A new customer lands on your site. They’ve seen your ad, read a few reviews, and clicked through a promo link. They browse, add something to their cart, then disappear. No error message, no technical issue. Just another drop-off, another near-conversion lost somewhere between curiosity and commitment. The funnel works, the interest is there, but something subtle blocks the final step. That something is often conversion decay, and it’s costing more than you think.
Challenges show up throughout the customer journey. At the top of the funnel, it’s hesitation – a click, or an action left incomplete. In the middle, it’s cart abandonment or reluctance to commit. Downstream, it’s disengagement – customers who don’t return or don’t refer. At every stage, conversion decay slows growth and adds cost.
Addressing pain points takes more than fine-tuning messages or optimizing layouts. More marketers are turning to reward-based promotions like gift cards or promotional balances to encourage action. These tools, when used wisely, give customers something useful right away, helping them take the next step with less hesitation.
Motivating Early Action with Reward-Based Promotions
Getting consumer attention is only half the job; driving action is the other. Whether it’s signing up for a service, participating in a product demo, or referring a friend, consumers often need a reason to cross the threshold from interest to engagement.
Reward-based promotions work well in these moments to spark action. A $10 reward for trying out a product or $20 for referring a friend can be enough to prompt someone to take the first step. These kinds of incentives create interest and deliver measurable results. Research from Blackhawk Network (BHN) of more than 700 business executives found that the companies using reward-based promotions reported a 14% better marketing conversion rate and 16% higher return on marketing investment compared to traditional discounts.
Incentives like these create perceived value, which is harder to commoditize and more likely to be remembered.
Making Checkout Easier with Integrated Stored Value Options
Despite careful funnel design, checkout remains a frequent drop-off point. Many consumers pause, reconsider or abandon due to uncertainty around total cost, payment method security or second thoughts. Even milliseconds of delay can affect completion rates.
Enabling customers to easily use their rewards and stored value (i.e., loyalty points, leftover prepaid balances) at checkout through APIs or digital wallets provides a fast, familiar way to complete a purchase.
This is especially relevant in today’s economic climate. According to McKinsey, 79% of consumers are adjusting their spending not only by buying less or choosing lower-cost options, but by seeking deals almost every time they shop. Nearly half also say they’re planning to delay purchases in the near future. For these shoppers, a personalized reward can make the difference, helping turn hesitation into action.
Reengaging Customers with Timely Incentives
Email marketing remains a critical part of the funnel, but when inboxes are crowded and retargeting ads blur together, outreach is easily overlooked. Reaching out to lapsed customers with more of the same is unlikely to generate results.
A targeted incentive (“We miss you! Here’s $15 to come back”) can provide just enough reason to reconnect. It acknowledges the customer’s past value while lowering the threshold to try again. In fact, research from BHN found that companies using reward-based promotions experienced 36% shorter sales cycles compared to traditional discounting.
Building Loyalty Through Everyday Actions
Loyalty programs are another area where conversion decay can quietly develop. Many programs still focus on long-term points accumulation, but today’s consumers are increasingly responsive to more immediate, frequent reinforcement. A reward for a single completed purchase. An incentive for leaving a review. A credit for bringing someone new to the brand.
When these actions are relevant and easy to complete, they tend to stick. Over time, they help build stronger customer habits – and those habits can scale. Companies that consistently use reward-based promotions to recognize and reinforce these actions report up to a 60% annual improvement in customer satisfaction scores, highlighting the value of timely, meaningful engagement. With research showing that 84% of consumers trust online reviews as much as personal recommendations, and referred customers can generate up to 57% more new business, it’s clear that creating meaningful experiences pays off. Encouraging these behaviors with the right incentives is a reliable way to support growth.
Smaller, more frequent rewards can serve as the engine for this kind of loyalty loop. They don’t just say “thank you”; they give people a reason to keep coming back.
Applying Incentives Across the Funnel
Pain points along the marketing funnel aren’t new, and aren’t going away. But in a tighter economy with more choice and less patience, removing conversion decay can no longer rely on user experience alone. Marketers need ways to create momentum by rewarding attention, easing decision-making, and reinforcing loyalty in real time.
Reward-based promotions are one of the few tools that can do all of this across the funnel. They don’t replace brand storytelling or campaign strategy, but they add the behavioral nudge that turns intent into action and action into habit.
