As faithful Loyalty Truth readers know, my recreational drink of choice is beer. But every once in a while, my wife and I will entertain friends over a pitcher of Margaritas on the rocks. (Salt, please.)

Many years ago a friend who knows about these things told me the best tequila for the money was Sauza Gold. Looks and tastes just like Jose Cuervo Gold—my friend says better—for a couple of bucks cheaper.

So a few weeks ago, with my supply of Sauza Gold running low, I picked up a bottle at my friendly neighborhood liquor store. Hanging from the bottle’s neck was a promo tag pitching a $2.50 refund if I filled out the form and mailed in my receipt.

Now for me, a $2.50 rebate is right at the threshold of “is this really worth my time and a 40 cent stamp?”, but I eventually mailed it in. I figured the $2.50 minus postage was the equivalent of a healthy tequila shot—so why not take Sauza up on their generous offer of a free drink?

Only I didn’t get a rebate check. Just a postcard letting me know I wouldn’t be getting a rebate because I used a PO Box as my home address—which I have to do, as my quaint little town has no home mail delivery.

The postcard listed a rewards Web site where I could check on my refund, but after entering my name and address into an online form, I got a message back saying they couldn’t identify me. I looked for another way to contact them—but there was none.

Next stop: the Sauza Web site, where there are some nice drink recipes—but again, no link or mention of how to contact anyone at the company. Unless I want to “friend” Sauza at Facebook, which is an additional step I didn’t want to take.

So here lies my conundrum: My relationship with Sauza has always been a simple one. I give them $20 and change, they give me a quality bottle of tequila in return. I would have been happy continuing this relationship for years to come.

Only, they just blew it. Through a promotional campaign that obviously had some bugs in the execution, they found a way to offer me bad customer service—when customer service didn’t even have to be part of the equation.

Suaza: as far as I’m concerned, you shouldn’t have run this promo in the first place, because the bottle of Jose Cuervo Gold sitting next to you on the shelf suddenly got more appealing. But there’s still time for you to make amends.

Like all good companies these days, you should have an ear to the social networking ground listening for chatter about your brand. Sauza, are you listening?

Amazon announced it is selling more Kindle books than hardcovers, the US Postal Service is in jeopardy, and Continental Airlines will begin allowing travelers to scan themselves on board flights. As change marches on, what other familiar aspects of our lives will join the milk-man in a mythical global retirement home?

Keep an eye on traditional points-based loyalty programs, because they just might be next.

Points programs have been around for decades because, as my friend Jim Ryan told me, “they work”. Jim, the former CEO of Carlson Marketing, knows this business cold and although we both agree that points-based loyalty currencies are an effective medium to change & measure consumer behavior, the companies which foot the bill for these programs are increasingly opting for something different.

I did a market scan recently and found a few examples of how Loyalty Marketing is being redefined:

• Ford ran its “Fiesta Movement” campaign (to be profiled soon in Loyalty Truth) over a year ago, recruiting 100 agents to drive a Ford Fiesta and document their experiences through written and video blogs. The results? Ford created over 11 Million social networking impressions, created a 37% awareness of the new car across Generation Y (Millennials), and enjoyed one of the best new car introduction campaigns in years.

• Tropicana launched Juicy Rewards, a hybrid of the on-carton coupon model which typically requires consumers to enter codes online till their fingers bleed in order to win something of value akin to a paper clip. The difference here? Tropicana has aligned itself with a strong portfolio of merchants offering discounts that equate to 5X the value of the product purchase price.

• Clorox launched CloroxConnects, a social site that serves three key audiences, consumers, partners, and employees. Better described as an Engagement Platform, Clorox encourages participation from each group and awards badges and recognition rewards based on proprietary game mechanics.

Don’t miss the subtlety of these new loyalty program formats. Each program has well defined business objectives, predictive analytics and financial modeling are used to refine audience targeting, and a loyalty processing platform is needed as the backbone to run the program in most cases.

In other words, the fundamentals to engage, interact with and retain customers remain consistent. The key difference is that instead of keeping score by awarding points, companies are moving towards scoring as much by social behaviors as transactional.

For the past 30 years, Loyalty programs have been designed by Boomers for Boomers. The influence of a digitally connected generation is more apparent than ever, and consumer engagement will only happen if you re-tool marketing strategies to embrace the Millennials and others who want more transparency and immediacy in their brand relationships.

Are you equipped to make these changes?

Growing up in Cleveland, Ohio, I got used to my home town being the butt of nightly jokes on national television. “On a clear day in Cleveland…you can see absolutely Nothing!” was a popular refrain from Johnny Carson. The “Mistake on the Lake”, the flaming Cuyahoga River, a mayor who skipped a Presidential visit to keep his bowling night – it all added up.

At the other end of Lake Erie is Buffalo, New York. No stranger to ridicule, the area has struggled economically while maintaining a fierce local charachter as the home of hard-working, value-preserving Americans.

Imagine the challenge of the local newspaper in this area. The Buffalo News not only operates in a tough advertising environment, but is battling what all newspapers are facing – extinction as consumers prefer to get their news and information from digital sources.

Imagine my surpise when I learned that the newspaper had established MyBuffalo.com and started Rack’em Up as an incentive program to drive participation in “Western New York’s Social Network“.

The program is simple, but effective. People are invited to enroll in order to participate and are then able to earn 50 points each for a variety of activities. Participants accumulating over 500 points per week are automatically entered into a random drawing to win one of three prizes.  The earning opportunity results from posting on a blog, starting a discussion forum topic, posting a video or photo or inviting friends to join MyBuffalo.com.

In a day where creativity and innovation is demanded for survival, I applaud the use of social networking by MyBuffalo.com to create reader engagement. I’m sure that subscriber retention and advertising rate support are goals of the program. It will be interesting to see evidence of success in reaching those two goals.

In the meantime, Let’s Go Buffalo!

Being a player in our new digital age is akin to being the catcher in a knife throwing act at the county fair. It’s exciting, and cool that you can keep up the pace, but will the end game work out in your favor?

Both games are fast paced and just a little dangerous. The pace of introduction of new web based applications, communities, and services never seems to let up and the merit badge of those “in the know” is expressed by their ability to dissect the latest phenom, master it, and then declare it nearly passé as they go on all night vigil waiting to coin the next great thing. The danger in playing is not physical, so you can relax on that count. The risk is that while we are chasing the rabbit in this blistering race, we can easily lose sight of why we are running so hard.

The rapid progression of Web 2.0 offerings MySpace, Facebook, You Tube, and Twitter are example enough. According to Business Week, the most well known social network in 2005 was Friendster. With multiple generations of social networking in play, it’s safe to say things have changed.

Marc Andreessen, of Mosaic and Netscape fame, is behind Ning, a platform that allows people to make up their own mini-MySpace. Speculation abounds that instead of one of the established social networking platforms dominating an industry consolidation, there may be a big bang in our digital future with the resulting fragmentation translating into everyone having their own micro-mini network.

While I do hear people asking questions about how this will play out, I don’t hear them asking the important question – what tangible benefits do I get from social networking and how much time do I have for it? In short, we should be looking for the drivers of desirable behaviors, rather than “twittering” about which glob of mud thrown against the wall will still be worth our time in two years.

For the majority of the connected population that still finds sleep useful, decisions will be made of how best to allocate our digital mind space. Life online still has competition with TV, music, movies, meals, work, and families. While it’s fun to have a profile on LinkedIn and pages on MySpace and Facebook, we will eventually make choices as to where we get the most benefit from time invested and pare down the number of engagements we maintain online.

Don’t misinterpret my take here. Social networking is an awesome concept and has benefits for its participants. I just find it interesting that the web started off with bulletin boards and forums and now envision that we could return full circle to an environment where people match up with others on increasingly granular subject matter. Where the commercial benefit resides is not yet clear, but so far it looks like the participants stand to receive greater benefit as they can short-cut rolodex networks and bring efficiency to their business and personal lives.

It may be that the next great thing will be found in the madness itself.

Just like Executive Book Summaries, which offers summaries of business books to save time and money for their subscribers, maybe a clearinghouse application that aggregates and filters multiple networked memberships will constitute the most hip home page that you can add to your browser.

Or, maybe it’s already out there and I just haven’t had the time to find it! >>> Bill Hanifin