The B2C marketer's guide to acquiring customers for less
By Zach Links|6 min read|Updated Nov 6, 2024
Marketing budgets have fallen by 15%, according to Gartner’s annual CMO Spend Survey.
At the same time, data limitations and privacy concerns have made it harder to reach prospects through conventional means. But creative marketers are finding new ways to acquire customers for less.
Read on for actionable insights on winning new customers.
Table of contents
Lead generation: Capturing interest, creating opportunities
Lead generation is the lifeblood of customer acquisition. It's about attracting potential customers and nurturing them through the sales funnel.
Incentives can dramatically boost lead generation efforts without breaking the bank. They provide a tangible reason for potential customers to engage with your brand.
By offering something of value upfront, you can increase conversion rates at critical touchpoints — often with a higher ROI than traditional advertising.
Here's how incentives can supercharge your lead gen efforts, from contests to webinars.
Contests and sweepstakes
Contests and sweepstakes can attract a large volume of leads, quickly and on the cheap.
Sweepstakes create a sense of urgency and scarcity by prompting customers to sign up by X/X for their chance to win.
They can also carry a higher perceived value than guaranteed rewards. A sweepstakes only has to have one prize, whereas a promotion like a coupon has to provide the reward to everyone who redeems it.
In 2023, GoMacro, an organic protein bar company, launched a tag-a-friend social media sweepstakes campaign. The sweepstakes invited customers to tag two friends in a comment on one of its Instagram photos and follow the GoMacro account for a chance to win free protein bars.
The campaign generated over 450 comments tagging 900 prospects and contributed to a boost in 1,000 new followers of the GoMacro Instagram account.
Of course, contests can do more than just drive email signups or Instagram followers. Consider using sweepstakes to:
Boost referrals: Encourage participants to refer friends for additional entries. This can significantly amplify your reach and lead generation potential.
Generate user content: Ask followers to submit photos or videos using your product as an entry method. This creates engaging content you can use in future marketing efforts.
Reward loyalty: Run exclusive sweepstakes for loyalty program members. This can increase program sign-ups and engagement from your most valuable customers.
Re-engage lapsed customers: Use sweepstakes in win-back campaigns to reignite interest from dormant customers or subscribers.
Best practices for sweepstakes:
Keep entry requirements simple to maximize participation: Ask for minimal information, like name and email. Complicated forms deter entries.
Use social sharing as an entry method to increase organic reach.
Offer a high-value prize to generate excitement: Choose a prize that resonates with your audience. Gift cards are often a safe bet — one study found that consumers prefer $100 Visa or Amazon cards over other types of prizes due to their flexibility.
Include a consolation prize for non-winners (i.e. $X off your next purchase): Turn losing participants into customers. A well-timed 10% promo code can nudge customers from consideration to purchase fast.
Be sure your promotion complies with federal and state laws: Sweepstakes regulations vary by location. Consult a legal professional to ensure your promotion stays above board.
Demo incentives
For companies with longer sales cycles or higher-value products, incentivizing demos can be a powerful lead generation tool.
Prospects might balk at sitting through a demo for high-value, complex products, but incentives sweeten the deal. That’s why demo incentives are popular across industries, especially in competitive markets like smart home technology, energy, auto, and software.
Rewards give prospects a reason to engage, letting companies showcase hard-to-explain features or long-term value props. It's a small investment to get decision-makers in the door and kickstart the sales process.
We tested this approach at Tremendous, offering gift card incentives for booking sales demos via LinkedIn. The results were striking: incentivized leads showed a 236% increase in LinkedIn-to-CRM conversion rate and an 81% decrease in cost per qualified lead.
Best practices for demo incentives:
Align the incentive value with your product's price point: A $10 gift card won't cut it for solar companies trying to persuade a homeowner to make the leap from fossil fuels to clean energy. Match the reward to the time investment you're asking for and the potential deal size.
Use conditional incentives: Be clear about the requirements — i.e. "Complete a 30-minute demo to receive _____." This helps filter out those only interested in the reward, leaving you with more qualified leads.
Implement thorough lead qualification to ensure high-quality prospects: Use targeted ads and screening questions to filter leads. For example, a car manufacturer might screen for household income and current vehicle ownership.
Follow up promptly with incentive delivery to maintain momentum: Send rewards right after the demo — ideally, rewards that can be received and used instantly. It reinforces positive feelings about your brand and keeps the conversation moving forward.
Test different incentive amounts to find the sweet spot for your audience: Our study found that $50, $100, and $105 all outperformed no incentive. But $50 drove the highest form submission rate. Experiment to find what works for your market.
Signup incentives
Offering an incentive for signing up or creating an account can be an effective way to grow your email list or user base.
Businesses relying on recurring revenue — like subscription-based services and apps — lean heavily on signup incentives. A small upfront reward can lead to years of customer loyalty, so the initial push to get users onboard can yield long-term revenue.
Robinhood, the stock trading app, used a powerful signup incentive: a free stock valued between $2.50 and $200 for new users. This program helped Robinhood grow from 1 million users in 2016 to over 13 million by 2020, a 1200% increase in just four years.
PowerMarket, a clean energy company, uses signup incentives to nudge potential customers toward adopting renewable energy sources. They offer rewards to new customers for signing up and for referring friends.
By switching to a more flexible incentive platform, PowerMarket saved over $8,000 on incentives while delivering a better customer experience. They now receive consistent positive feedback about their incentive program.
Spot Pet Insurance also offers new customers a reward for signing up: the insurance provider treats first-time customers to a $25 Amazon gift card.
“It’s really helped us stand out from our competitors,” said Shane Grosskopf, Compliance and Operations Manager at Spot.
Spot has sent more than $1.3 million in incentives to new customers in the last year alone.
"On the sales side, it's great to tell partners that this is something we do. We can say, 'Hey, you can offer this to your clients and tell them they could be getting a $25 gift card after their first month,’” said Steven Gilliam, Head of Product at Spot.
Best practices for signup incentives:
Keep the signup process quick and simple: Minimize friction. Ask only for essential information to complete the signup.
Clearly communicate the value of the incentive: Spell out exactly what new users will receive and how they'll benefit.
Deliver the reward instantly upon signup completion: Use digital rewards that can be sent and redeemed immediately to maintain momentum.
Offer choice in rewards: PowerMarket chose Tremendous as its rewards platform, enabling customers to choose from various redemption options like PayPal, Venmo, and direct transfers. “We receive positive feedback all the time,” Leland Gohl, PowerMarket’s Director of Marketing and CX. They’ve also saved thousands of dollars on fees.
Align incentives with brand values: Consider your audience's preferences. For example, a sustainable apartment complex might offer rewards like donations to environmental charities, reinforcing their brand identity and appealing to environmentally conscious renters.
Webinars and events
For B2C companies, driving attendance to webinars and events can be challenging.
Consumers are bombarded with invitations and often struggle to see the immediate value in attending. Even for free events, companies report dropout rates of 50% or more.
Add to that the distractions of home for virtual events, and engagement becomes an uphill battle.
Incentives can significantly boost attendance and engagement for webinars and events. They tap into our social nature and motivation for rewards.
One event-planning company faced these challenges head-on when the pandemic hit. They had to quickly pivot from in-person to virtual events while maintaining attendance and engagement levels.
By implementing digital incentives for event registrations and feedback surveys, FUSION saw remarkable results. Their sales more than doubled, even when travel was restricted.
At Tremendous, we've used similar tactics to decrease no-show rates and increase engagement. For instance, we offer Uber credits to cover participants' rides to and from in-person events.
Best practices for webinars and events:
Use prepaid incentives to boost attendance: Leverage the principle of reciprocity. Offer something upfront, like a lunch voucher, to encourage people to show up.
Implement engagement incentives throughout the event: Use quizzes or contests with small rewards ($10-$25) to keep attendees tuned in. We've found this creates a positive association with our brand.
Offer a mix of incentive types: Stack multiple incentives. For example, combine contests during the event with an exclusive offer at the end.
Make rewards flexible and universally appealing: Use digital rewards that recipients can choose how to redeem. FUSION found that letting attendees choose from over 800 vendors became their most popular option.
Referral programs: Turning customers into advocates
Referral programs leverage your existing customer base to bring in new business. They’re incredibly effective — and cost-effective.
Referred customers:
Carry a 4x higher lifetime value than non-referred customers
Convert 5x faster than customers acquired through other means
Have approximately 25% higher LTV compared to non-referred customers
And they’re 200% more likely to spend than non-referred customers
Today’s consumers have grown skeptical of paid ads. But, by turning loyal customers into brand advocates, you can tap into a wellspring of trust and authenticity that traditional ads can’t buy.
Still, creating a successful referral program isn't just about offering incentives and hoping for the best. It requires a strategic approach that aligns with your brand values, resonates with your customer base, and seamlessly integrates into their social interactions.
When done right, a referral program can become a self-perpetuating growth engine, driving acquisition and retention in tandem.
Here’s how you can structure a referral program that will attract new customers and strengthen relationships with your current customers.
Structure your rewards
The key to a successful referral program is offering rewards that motivate both the referrer and the new customer.
Casper famously achieved significant growth with its two-sided referral program.
The mattress company gave its customers a $75 Amazon gift card for every successful referral and a 25% discount to new customers.
The program generated 7x higher returns than their average marketing investment.
Casper's program stood out for its balance of generosity and practicality. The $75 gift card was substantial enough to motivate existing customers to make referrals.
Meanwhile, the 25% discount compelled new customers to buy from Casper. Mattresses are a high-consideration, infrequent purchase, but this discount nudged consumers to follow through.
And, by offering an Amazon gift card rather than Casper credit, the company acknowledged that their customers may not need another mattress anytime soon. This flexibility increased the perceived value of the reward and made customers more likely to participate.
Choose the right incentives
The type of incentive you offer can significantly impact your referral program's success. While discounts and store credit are common, cash or cash-equivalent rewards often perform better.
Cash and gift cards are particularly effective because they offer flexibility and immediate gratification. Customers want rewards they can use on their own terms, rather than being limited to a single product or brand. This is especially true for companies with infrequent purchases or limited product lines, like Casper.
Gift cards, while not as fungible as cash, can be even more motivating in some cases.
A University of Wisconsin study found that people were more motivated by $20 movie theater gift cards than $20 cash payouts. That’s because gift cards are mentally categorized as "fun money," encouraging people to treat themselves rather than using the reward for everyday expenses.
Make it easy to share
The easier it is for customers to refer friends, the more likely they are to do so.
Uber integrated their referral option directly into their app's main menu, making it one of just four primary navigation items. With prominent placement, users can easily find and share their unique referral link with friends.
The process is easy: log in, tap to copy or text your code, and share it with friends. When new users sign up using this link, both parties get ride credits.
By lowering barriers to participation, Uber has seen a 12x ROI on its referral program.
Uber's strategy demonstrates that when referral programs are seamlessly integrated into the user experience, they can drive significant growth and customer acquisition at a fraction of the cost of traditional marketing methods.
Track and optimize
Continuously monitoring and improving your referral program is crucial for long-term success.
Unique tracking codes for each referral channel can help you pinpoint the methods that yield the most valuable referrals.
Let’s say a B2C skincare brand uses distinct codes for referrals shared via email and social media. They might find that Instagram shares generate the most referrals, but email referrals lead to higher-value customers who make repeat purchases. This insight would help them allocate resources more effectively, perhaps by creating email-specific incentives.
For more insights, consider short, focused customer surveys with quantitative and qualitative questions. For example, you could have program participants rate their experience 1-10 and also ask, “What would make you more likely to refer friends in the future?” You could even offer a small incentive to drive participation.
It’s also important to continually test your messaging. Uber has retooled its CTAs many times over the years. At one point, the company found that using "free rides" instead of "refer a friend" was more enticing to users, leading to higher participation rates and, ultimately, a 1200% ROI.
Similarly, Airbnb's A/B testing revealed that altruistic messaging ("Give Your Friends $25 to Travel") outperformed self-interested messaging ("Invite Your Friends, Get $25"). This insight, combined with other optimizations, helped Airbnb's referral program fuel growth from about 1,000 users to over 2 million in just two years.
Rebates and cashback: Incentivizing purchase decisions
Rebates and cashback offers are powerful tools for driving immediate sales while building long-term customer relationships. They're particularly effective in competitive markets or for higher-priced items.
Unlike discounts, which reduce your profit margin on every sale, rebates allow you to maintain your price point while still offering an attractive incentive.
A medical aesthetics company used a cashback incentive to drive adoption at the launch of a new product. Without the brand awareness needed for a purchase-based promotion (e.g. buy three treatments, get 50% off the 4th), they incentivized customers with a digital $75 Visa prepaid card.
In just six months, the medical aesthetics company won 180K new customers and captured the #3 market share position. And, by using Tremendous, they saved over $1 million on fees as they distributed over $20 million in payouts.
Your company might be working with a smaller budget. Good news: Our research, conducted in partnership with The Decision Lab, shows that rebates can yield almost as many sales as discounts on just ~33% of the budget.
Why? Because some customers don’t claim their rebates, allowing you to sell those products at full MSRP.
To maximize the cost-effectiveness of your rebate or cashback program, consider these research-backed strategies.
Offer cash or prepaid cards, not store credit
Consumers perceive prepaid cards as significantly more valuable than store credit. Our research found that a $50 prepaid card is seen as equivalent to $180 in store credit.
Cash transfers (like PayPal or Venmo) are popular, but they can be challenging to manage at scale.
Snagshout, a social deals platform, switched from PayPal to Tremendous’ flexible payout system, allowing customers to choose from over 2,000 redemption options. This change not only improved customer satisfaction but also saved the company thousands in fees and 20 hours of admin work per month.
Frame your offer effectively
How you present your cashback offer can significantly impact its perceived value.
Framing rebates in dollar amounts rather than percentages makes them more appealing. For example, "Get $50 back" is more compelling than "Get 10% back" on a $500 item.
Additionally, using action-oriented language like "earn" can be slightly more effective than "save," "get," or "receive." These small language tweaks cost nothing to implement but can boost engagement significantly.
Target the right promotion value
After analyzing 430 discounts and rebates across 21 e-commerce websites, we found that the most common rebate or cashback offer was for 30% of the product's sale price. However, you should adjust this percentage based on your industry norms and profit margins.
For instance, a medical aesthetic's company's $75 cashback proved to be the right balance to attract patients while still allowing for profitable growth.
Simplify the redemption process
Make your rebate easy to redeem and market it as such.
Our study showed that employed adults, in particular, responded positively to an "easy to redeem" label. This perception of ease can increase the initial appeal of your offer.
However, it's worth noting that even with a simple online redemption process, not all customers will follow through. This "breakage" is part of what makes rebates cost-effective for businesses. For example, in one study, only about 40% of people claimed a $20 rebate offer.
By implementing these strategies, you can create a rebate or cashback program that drives sales, attracts new customers, and maintains healthy profit margins. Remember to continuously test and refine your approach to find what works best for your specific audience and products.
Conclusion: The power of strategic incentives
In an increasingly competitive and privacy-conscious digital landscape, incentive-based customer acquisition strategies offer a powerful way to stand out and drive growth.
By strategically implementing lead generation tactics, referral programs, and rebate or cashback offers, B2C marketers can:
Lower customer acquisition costs
Increase conversion rates
Boost customer lifetime value
Drive brand loyalty and advocacy
The key to success lies in understanding your audience, choosing the right mix of incentives, and continuously testing and optimizing your approach. With the strategies and best practices outlined in this guide, you're well-equipped to create incentive programs that not only acquire new customers but also turn them into long-term brand advocates.
Tremendous makes it easy to implement and manage these incentive programs at scale. Our platform offers:
Over 2,000 reward options, including gift cards, prepaid cards, and direct deposits
Seamless integration with your existing systems through our API and partnerships
Automated reward distribution, saving you time and reducing administrative overhead
Real-time tracking and reporting to help you optimize your programs
Whether you're looking to launch a referral program, boost event attendance, or implement a cashback offer, Tremendous can help you deliver rewards that resonate with your audience and drive results.
Published October 23, 2024
Updated November 6, 2024
