What is your thought on this strategy?
When a customer makes a purchase, I ask him/her to share a custom post (their own photo and review) on their Instagram. If they share the post and their post hits a certain number of likes/views (say 10), I will give them X% off discount code. Their post should tag my store's Instagram. I will verify their post by asking them to send a screenshot.
1. Are customers willing to do so, in exchange for a discount?
2. Does such a strategy increase the store's sales and/or brand awareness?
Please share your experience if anyone has done a similar strategy.
You can try that out as you are not risking anything unless you are forcing your customers to do it.
And it would be more valid to ask the customer for a review after they have received the product, as you have mentioned they need to create a custom post, and a post with your product will generate more leads.
It also depends on what kind of product you are selling. I have seen a Protein supplement store with a similar strategy, which worked well for them. They asked their customers to upload an unboxing video for discounts.
I've been doing this with my store as well and it worked perfectly! About 5-10% of my customers made an Instagram Story. Even though it's great to get a lot of Instagram Shoutouts it definitely is a lot of work.
A friend of mine who has a small Team of Shopify App Devs developed an App that should suit your needs pretty good!
You can offer a cashback to your customers for an Instagram Shoutout in return. The Customer activates the Cashback on the product or Thank-You Page, gets an E-Mail, creates the Story as soon as the package arrived and the cashback will be refunded automatically through the app and the Shopify Payment System. I've been using this app since they launched it two weeks ago and it works amazing!
Check it out - it might help you to automate the process ;D https://apps.shopify.com/brandadvocates/
PS: I've heard that a couple more incentives besides cashback are in development