In today’s competitive market, customer incentives aren’t a nice-to-have. They’re a strategic lever that can transform how customers interact with your brand - how often they buy, how loyal they are, and how likely they are to recommend your brand to others. But designing a program that actually moves the needle? That takes more than a quick discount code.
In this guide, we’ll explore different types of customer incentives - like gift cards, loyalty schemes and referral bonuses - along with practical examples and strategic insights. Whether you're trying to boost retention, improve acquisition, or simply show customers they matter, you’ll find ideas and guidance to help you build an incentive program that actually delivers results.
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Customer incentives are rewards or benefits offered to encourage a specific action or behaviour. At their core, they’re a way to influence decision-making - nudging customers toward choices that benefit both them and your business.
That action could be anything from signing up to a service, making a purchase, referring a friend, leaving a review, or simply staying loyal over time. The incentive is what makes it worth their while.
But customer incentives aren’t just about giving something away. Done right, they create a mutual value exchange. The customer gets something meaningful - whether it’s a gift card, a discount, or exclusive access. You get increased engagement, improved retention, and often a measurable boost in revenue.
They can take many forms, including:
Importantly, incentives aren’t one-size-fits-all. What motivates one segment of your audience might fall flat with another. That’s why smart businesses approach incentives strategically - choosing the right format, delivery method, and moment to make them count.
Customer incentives work because they tap into a simple truth: people respond to value. When that value is immediate, tangible, and personalised, it drives action. That action might be a purchase, a referral, a repeat visit, or even brand advocacy.
But beyond the psychology, there’s a business case. Incentives can:
The right incentive at the right time can shift behaviour and build deeper customer relationships. And increasingly, enterprise businesses are turning to more flexible, scalable options like physical & digital gift cards to do exactly that.
Let’s explore some of the most effective customer incentives being used today - along with where each one works best.
Gift cards are rising in popularity for a reason. They offer flexibility for customers and total control for businesses. Whether you’re rewarding loyalty, encouraging referrals, or nudging a prospect to convert, gift cards work across the customer journey.
Example:
A large online retailer uses branded prepaid gift cards to reward customers who leave product reviews. It boosts user-generated content and builds trust for future buyers. The cards are distributed digitally and redeemed in-store or online - no postage, no delays.
Why it works:
Tip: Open loop gift cards (such as prepaid Mastercard® ones) are more versatile than store-specific ones, making them ideal for enterprise-scale programs with varied audiences.
Learn more: Launching and managing a gift card program
Traditional points-based schemes still work - especially when tiered or gamified. But it’s the emotional connection that makes them effective.
Example:
An airline uses a loyalty tier system where customers climb levels based on flight frequency and spend. Higher tiers offer not only free flights but exclusive lounge access and priority boarding. It taps into status and experience, not just cost savings.
Why it works:
People trust people. Referral schemes reward customers for spreading the word, helping brands tap into social proof and word-of-mouth growth.
Example:
A fintech startup offers a £20 gift card to both the referrer and the new customer when an account is opened. The incentive is clear, quick, and valuable to both sides.
Why it works:
Yes, they still work. Especially for new customers or cart abandoners. But be strategic - too many discounts can harm perceived value.
Example:
A subscription brand offers 10% off if a customer completes checkout within 30 minutes of abandoning their cart. Urgency and reward wrapped into one.
Why it works:
Throwing discounts at every customer won’t get you far. A successful program starts with strategy.
What motivates them? Price? Status? Flexibility? The same incentive won’t work for everyone. Segment your audience and tailor the approach.
Is the aim to drive new sign-ups, increase average order value, or reduce churn? Without specific goals, you won’t know if your program is working - or how to improve it.
Here’s where many businesses fall short. Even the best-designed incentive won’t succeed if it’s hard to redeem or manage at scale.
Edenred Payment Solutions offers enterprise-grade infrastructure for digital and physical gift card incentives. You can:
This is particularly important when running incentives across multiple regions, audiences, or touchpoints.
Don’t just “set and forget.” Track redemptions, conversions, uplift in engagement, and longer-term behaviours. Then refine. Incentive strategies should evolve with your business.
If you’re considering gift cards as part of your customer incentive strategy, but aren’t sure where to start, Edenred Payment Solutions offers a free, on-demand online course designed specifically for enterprise teams.
In Develop a gift card program that’s right for your business, you’ll learn how to:
Whether you’re starting from scratch or optimising an existing setup, this course provides the strategic framework and practical insight needed to get it right.
Customer incentives aren’t just about quick wins. When done well, they build lasting relationships, deepen customer engagement, and create brand advocates. And with flexible tools like prepaid gift cards, it's never been easier to design rewards that feel personal - without overcomplicating operations.
But strategy is everything. Know your audience. Align incentives to your goals. And work with partners who make delivery seamless.
With Edenred Payment Solutions as a trusted partner, retailers can unlock the full potential of their gift card initiatives, by leveraging our expertise and resources, to drive customer engagement and foster lasting brand loyalty.