At the Grocery they call them "loss leaders". Other marketers call them "freebies". For most of us it is the perception of getting something for nothing. Whatever you call them, these freebies or loss leaders are incentives. A reward to  take some action.

For Interiorscapers the actions we want to incentivize may be signing a contract, renewing a contract, going for a lease option rather than a purchase with service, or agreeing to some other action. Incentives for our industry might be First Month Free, Second Month Free, Thirteenth Month Free, Percentage Discount, and so on. At first glance, all of the above may seem equal. Not so. I contend that if I am going to give away a free month of service that the most beneficial to me, the interiorscaper, is the Thirteenth Month Free, then the second month free and lastly, the first month free.  Why? Because the thirteenth month free means that they are signing a second year of service and this puts us in the position of giving away one twentyfourth of the contract not one twelveth as the first or second month situation does.  And the second month free is better for us than the first month becauseat least we would have one month cash flow in place and it gives the client a time frame to set up the bookeeping.

Other incentives might include an extra ongoing blooming plant.  Nice touch.  Not terribly expensive and very showy.  Another incentive is to charge the client an up front fee for, say design, and then mark your proposal with the statement that the design fee is negated if you are the successful bidder.  Not easy to pull off for smaller jobs but seems to work more often for large scale projects.  I bid on a Shopping Mall once and the design specs were written by a large IP company.  They stated that their $3,000 "design fee" would not be charged IF they were the successful bidder.  Wanna guess who got the job?  Yep, they did.

The worst incentives are Percentage discounts UNLESS you have marked up prices in advance and then discount to return to the appropriate level.  In the world of Percentage Off, discounts off of  a one time Sale of Plants/Planters is far better than a percentage off of a monthly recurring charge like guaranteed Maintenance.  With a percentage off a one time charge you have only shot yourself in the foot…..once.  If you discount a monthly recurring charge, you have shot yourself not once, but 12 times that year, 12 times the next year and so on.  And, since we tend to keep clients for several years, this could well end up costing you tons of dollars.  And, try to avoid at all costs taking a fixed percentage off of everything in one fell swoop.  Start with the discount off the one time and so on.

So, incentives can be a bad thing, a good thing , or a great thing.  It’s all about how you structure it and your upfront understanding.  Lay your options out on paper and choose the one that does the least harm to YOU.  And, last of all, keep it simple.  Incentives are not like Chocolate.  Six are not better than two.  Sometimes we get so carried away at our cleverness we go way overboard.  So, Keep It Simple.  No more than two incentives to a customer please.

Now get out there and get ‘em, Tiger