There’s a fascinating article titled “The Dawn of the Relationship Era in Marketing” that recently appeared in AdAge magazine. It’s written by David Rogers and Bob Garfield, the latter the same guy who caused a stir a few years ago with the essay “The Chaos Scenario” which (semi-correctly) predicted “the end of advertising as we know it”.

This piece isn’t quite so controversial, but it does point out that the role of marketing in the selling equation is changing. The authors posit that we’re witnessing the end of  “the Consumer Era” and are now moving into “the Relationship Era”.

The Relationship Era is based around the idea that companies that succeed in the future will do so because they’ve made some sort of human connection with their customer base. The belief is that in the Relationship Era, the big winners will be companies that people trust because they have “solid core values” and “transparent and honest practices“.

These companies will spend little on advertising—because they won’t need it. They’ve made a personal connection with a core group of customers who trust them implicitly, because they’ve backed up their core values with actions. They can then rely on these loyal customers to spread the word about their products and services and attract new customers. It almost seems the logical result that comes from a well executed corporate social responsibility policy.

The authors believe these brand-fan customers will: “…share your links and retweet you on Twitter and post a photo of themselves with your product on Facebook and like you on Facebook and generate all these network conversations, which go back to the top of the funnel and influence other customers in your network at their own stage of awareness, consideration, preference or action.”

So how do you get to be one of these beloved companies who people are tweeting and posting about? It starts with a purpose according to Rogers and Garfield. “You have to explain to all comers why you’re in business.” Among the companies identified as successfully “explaining” themselves and their values are Apple, Whole Foods and Trader Joe’s.

One prime example that’s cited is outdoors outfitter Patagonia who for years has had a purpose that resonates with its customers: Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis. The company then backs up this mantra with real-world actions, donating 1% of its gross sales to environmental causes, promoting environmental sustainability in every aspect of its operations and providing progressive workplace policies like paternity leave and paid sabbaticals.

Another company identified as a having authentic purpose: Krispy Kreme. After a rough start to the decade, in 2009 a new management team went searching for the company’s raison d’etre and came up with: “Touching and enhancing people’s lives through the joy that is Krispy Kreme. Management then “decreed that the joy ethic inform every interaction at every level of the business.”

My take: I can buy into the Relationship Era—but only to a point.

It’s hard to argue with companies like Trader Joe’s and Patagonia, that have carved out their own unique niche in the marketplace with little to no advertising, but lots of positive word-of-mouth and social networking buzz. After all, what’s not to like about free advertising? But the fact is, these kind of companies are few and far between.

Put under a microscope, I’d say the majority of US companies would be unable to pass the “authenticity” sniff test. Even successful companies often aren’t nimble or visionary enough to coalesce around a single purpose and execute it in the marketplace. It’s just not in their DNA. For instance, I wonder if every Krispy Kreme franchise has really been able to add “the joy ethic” to every business transaction.

The good news: companies that lack a specific purpose their customers can rally around, have other ways to grow their business and increase brand loyalty. This includes doing all they can to improve the customer experience from pre-sale to post-sale. It also means enhancing customer engagement, so that customers are communicated with in personal, relevant ways across a variety of touch points.

What do you think—is the Relationship Era upon us?

Loyalty Truth was treated with a big shout-out from Barry Kirk at Loyalty Expo in Orlando this week. Barry works with Maritz and has been quietly leading the way into the field of game theory and how “gamification” can be incorporated into customer strategies to increase engagement and build enduring brand loyalty.

I have great respect for Barry’s work and therefore was humbled by his recommendation of Loyalty Truth as a leading resource for marketers seeking independent and unbiased insight into this evolving space.  After three years at the keyboard the acknowledgment was appreciated, and caused me to revisit just who we serve with this blog as well as reaffirm the directions in which we are heading.

Our intention is that three groups will find value reading Loyalty Truth on a regular basis:

1. Brands interested in customer loyalty and lifecycle marketing
2. The supplier community which serves these brands
3. Financial interests seeking to decipher the entire landscape in support of investment decisions

You’ll notice that consumers, the focus of all our work, are not mentioned here. Though consumers would find some interesting program reviews and commentary here, we write in the marketer’s lexicon and I think it better to not mix the two. Check out this old post for more explanation on this point. Consumers are far from forgotten by our staff and in the very near term, we will introduce a destination site specifically designed for consumers seeking to make the most of their participation in today’s spectrum of loyalty programs.

Concerning future directions:

1. Consumer Behavior: We plan to continue on the course charted about 4 years ago when we shared our studies on Generation Y (the Millennials) and how we can create loyalty across this demographic segment. The difference is that we have expanded the conversation to recognize that the Millennials are part of a larger group, referred to as Consumer 2.0, estimated to be over 50% of the U.S. population at this time.
2. Everything Social: My Mom encouraged me to be social as a young person, but I never knew it would have these implications in business! Social Loyalty, Social CRM, Social Shopping, Social Location Marketing, Social “fill in the blank”. You get the idea. As the firehose of new ideas continues to spew forth, we are faced with one of the biggest challenges to separate wheat and chaff in recent memory. Keep reading here and we hope you find clarity and direction.
3. Global: As the brands, suppliers and investors we serve expand their interests and footprints to a global market, the business resources they seek are evolving. As a co-founder of the Customer Strategy Network (CSN), we have direct access into every developed loyalty market in the world and many that are emerging. Anyone can do desktop research, but few have the ability to speak directly to people living and breathing data-driven marketing in diverse markets. We’re not bragging, just feeling privileged to be part of this group that will continue to grow and expand. Among other things, CSN has a new website on the way which will underscore our collective direction.

You’ve got to focus to succeed in any task. The picture of the US Postal cycling team here reminds me of the focus needed to win in sport. We plan to hone our focus here at Loyalty Truth and bring you more value over time.

Let us know how we’re doing from time to time. Leave a comment, send me an email, or just give me a call.

Thanks.

Josh Stevens is the Groupawn, striving to live off Groupons for one year. If he’s successful, Groupon gains additional publicity in extreme fashion, all for the cost of $100,000 – the carrot in front of Josh until May 2011.

I’m neither a “WegPawn” or eligible for any incentive from Wegman’s, but I am considering moving in for the summer.

The Western New York grocery chain is ranked 28th largest in the US and # 3 on Fortune magazine’s list of “100 Best Companies to Work For” in 2010. In real terms they combine the best that Starbucks, Barnes & Noble, Panera Bread, and a host of QSR restaurants have to offer and provide a learning platform for any retailer hoping to drive brand loyalty and customer engagement.

And, Wegman’s seems to be creating its momentum absent of the typical array of grocery rewards programs used by competitors.

The interesting thing from a In the 2010 United States of America, there is an expanding group of people working independently and in collaborative teams to deliver high value at reasonable cost to Corporate America across a spectrum of service offers. I co-founded the Customer Strategy Network with this in mind and believe these consciously organized networks can be the tip of spear to drive innovation and efficiency in our economy over the next ten years. Chris Brogan shares an interesting post today on the meaning of independence in today’s business world which you might want to read to stimulate more thought on this subject.

With or without permanent office space, there is always the occasional need to get work done on the fly – whether on the road or in between business meetings. I don’t think Coworking was part of Wegman’s original business plan, but they offer an ideal platform for people on the move and in the process create customer loyalty for their core business.

Having just toured the East Coast of the US, I’ve had the opportunity to experience the merchandising approach of several grocery chains including Publix, Trader Joe’s, Whole Foods, Harris Teeter, and a few other smaller players. In my opinion, Wegman’s sits above them all in creating grocery loyalty, with beautifully organized stores, reasonable prices, a fantastic array of prepared foods, and a comfortable coffee shop and dining loft where customers can relax over a meal or pound away on their laptops using the free wireless Internet.

Wegman’s is not treating customer loyalty as a fad and as a result has been on the “Best Companies to Work For” list every year since it began in 1998. The company’s mission statement outlines three beliefs that define their viewpoint on what it takes to build customer loyalty and increase intrinsic business value over time. Some excerpts:

• “We believe that good people, working toward a common goal, can accomplish anything they set out to do”
• “We set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind”
• “We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people we pledge continuous improvement, and we make the commitment: “Every Day You Get Our Best”"

And the absence of rewards programs?

Wegman’s discontinued a punch-card style Coffee Club in 2007 (but still offers refills for $.50) and has de-emphasized its Shoppers Club, at least in practice. Jo Natale, Director of Media Relations, shared that Shoppers Club “is still very much active”, but “since we moved to consistent, low prices several years ago (in place of short-term sales), there are fewer discounts overall, because our prices don’t fluctuate as they once did”.

Am I a Wegman’s family member? No.

Is Wegman’s perfect? No.

Could Wegman’s be more creative in collecting and using customer data & reinvigorate a fading two-tier customer club? Yes.

Despite areas of potential improvement, is Wegman’s the best example I have seen of a grocery chain delivering on its brand promise & creating grocery loyalty through merchandising and store design? Yes!

Am I really moving in this summer? No, I really like my family and will save Wegman’s visits for those on-the-fly email check ups and when I want some really great food!

Josh Stevens is the Groupawn, striving to live off Groupons for one year. If he’s successful, Groupon gains additional publicity in extreme fashion, all for the cost of $100,000 – the carrot in front of Josh until May 2011.

I’m neither a “WegPawn” or eligible for any incentive from Wegman’s, but I am considering moving in for the summer.

The Western New York grocery chain is ranked 28th largest in the US and # 3 on Fortune magazine’s list of “100 Best Companies to Work For” in 2010. In real terms they combine the best that Starbucks, Barnes & Noble, Panera Bread, and a host of QSR restaurants have to offer and provide a learning platform for any retailer hoping to drive brand loyalty and customer engagement.

And, Wegman’s seems to be creating its momentum absent of the typical array of grocery rewards programs used by competitors.

The interesting thing from a In the 2010 United States of America, there is an expanding group of people working independently and in collaborative teams to deliver high value at reasonable cost to Corporate America across a spectrum of service offers. I co-founded the Customer Strategy Network with this in mind and believe these consciously organized networks can be the tip of spear to drive innovation and efficiency in our economy over the next ten years. Chris Brogan shares an interesting post today on the meaning of independence in today’s business world which you might want to read to stimulate more thought on this subject.

With or without permanent office space, there is always the occasional need to get work done on the fly – whether on the road or in between business meetings. I don’t think Coworking was part of Wegman’s original business plan, but they offer an ideal platform for people on the move and in the process create customer loyalty for their core business.

Having just toured the East Coast of the US, I’ve had the opportunity to experience the merchandising approach of several grocery chains including Publix, Trader Joe’s, Whole Foods, Harris Teeter, and a few other smaller players. In my opinion, Wegman’s sits above them all in creating grocery loyalty, with beautifully organized stores, reasonable prices, a fantastic array of prepared foods, and a comfortable coffee shop and dining loft where customers can relax over a meal or pound away on their laptops using the free wireless Internet.

Wegman’s is not treating customer loyalty as a fad and as a result has been on the “Best Companies to Work For” list every year since it began in 1998. The company’s mission statement outlines three beliefs that define their viewpoint on what it takes to build customer loyalty and increase intrinsic business value over time. Some excerpts:

• “We believe that good people, working toward a common goal, can accomplish anything they set out to do”
• “We set our goal to be the very best at serving the needs of our customers. Every action we take should be made with this in mind”
• “We also believe that we can achieve our goal only if we fulfill the needs of our own people. To our customers and our people we pledge continuous improvement, and we make the commitment: “Every Day You Get Our Best”"

And the absence of rewards programs?

Wegman’s discontinued a punch-card style Coffee Club in 2007 (but still offers refills for $.50) and has de-emphasized its Shoppers Club, at least in practice. Jo Natale, Director of Media Relations, shared that Shoppers Club “is still very much active”, but “since we moved to consistent, low prices several years ago (in place of short-term sales), there are fewer discounts overall, because our prices don’t fluctuate as they once did”.

Am I a Wegman’s family member? No.

Is Wegman’s perfect? No.

Could Wegman’s be more creative in collecting and using customer data & reinvigorate a fading two-tier customer club? Yes.

Despite areas of potential improvement, is Wegman’s the best example I have seen of a grocery chain delivering on its brand promise & creating grocery loyalty through merchandising and store design? Yes!

Am I really moving in this summer? No, I really like my family and will save Wegman’s visits for those on-the-fly email check ups and when I want some really great food!

In case you’ve been going to sleep early these days and you’ve been missing all the buzz on both Facebook and Twitter about what’s going on in the late night TV world,  NBC “Promoted” Conan O’Brien to the big chair of late night, The Tonight Show.  But for some reason, they wanted to keep Jay Leno in the NBC fold and put him in a prime time 10 PM slot before the local news.  The reasoning for this is very simple.  Producing one show with one star is 100 times cheaper than producing five quality prime-time shows with multiple casts, crews, directors and teamsters for five 10 PM prime time slots.

After a very short run, a simple domino effect is in play.  Leno “failed” in the 10PM time slot which led to lower ratings for the local news and lower ratings for The Tonight Show. NBC Failed to provide good shows before the local news. And now, it seems that rather than accept responsibility, the NBC execs have thrown the blame on Conan.

Was this Conan’s fault?  Maybe a little.  He didn’t ask about the prime-time line up and his lawyers didn’t go through his contract with a fine tooth comb.  Conan has a pretty iron clad contract BUT they missed the detail of what time the new Tonight Show was supposed to start.

“I believe that delaying The Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The Tonight Show at 12:05 simply isn’t the Tonight Show.”  - Conan O’Brien

“I left NBC prime-time the same way I found it: a complete disaster.” – Jay Leno

Considering what happened when Johnny Carson left the Tonight Show and the fallout between Letterman and Leno and now with the flip flop between Leno and Conan and back to Leno again, NBC is losing trust within the industry and Loyalty with its viewers.  And if NBC screws over Conan after what they did to Letterman the last go around, who’s going to want replace Leno AGAIN?  If Leno failed in a prime time slot why is NBC giving him a 30 min show at 11:35 going to help the Tonight Show or NBC?  What’s the point?  Carson didn’t do anything to compete directly with the Tonight Show when he left.  Why let Leno compete at all?

I'm with Coco

This can either go down as the biggest disaster in TV history; bigger than when NBC passed Letterman over for the Tonight Show gig, bigger than when NBC Let Star Trek the original series die in 60s, or it’s a fiendishly brilliant viral marketing plan to boost NBC’s lagging ratings (wishful thinking on my part, but we can hope right?).

Where is everyone’s Brand Loyalty?  Is it with NBC, Leno or Conan?  There’s no apparent popular effort to bring Leno back to the Tonight Show – but there is a whole lot of buzz on the Social Media web sites in support of Conan.  Simply put, NBC would be stupid to let Conan go. He would most likely end up on either Fox, ABC or, even worse CBS, where he could team up with Letterman and later on replace him on his show.  Everyone in Late Night is getting a leg up except for Leno and NBC.  Needless to say, I’m with Coco.

Dean Bairaktaris – The Greatest Living American Dude: Evil Power Digger, SEO Consultant, Social Media Maverick, Web Developer and Elite Space Monkey in Fort Lauderdale, FL. Think Green.

In case you’ve been going to sleep early these days and you’ve been missing all the buzz on both Facebook and Twitter about what’s going on in the late night TV world,  NBC “Promoted” Conan O’Brien to the big chair of late night, The Tonight Show.  But for some reason, they wanted to keep Jay Leno in the NBC fold and put him in a prime time 10 PM slot before the local news.  The reasoning for this is very simple.  Producing one show with one star is 100 times cheaper than producing five quality prime-time shows with multiple casts, crews, directors and teamsters for five 10 PM prime time slots.

After a very short run, a simple domino effect is in play.  Leno “failed” in the 10PM time slot which led to lower ratings for the local news and lower ratings for The Tonight Show. NBC Failed to provide good shows before the local news. And now, it seems that rather than accept responsibility, the NBC execs have thrown the blame on Conan.

Was this Conan’s fault?  Maybe a little.  He didn’t ask about the prime-time line up and his lawyers didn’t go through his contract with a fine tooth comb.  Conan has a pretty iron clad contract BUT they missed the detail of what time the new Tonight Show was supposed to start.

“I believe that delaying The Tonight Show into the next day to accommodate another comedy program will seriously damage what I consider to be the greatest franchise in the history of broadcasting. The Tonight Show at 12:05 simply isn’t the Tonight Show.”  - Conan O’Brien

“I left NBC prime-time the same way I found it: a complete disaster.” – Jay Leno

Considering what happened when Johnny Carson left the Tonight Show and the fallout between Letterman and Leno and now with the flip flop between Leno and Conan and back to Leno again, NBC is losing trust within the industry and Loyalty with its viewers.  And if NBC screws over Conan after what they did to Letterman the last go around, who’s going to want replace Leno AGAIN?  If Leno failed in a prime time slot why is NBC giving him a 30 min show at 11:35 going to help the Tonight Show or NBC?  What’s the point?  Carson didn’t do anything to compete directly with the Tonight Show when he left.  Why let Leno compete at all?

I'm with Coco

This can either go down as the biggest disaster in TV history; bigger than when NBC passed Letterman over for the Tonight Show gig, bigger than when NBC Let Star Trek the original series die in 60s, or it’s a fiendishly brilliant viral marketing plan to boost NBC’s lagging ratings (wishful thinking on my part, but we can hope right?).

Where is everyone’s Brand Loyalty?  Is it with NBC, Leno or Conan?  There’s no apparent popular effort to bring Leno back to the Tonight Show – but there is a whole lot of buzz on the Social Media web sites in support of Conan.  Simply put, NBC would be stupid to let Conan go. He would most likely end up on either Fox, ABC or, even worse CBS, where he could team up with Letterman and later on replace him on his show.  Everyone in Late Night is getting a leg up except for Leno and NBC.  Needless to say, I’m with Coco.

Dean Bairaktaris – The Greatest Living American Dude: Evil Power Digger, SEO Consultant, Social Media Maverick, Web Developer and Elite Space Monkey in Fort Lauderdale, FL. Think Green.

One of the blogs I enjoy reading is written by Chris Brogan. He’s got some interesting takes on social media and a huge following.

Today he stepped in the Loyalty Marketing sandbox with his post The Myth of Brand Loyalty. I won’t recount the story here and encourage you to read it as well as take in the comment stream which follows. There are a few good ones and you can read my take as well in which I reference how Airlines Take Flight Without Data.

To be fair, the airlines and Apple (Chris’ example) aren’t alone. We see it all the time….companies that have accumulated tremendous stores of data and are not using it to market efficiently and effectively. Or, as I witnessed this week in client meetings, there are banks with reams of customer satisfaction research, customer profile information, and transaction history that have studied it all, developed recommendations, but inexplicably have not put into action a measurable marketing campaign based on this information.

It’s not about capacity, it’s all about willpower. Corporate commitment to Customer Loyalty from the top down is needed for success and, where I can identify that commitment, I would personally invest in the related equity issues. These will be the winners in the market over the next 10 years.

Speedbumps are everywhere.

They’re in my neighborhood, at the mall and also on the internet.  If you’re in new environs, speedbumps can by definition be mileposts of learning. Ever fly down the street in an unfamiliar area only to discover speedbumps the hard way? It’s not pleasant for you or your passengers and can do damage to your vehicle depending on your velocity at impact.

Web 1.0 had its share of speedbumps, coming in the form of viruses, phishing schemes, and deals that seemed too good to be true from deposed Nigerian princes. Web 2.0 has a different set of annoyances and the more comfortable we get with building virtual networks and storing data in the cloud, the more vulnerable we will be to connectivity outages.

My modest goal in joining the social media landrush is twofold:

• Understand how to best incorporate the social media tool-set to communicate with customer loyalty program and frequent shopping club members
• Reach the Millennial generation in an effective way to build brand loyalty

If you are paying attention to the space, you will understand when I say that there are an inordinate number of social media “experts” and others who claim to be able to build brand awareness and increase customer engagement, all leading to greater customer loyalty for profit. If you’re not involved but observing from the sidelines, trust me on this one – they are ubiquitous to say the least.

In my book the “experts” you want to associate yourself with, and trust your future online loyalty marketing efforts to, are the ones who have been playing the game, taking some lumps, and learning by doing. I’ve been at it long enough to hit a few bumps and thought it was time to share a short list of cautions to consider as you build a corporate or personal social media marketing strategy:

• Concerning your blog, Facebook, and Twitter, add value with everything you post. The criticism that Twitter is a waste of time because all people do is update about their last meal shouldn’t bother you because you won’t be posting this sort of garbage (will you?).

• Remember that everything digital has a life similar to a cockroach, i.e. longer than most of us will live. Be ever so cautious about posting anything that you might regret later. My SM muse told me at the outset to write,read, proofread, and do it again, before pressing the update button. You’ll sleep better and won’t get fired when your legal department reads your Facebook page.

• Reveal personal information with the same care you take with your wallet. Would you let strangers look through your billfold while checking out at Walmart? Didn’t think so. Why then would you post highly personal information online in the interest of being more “human”? There are others ways to accomplish this goal.

• Speaking of being human, do attempt to create conversations, don’t just blast information at the ether and expect people to respond positively. If you equate SM with digital public relations, you are missing out on better tools for that purpose, and are inviting attrition from your fans, followers and customers.

• Balance openness and immediacy with common sense. You are fully within your rights to moderate comments on any blog you are responsible for, and the practice is highly sensible. You are not obligated to approve comments that have only tangential relationship to the topic or are little more than personal rants.

This list is equally applicable if you are building a personal brand, establishing yourself as a subject matter expert for your firm, or are the corporate officer responsible for setting social media policy across your associate base.

Some brands have adopted the viewpoint that they will hold-fire on their social media marketing strategy until they have it all figured out. Surely this approach will mean that they will have less scars than yours truly, but I’ll also be willing to be that they will be so late to the game that they will wish they had started earlier.

Be cautious, use common sense, and learn from others. If you do this, you’ll achieve your objectives with social media and also be able to recognize a true expert when you see one.

Deregulation of the US airline industry in 1978 was intended to create a competitive environment that would benefit the flying public and bring profitability to the airlines. With a number of bull and bear cycles under the belt, 2009 finds the airlines continuing to struggle for profits, and consumers once again being punished just for showing up at the gate.

The airlines pioneered the loyalty marketing business, linking customer data, profitability measures, and the reservation system to change the way all consumer facing companies viewed their customer policies. Since American’s AAdvantage program launched in 1981, the airlines have awarded zillions of miles to loyal frequent flyers and have collected untold terabytes of customer data.

It is astounding to see that the data collected remains largely under-utilized. My latest mailing from American congratulated me on my status with them and included some offers marked “specially for you”. I was disappointed to see that the offers had no connection to my preferences and looked like this:

• Offer to purchase additional frequent flyer miles
• Bose QuietComfort 2 headphones offer
• Directv – switch and receive 10,000 miles
• A credit card offer (actually two different ones)
• A sweepstakes offer in connection with MyCokeRewards.com

Not only are the airlines missing a significant opportunity to engage their best customers based on data they already possess, they are eroding their value proposition by adding fees to multiple aspects of the in-flight experience as well as their frequent flyer programs.

A struggling industry should leverage the lowest cost assets they own and use this low-hanging fruit to generate profitability as well as engender brand loyalty. Why not take steps to use the valuable data they have gathered over time.

The favorite subject for most humans to talk about is “me”. Flyers are waiting to spill the beans on their preferences and all the airlines have to do is ask.

Watching the Vice Presidential debates, there was a lot of talk from both sides about bolstering the hopes and fortunes of the middle class. This struck a chord as I reflected on my shopping experiences that same day and realized that retail marketers rely on several promotional tactics that, in our opinion, aren’t truly designed with the customer in mind.

Extended Warranty Protection Plans, Same-As-Cash deals, and Mail-in rebates are all on the suspect list but Mail-In Rebates are the focus of this post. Designed originally as a deferred discount to distract consumer eyes from the “real” price of the product, mail-in rebates came into view years ago and continue to proliferate throughout retailing. Today, they have proliferated across product and category to the point where consumers can’t just rely on reading the “price” shown in big bold type, but need to look at the fine print to see what conditions apply to enjoy the stated price.

Two quick stories will have you nodding your head as they illustrate customer experience in mainstream retailing:

• Needing to replace a mobile handset for a family member, I called the “help” line to find out what deals were available. I was given the prices of specific phones that I was eligible to acquire and was told that a $75 early upgrade fee would apply. The phone we selected totaled up to $125. This price was in my brain when I walked into the wireless store only to learn that it was net of a $50 Mail-In rebate. End of story…..I paid $175 and walked out with a new handset and a rebate form to complete.
• My 19” computer monitor was on the fritz and I had no choice but to shop for a replacement. Prices for 22” monitors ranged from $179 – 295. When my frugal Irish eyes looked more closely at the $179 model, I noticed that the price was net of a $50 rebate. Next to it was a more attractive model with bigger brand name. Since the price was $249, I struggled with the wisdom of paying a higher price and not having to take my rebate “homework” with me. End of story……I am still shopping.

The attractiveness of Mail-In rebates for marketers is summed up in one word: breakage. The burden of cashing in on the rebate falls solely to the consumer. Completing the paperwork properly, including the right documentation, mailing before the expiration date, and spending additional money for delivery confirmation stacks up in favor of the retailer. It is a game that can be played successfully by consumers, yet many of us don’t have the discipline to follow through properly. The fact that Mail-In rebates continue to be a popular pricing tactic is testimony that breakage does benefit the retailer.

From what I have learned about Millennial (Generation Y) purchasing behavior, I wonder if breakage rates will go sky-high across this 80 Million person group. Maybe the only hope for this upcoming generation is out-sourcing. I’ve seen pet-sitters and dog-waste services advertised in the local paper along with cleaning and yard services. Maybe bookkeepers need to add rebate processing to their list of services.

Responsibility lies on both sides of the transaction and consumers need to be educated and disciplined when making purchase decisions. Marketers might consider this Loyalty Truth: whether this is the type of relationship they wish to promote with their customers over the long term. As they continue to employ tactics that force consumers to be detail driven in order protect their interests, the chances of building enduring brand loyalty will be diminished with each transaction……Bill Hanifin