All About Me? Not: How Some Online Reward Programs Belie Technology’s Promise


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Head: All About Me? Not: How Some Online Reward Programs Belie Technology’s Promise

Author: Howard Schneider, Metzner Schneider Associates

Apparently the “me generation” is over. At least where customer-centric online marketing is concerned.

Today’s targeted marketing strategies—empowered by easily obtained, inexpensively maintained customer data and enabled by internet technology—hold essentially two great promises. For the marketer, the ease and low cost of electronic media, which seemed revolutionary just a few years ago, have come to be seen as something of an entitlement. This is one promise that has been fulfilled. Surveys consistently show companies increasing their email marketing budgets for one simple reason: it’s cheap.

The great promise for consumers was that e-media would be interactive and customer focused; that in exchange for knowledge about “me,” marketers would deliver offers and information of personal relevance and value. But that promise has not been kept by many companies. I’m not just talking about fly-by-night spammers and scammers; many well-respected global brands are equally guilty. Interestingly, among the offenders are online loyalty programs whose very names trumpet the individual, the “me” who is the target: MyPoints and My Sony.

MyPoints is one of the survivors of the early Internet loyalty bubble. When the web was young, marketers quickly learned that control of this new channel was in the hands of the consumer more than any other media in history. Customers (so mobile they were once called “surfers”) had a world of possibilities online. With a few mouse clicks, shoppers could compare prices, products and values and switch from one merchant to another in seconds. Online marketers competed to build “sticky” web sites that would keep customers loyal.

Mistakenly, many tried to follow an inappropriate model: frequent flyer programs, the best-known sort of loyalty mechanism. Online programs such as MyPoints attempted to reward consumers with points for taking desired actions: clicking through to retailers, viewing email offers, making inquiries, purchasing online. But unlike frequent travel programs, which have an established and valuable currency (miles for free travel), the online programs were a force fit, and their currencies—MyPoints, e-Rewards, Gold Points, etc.—never caught on with customers.

Why not?

Well, first of all, the points were correctly perceived to be of little value. Unlike frequent flyer miles, most online points could be used only to “buy” discounts on a limited range of products. Consumers quickly realized that their local discount retailer offered better prices than those they could earn with their “loyalty points.” Given the lack of real value, most consumers could not spare the time and share-of-mind to pay attention to these reward programs.

Even more important, though, is that these programs often made a critical promise that they failed to keep. Programs like My Sony, MyPoints and others collect customer profile information, ostensibly so they can deliver information and offers specifically targeted to the individual consumers’ interests, lifestyle, household needs, lifecycle stage, purchase intentions and such. But in practice, these programs often have not been about “me” at all. Instead they became little more than the cheapest, easiest way for marketers to deliver undifferentiated mass market advertising. Email offers that were supposed to be targeted often turned out to be the equivalent of the newspaper insert or the co-op mailing package; a virtual, electronic “Val Pak.”

Instead of personalized, relevant, valuable offers, much too often these programs deliver spam, pure and simple.

By failing to use the knowledge consumers share with them, program operators and advertisers who use them show disrespect for their customers, prospects and “members” and undermine consumer confidence. Which means the programs that operate this way are not only a waste of money and effort for the misguided marketers; they could be counterproductive, potentially detracting from the equity enjoyed by great brands like Sony. Ironically, the key factor that minimizes the potential negative effects of these programs is that they deliver so little value, relatively few consumers pay attention.

Let me share a few examples of what these programs have been delivering to my emailbox:

  • MyPoints sent me an electronic birthday greeting on the right date, demonstrating its profile knowledge. The e-card contained a “birthday present” of five points and an invitation to click through to “an exclusive offer.” The offer? Introductory magazine subscriptions. The featured titles were an undifferentiated mishmash including Family Circle, RAZOR, Wine Enthusiast and Bowling Digest—none of which are of any particular interest to me.

  • In another recent email, MyPoints invited me to join My Sony. Check this out: I’ve been “specially invited” to join My Sony, so I can earn points from My Sony. And I’ll earn 20 MyPoints points if I join. This is getting to be self-parody: earning points for earning points. But there’s a much bigger problem from a customer relationship point of view: I have been a My Sony member (for professional interest only, I assure you) for two years! When will companies of Sony’s stature wake up to the basics of direct marketing and use simple merge-purge and customer list suppression tools?

  • What happens when you join My Sony? Well, you complete a profile and then receive a “personal e-newsletter…and the chance to earn exciting Sony rewards.” Folks, I was a copywriter for more than 20 years, and I know the difference between “personal” and “personalized.” At least, the Sony people make that distinction—of course, most consumers who aren’t copywriters will think the “personal e-newsletter” will be personalized with their interests. But it isn’t; it’s essentially a new product bulletin, covering wildly diverse Sony properties, from rap music to Tony Bennett to Jeopardy!. And of course, the rewards are opportunities to use points to buy down the retail price of Sony merchandise. To be fair, there are some features to this program that are of some value and interest and are uniquely part of the “Sony experience,” such as auctions and opportunities to experience concerts and events backstage. While those features are interesting and provide a positive halo effect, they don’t make up for the program’s lack of overall value or relevance.

  • A recent My Sony “personal e-newsletter” features an offer so convoluted and impersonal that it boggles the mind. I’ll try to make it simple:

    Members are invited to watch Wheel of Fortune daily, then log on to My Sony with the solution to the Bonus Round Puzzle. If you answer correctly, you earn 100 points and then 150 points for each subsequent daily answer that week. Except for Wednesday, when you earn 200 points. (I didn’t make this stuff up, honest.) But wait, there’s more: You can also earn 50 points each time you buy marked packages of BreathSavers and enter the code on the wrapper in the BreathSavers Bonus link on the Wheel of Fortune page of the My Sony web site.

Does anyone really believe this rocket-science promotion will measurably increase Wheel of Fortune viewership and BreathSavers sales, or create meaningful involvement with the Sony brand?

Electronic media promises true breakthroughs in the cost of marketing communications and in the delivery of personal relevance and value to consumers, and there are companies who are doing a good job of capitalizing on this opportunity. Sadly, such companies are the exception rather than the rule. These examples are just a few of the many marketers who fail to deliver on the latter promise. And I’ve deliberately focused on very reputable companies, not on classic spammers or schemers. If this is the best that category-leading companies can come up with, the growing backlash from consumers and legislators could deal a devastating blow to the future of electronic marketing. And maybe it should.

MyPoints, Sony, My Sony, BreathSavers and other products, programs and properties mentioned in this article are the registered trademarks of their respective owners.

© 2005 Metzner Schneider Associates


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