Some companies make the mistake of assuming that an incentive is the unique value they
are providing to their customers. What they fail to recognize is that value proposition goes
deeper than an incentive of free shipping or a 10% discount. Value proposition defines your
company, and the incentive complements that value. For instance, Zappos.com, shown in Figure 7-3, is well known for its customer
service, and its incentives of free shipping and a 365-day return policy feed into the
customer service value it provides and markets to its customers.
Value proposition refers to the way a store positions itself in a growing competitive
market. As a company, what value do you provide your customers? Stores cannot define their
value only with incentives, but incentives are a part of the equation, enhancing the
customers’ experiences and persuading them to complete a purchase. However, it’s the value
proposition that first reels in visitors to the site and piques their interest.
Incentives vary tremendously, and as we mentioned earlier in this chapter, companies use
them to achieve certain goals.
Membership-only websites allow visitors to buy items at discounted prices after they
join. Although this concept has existed offline for many years, websites such as
Ideeli.com and DollarDays.com are successfully experimenting with it online. Both websites
require interested prospects to become members before they can purchase items offered on
their sites. Forcing visitors to join a website increases the visitors’ FUDs, and many may
opt not to register because of this contingency. However, both of these online stores
offer products at discounted prices, so people looking for a bargain may overlook the fact
that they have to register to make a purchase.
Ideeli.com, shown in Figure 7-4, does
not allow visitors to view products or any “sales” it is offering prior to becoming
members. The store relies heavily on referrals to grow its membership base and has applied
the concept of incentives to customer referrals as well. Since it is a membership-only
site, Ideeli.com allows users to upgrade their membership, for a monthly fee, to gain
prime access to its sales. DollarDays.com, shown in Figure 7-5, allows visitors to view its
products prior to becoming members. However, pricing information is reserved for members
only. This provides a little flexibility for new users who are unsure of what the store
offers.
Newport-News.com, shown in Figure 7-6, is a website that allows all
visitors to view products and pricing information. However, visitors who pay a $25
membership fee become members of The Club, which offers “exclusive benefits” such as 10%
discounts on all orders, 20% discounts during certain times of the year, and access to
private sales and promotions. This tactic allows the store to benefit from customer
loyalty, receive up-ticks in sales during benefit periods, and still cover its costs
thanks to the membership fee it charges.
Are membership requirements a FUD? There is no doubt that restricting visitors’
access to your site’s products and/or pricing information causes an added FUD. So, how do
these sites succeed? Consider an offline store, such as Costco or Sam’s Club, which offers discounted products sold in bulk. However, they
require that you become a member (for a fee) prior to purchasing from their store. These
stores succeed because of the incentives, or very often the “perceived” incentives, and value that customers
receive as members.
Does this mean that as long as you offer incentives, FUDs are insignificant? The
reality is that answering users’ questions and reducing their anxieties is still key to
any successful transaction. But incentives do help.
