity won’t last.

The tip: Add urgency with a limited-time or quantity-based reward. Try phrases like:

• “Only the first 100 to complete the survey will receive a gift.”

• “Offer ends Friday at midnight.”

• “The first 50 signups get early access and a £10 gift card.”

Scarcity, when used ethically, adds momentum to your campaign and motivates fence-sitters to jump in.

5. Surprise and delight (when they least expect it) 

Why it matters: Some of the most impactful rewards are the ones no one saw coming.

The tip: Send an unexpected thank-you reward to a loyal customer. Acknowledge a long-time follower on social media. Surprise a top performer with an unannounced gift. The ROI of delight is real, it creates memorable brand moments people talk about.

6. Make redemption frictionless 

Why it matters: If claiming a reward is hard, you’ll lose engagement fast. Confusion kills momentum.

The tip: Use a rewards platform like Rewardable that delivers digital gift cards instantly, with a smooth and intuitive user experience. No clunky links. No long forms. Just a great experience, from send to spend.

Small tweaks like these can have a big impact on how your incentives are received. The more intentional and thoughtful your reward experience is, the more effective your campaign will be.

Wrapping it all up: build smarter incentive campaigns today 

Incentives aren’t just a last-minute add-on. When done right, they’re a powerful lever to guide customers at every stage of your marketing funnel, from first touch to lifelong loyalty.

Whether you’re attracting new leads with early-access perks, converting interest with thoughtful thank-you rewards, or deepening loyalty through anniversary gifts and personalised gestures, the key is this: match the right promotional incentive gifts to the right moment.

• Use exclusivity and partnerships at the top of the funnel

• Spark engagement and referrals in the middle

• Build trust and retention at the bottom

• Measure what matters and iterate often

And remember, while gift cards are a fantastic tool (especially when flexibility and global reach matter), they’re just one part of a much bigger picture.

That’s where Rewardable comes in.

Our platform helps businesses like yours send thoughtful, flexible digital rewards to customers, leads, and staff, globally, instantly, and without the fees or friction. No spreadsheets. No postage. No guesswork. Just rewards that work.

Ready to power smarter incentivised marketing?

Sign up for Rewardable or book a demo today and turn your campaigns into conversion engines.

FAQs about incentive marketing and rewards 

What is incentive based marketing, and how does it work? 

Incentivised marketing is the practice of offering a reward, such as a gift card, discount, or exclusive perk, to encourage specific customer behaviours. It can be used across the funnel to drive actions like sign-ups, purchases, referrals, or feedback. When matched to customer intent,  incentives help build loyalty, increase conversion, and improve customer lifetime value.

Are digital gift cards still effective in 2025? 

Yes, when used strategically. Digital gift cards remain one of the most effective, flexible rewards, especially for global audiences or when speed matters. The key is personalisation: letting recipients choose a brand or type of reward that fits their needs. Platforms like Rewardable make this seamless and scalable.

What types of incentives work best at each funnel stage? 

• Top of funnel (awareness): Early access, exclusive downloads, or giveaway perks

• Middle of funnel (consideration): Referral bonuses, thank-you rewards, or personalised offers
  Bottom of funnel (loyalty): Milestone gifts, feedback incentives, or anniversary perks

What’s the difference between an incentive and a discount? 

An incentive is a reward offered conditionally, based on behaviour. A discount reduces price for everyone, often eroding brand value. Incentives build engagement without relying on margin-cutting tactics.

How can I track the success of my incentive campaigns? 

Start by measuring:

• Redemption rate: Are people using the reward?

• Conversion rate: Does the incentive lead to action?

• Customer Lifetime Value (CLV): Are they staying and spending?

• Cost per action: Is the ROI positive?

How do I avoid overusing rewards or devaluing my brand? 

Use incentives with intention. Avoid blanket discounts or always-on rewards. Instead, reward specific behaviours, personalise the experience, and experiment with timing. Use rewards to add value, not just reduce price.

Can I automate rewards across different regions or currencies? 

Yes. With Rewardable, you can send digital gift cards globally, letting each recipient choose their own reward in their local currency, without extra fees or manual admin.

Is Rewardable only for gift cards? 

No. Rewardable is designed to support smart incentive strategies, across gift cards, personalised rewards, charity donations, and more. It’s ideal for marketers, sales teams, and customer success managers who want to reward people without spreadsheets, delays, or headaches.

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