Creating online incentive programs is definitely a smart move for companies like Tridel, argues Nancy Smith, president of Toronto-based NextMedia. As the Web grows ever more overpopulated, sites need a point of distinction to stand out. While the online sweepstakes is a major departure from Tridel's traditional business, the initiative has more than paid for itself, Bodnarchuk says. Indeed, within the first few hours alone, the developer added more to its database than it had offline over the previous two years. Net Results is now planning to develop similar promotions in partnership with an automotive manufacturer and a major travel agency.
Online incentives offer a number of advantages, proponents say.
They are, for example, quite inexpensive when compared to offline programs - and they can generate very high response rates. There are, however, certain drawbacks as well. Some companies are reluctant to mount such programs because the cost of the rewards can eat into profits. And, since these programs generally involve the collection of personal information from consumers, privacy concerns may also be an issue. Nail, for his part, says that online incentive programs do indeed generate a great deal of customer information - but the quality of the customer information tends to be somewhat lower.