171 questions answered

64. What is the financial effect of offering an incentive?

Victor Ross, former chairman of Reader's Digest Europe said that in his experience relevant incentives have never failed.

The cost of the incentive is more than made up as a result of the increased number of units sold - which in itself may lead to economies of manufacturing scale.

In one example the combined result of a sweepstake and a price reduction increased sales by 37.5%, with revenue increasing almost pro-rata.