What is a Consumer Premium?

A premium is an incentive but an incentive is not necessarily a premium. A premium is only used for consumers while an incentive can be used for anyone.

• An incentive is a positive reward that induces action or motivates effort.
• A premium uses a merchandise reward to encourage consumers to sample, purchase or remain loyal to a brand or service.

Typical Incentive Programs

• Retailers New Product Launch, Line Extension, Brand Awareness, Shelf Placement and Brand Training.
• Dealers & Distributors New Accounts, New Products, Line Extensions, Early Order Bonus and Volume Incentives.
• Internal & External Sales Increase Sales, New Accounts, Lead Generation, Increase Volume, Account Retention and Product Training. 

Typical Consumer Premiums 

• Account Opener Given to customers as a reward or thank you for opening an account.
• Container Premium A product container, which when empty, may be used as a container for other items. These premiums are usually partially or completely self-liquidating since the consumer pays for the container.
• Contest A competition based on skill, in which prizes are offered. A game in which chance is eliminated. Winners are chosen according to predetermined criteria or skills, such as writing the best essay or reaching a sales goal.
• Continuity Program An offer of products over time. A program designed to offer an incentive to an individual that encourages her or him to return to do additional business. Types of continuity programs include frequent flyer mileage, casino point program, etc.
• In-Pack, On-Pack, Near-Pack Offers A premium offered inside or outside a product package. Merchandise that is offered free with other merchandise. Frequently found in supermarkets.
• Loyalty Program A program that is designed to reward customers or consumers for specifically designed performance. This could be a frequency-based program like hotel or airline programs; referral programs like “Friends & Family,” or any number of programs designed to create long term advocacy for a brand or company.
• Referral Premium A premium offered to customers for helping sell a product or service to friends or associates.
• Sweepstakes A promotion that awards prizes to winners who are determined by chance. A game in which consideration has been eliminated.