brandcentric blog

I’ll come right out and say that I am an avid supporter of points-based rewards programs for CPG brands.  If planned and executed properly, rewards program can reach your most valuable consumers and measurably drive incremental volume.  At SoftCoin, we designed and implemented a number of highly successful rewards programs for Welch’s, NASCAR, Nestle, DPSG, P&G and others.  These programs were engaging, reached a mass market audience, and were rich with data and insights.

But for any CPG marketer pondering a points program, there are three things you’ll want to make sure you really get right: optimizing purchase validation, assembling a solid rewards catalog and mining the database.

The most scalable method to validate purchase is via secure, on-pack alphanumeric codes.  Sure, there is an up-front capital investment in equipment to apply the codes (~$25k to $100k) and there will likely be a short-term disruption to the production line, but this is really the way to do it.  The MyCokeRewards program has been using secure on-pack codes for 3+ years now, so the business case exists.  Other methods include tracking purchases through a store club card (doesn’t scale beyond that one retailer) or via credit card data (bad if you are strong in C-store distribution given the bias toward cash transactions).  And whatever you do, don’t digress with mail-in UPC code redemption.

The rewards catalog must be relevant and compelling to get your best consumers excited about participating.  There should be a mix of digital asset rewards (music, special content) and some cool aspirational prizes.  There should also be enough redemption opportunities to keep consumers engaged, without breaking the bank so to speak.  NASCAR offered a highly coveted “pit crew captain for a day” reward that money simply can’t buy along with a number of other lower level digital assets.  Talk about resonating with a core audience and really driving consumption.

Finally, solid analytics and segmentation are essential to getting the most out of these programs and driving the right behaviors.   Big CPG points programs can easily attract 2 million+ unique / authenticated consumers, so expect to see a broad array of behaviors.  A core set of heavy users (as measured by code entries and/or self-reported survey response), will sit alongside a  long tail of single code entry consumers.  Developing the right analytical framework to reward heavy consumers for their loyalty and encourage casual consumers to buy more is essential.  Brandweek recently highlighted that loyalty program participants are 70% more likely to actively recommend a product, so segmenting and supporting the brand champions is key.

Web-based loyalty programs are excellent vehicles for CPG brands to drive, measure and reward consumer behavior.  If designed properly, these programs can deliver profitable results.  Just pay attention to these three key areas before moving too far down the path of execution.

This story hits home for me on many fronts:  At SoftCoin, we executed multiple interactive promotions for the Dr Pepper brand over the course of several years.  Dr Pepper Snapple Group has a great group of folks with a lot of passion for their business.  They embrace interactive marketing in a big way.  DPSG is also a DemandTec customer.  And I happen to really like GN’R (my high school rock band covered a few of their tunes!)

This story is a painful, yet important reminder about the power of viral marketing.  Long story short, DPSG ran a wildly attractive, time-bound consumer offer for a free bottle of Dr Pepper due to GN’R releasing their new album, Chinese Democracy.  The registration site apparently couldn’t handle the rush and lots of consumers became upset.  Guns N’ Roses is now threatening a lawsuit against DPSG, arguing that this misstep has damaged the release of their new album.  We’ll see how this sorts out in the coming weeks.

I can’t speculate why the server crashed, or what could have been done differently.   But this saga underscores just how powerful the groundswell of consumers can be with an attractive promotional offer.  Social networks can compress campaign awareness from days to minutes.  Literally overnight, a campaign can “go viral” and take on a life of its own.  Use this reality to your advantage, but wherever possible plan your interactive for massive scale.