The Hurdles
The idea that I have described about creating a points system for brands to reward consumer attention and action seems like a simple enough idea that it should have been quite common by now. But it is not. That is what intrigues me. Why have brands not done this? Here are some reasons that I can think of as to why this has not happened.
First, such a program can only be done in the digital world. In the offline transactions world, we had brand-specific loyalty programs. These were typically physical cards which had to be shown at checkout and to which points were added. As ecommerce grew, the mobile number or email address became the identity to which the points could be linked. The rise of a digital identity also led to the creation of multi-brand programs (Payback in India, for example). Credit card companies also created their own points programs to drive the usage of their cards over other payment alternatives. As these programmes grew, so did the benefits and rewards of owning and using a card. One thing common to all is the linkage with a transaction because it is impossible to measure and track engagement in an offline world.
Second, until recent times, digital was not a large channel for most brands. Hence, digital communications and engagement was a small part of the overall marketing program. As such, the basics were all that was important – send out the receipts and offers, and hope for some clicks. Digital’s growth has skyrocketed in the past few years and a new class of digital-only direct-to-consumer (DTC) challenger brands have emerged. So, it is only now that there is a critical mass of digital brands – some digital first, some digital only and some hybrid (offline first, with digital as add-on).
Third, engagement budgets have been mostly much smaller than acquisition budgets in most marketing departments. The exciting thing is to get new customers – which means running TV ads or doing large spends on Google and Facebook. The bigger the budget, the more exciting it is for the marketer. Once a customer is in, engagement, retention and growth are typically given to a much smaller team with even smaller budgets. These teams do their bit – emails, campaigns, push notifications, SMSes with a single objective to get the consumer back to the website or the app. In these smaller budgets, there is little room for rewarding attention.
Fourth, should brands decide to spend to reward attention and action, someone in the C-suite would definitely bring up the issue of double spending: “So, you are spending on sending the email, and then also spending to get someone to open or click the email? This doesn’t make sense at all.” And thus any rewards program would be nipped in the bud since no email company would be willing to take up a pure performance campaign because they would have no control on the creative, and there is a finite, non-zero cost for sending emails.
Fifth, should all these hurdles be crossed, no loyalty brand would be willing to run a program where 100% of what the spend is passed on the consumer.
Finally, to really make a program like this work, it would need to get multiple brands on board – consumers will not find it attractive if points can only be earned across one or two brands.
A product or program has to solve all these problems simultaneously to succeed. And this is what the Netcore’s MyToday Microns and Mus platform hopes to do.
