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Monday, Apr. 5, 2010 at 11:00 am

When Customer Reward Programs Backfire

By Natalie Hart
April 5th, 2010

Ahhhhh, yes… those ever-so-compelling customer rewards and points.  In addition to discounts and freebies, many companies now offer points as a system of rewards for their customers and clients.  While I’m all for getting an extra 10% off my next pair of shoes, or $15 dollars off my next purchase of $150 (or more), I believe that if you really want to reward your visitors, make it easy for them to redeem these special bonuses.  If done right, rewards programs reinforce your relationship with the client.  But if you overlook these efforts in your marketing optimization plan, you could be doing more harm than you realize.

Recently, I received two customer rewards in just one week from companies I patronize.  And, while I was excited and persuaded by both offers, one company’s claim process was so easy, I was feeling pampered in a matter of minutes, but the other company’s was so difficult, it nearly put me off buying from them altogether.  Some reward!

VS Scent-1We’ve blogged at least once before about how Victoria’s Secret does a good job of maintaining scent and persuasive momentum in their banner ads, and that’s why I was so surprised by my experience trying to collect on the “FREE VS Undies Panty” coupon I received in the mail.  This time around, Vicky overlooked one very important piece of information, and despite a very streamlined checkout and lots of great scent on the site, that little missing tidbit of info had a huge impact on my persuasive momentum. When I received my coupon, I decided to search online to redeem my free gift.  I clicked on the panties category to begin my search.  Clearly labeled, I found the subcategory “VS Undies” under  “Shop By Collection.”  So far, so good.  Just as outlined in our previous post, there is a strong scent trail between the coupon and the terminology used online.

After selecting my item, I headed to the checkout, looking high-and-low for my coupon code option atVS shopping bag each step.  Uh oh… by the time I reached the checkout page, having already completed the credit card and delivery information steps, I still had not been prompted to enter my coupon code.  That’s when I hit the “back” button not once, not twice, but 4 times before I finally found mention of a coupon code… not in the shopping cart but in the shopping bag!  Rule #1: If you offer a rewards program, make sure visitors can find it. There’s no use trying to build customer loyalty if customers are reminded how difficult it is to complete an order.

Determined not to let the last half hour go to waste, I checked the “offer code” box on the first page of the shopping cart and began the process again, re-entering all my delivery and credit card details a second time.  I have to say, Vicky clearly already had done her homework with regards to her checkout process: it was very streamlined and it was easy once I checked off this box to find in the top navigation where I should enter my “offer code redemption.”  But that made it all the more frustrating when, after all this effort, I received an error message saying my offer code was not valid!

Offer code

As directed by the error message, I painstakingly read over all the tiny print on the back of the card until I found the second to last line that read, “Not valid on previously purchased merchandise, catalogue or online purchases.”  Rule #2: If visitors can’t redeem the points at certain locations, tell them up front. VS could have avoided my frustration (and even taken a positive spin on this rule) by printing on the front of the card, “We’d love to see you! Come into a store near you to receive your FREE VS Undies Panty!”

tropicanaThe other redemption I received was from Tropicana.  They’re currently running a promotion where a code under the cap of their products translates into points when entered online, and those points can be redeemed for different offers and discounts in your area.  (I’ve gotten 2 free yoga classes at a nearby studio!)  I found the process of redeeming my points so easy that it actually encouraged me to continue to buy the Tropicana brand, even when not on sale.  So, what did they do right?

1.  On the carton it reads “Go to Tropicana.com to redeem your points.”  Rule #2, check: I know where to go to get my gift!

2.  Once on the site, a large icon in the middle of the navigation stands out from the rest.   It reads “Tropicana Juicy Rewards,” maintaining consistency between what is advertised on the juice carton and the content on the site, and creating a strong scent trail.  Rule #1, check: correct offer clearly identified!

3.  By putting the promo icon in the navigation, Tropicana has created an intuitive connection between clicking on the logo and more information about the promo.  Rule #3: Don’t assume your visitors know as much as you do. You created the site, so obviously you’ll navigate easily. If you’re having trouble seeing your site from your visitors’ perspective, use a user testing service to find out how intuitive your site is for your visitors.

Remember, rewards programs are designed to encourage your customers to keep coming back and to gain good word-of-mouth about the extra benefits and edge that you provide over your competition.  Using them should be easy and intuitive to your visitors.  Your bonuses need to be clear, easy and fast so they feel like bonuses…  or they may counteract your otherwise streamlined checkout process and make customers feel like your site is difficult to use.

Do you have any favorite loyalty programs that follow these rules effectively?

Add Your Comments

Comments (43)

  1. I’m sure the inventor of this kind of marketing didn’t have any idea of these side effects in 1923. :)

  2. I hate when I see this. I have bought many things and I always have trouble finding the place to put the code.

  3. This makes us think if they really want to give that reward. If it’s hard to find, it really makes me think they don’t really want to give it.

  4. Some sites bonuses are clear, easy and fast but some are not. They just make things hard for us. They make their bonuses hard to get.

  5. An often forgot about benefit of running promotions and bonuses on the site is the “linkbait” it creates. Many sites exist that link to sites that are running special offers. Nothing better to help with climbing up the rankings in your niche

  6. these reward programs are a con. Your actually are spending more money before you get the discount.

  7. Rule #1 seems obvious enough, but not enough people go for it in the end. People have creative blindness, because they believe that everybody sees what they see. You have to see from the other point of view when designing your layouts.

  8. @ Andrew

    That is a great point. I think that many sites advertise those things as hooks, but when it really comes down to it you are going through page after page of forms and scripts to find it. Not a good end user experience.

  9. Natalie,
    Great post. It seems only logical that the redeem coupon code be found easy but so often I think companies rush to get something out they forget to dot the i’s and cross the t’s.
    One company I was more than happy with their redemption process was Tom’s Shoes. The code appeared immediatley when I went to checkout in the shopping cart.

  10. That’s pretty funny! I recently redeemed some Tropicana points (mainly because I love to see how companies implement these sort of things) and thought to myself “well that was simple :) ” It didn’t really click until now, but ya, I’m definitely more likely to buy Tropicana OJ on my next trip to the grocery store.

  11. Natalie,

    Great and thorough blog post. I am usually pretty happy with Victoria’s Secret’s promotions and specials, but it sounds like your experience was confusing. I have found Gap’s reward process is usually easy to redeem.

  12. I recently tried to benefit from a discount on new contact lenses. I got the confirmation e-mail for my discount, but when I made it to the store I needed to buy more than what was promised in the promotion in order to get the discount. Very disappointing and frustrating experience.

  13. You make several great points. I guess it comes back to usability. It looks like they didn’t test enough before implementing the reward programs.

  14. Double-edged sword I guess. On one hand, one would expect larger companies like VS and Tropicana to be thorough enough to think these things through. On the other, I’m sure there are several degrees of separation between the departments running the promotions. Mistakes or oversights are bound to happen from time to time.

    Great post!

  15. its usually added as an afterthought rather than part of the development cycle of ordering so will usually be last!

  16. Dear All

    I am agree your comment

    ok thanks

  17. Let’s be honest. These ‘reward’ programs are never designed for the customers. They do reward someone else though…

  18. Just came across one of these yesterday that allowed me to choose a free gift for a purchase of $200. However, the free gifts offered for a purchase of $50 were better and I couldn’t choose those, I had to stay with the selection for their $200 purchase range. Kind of backfired in my opinion, since I would have been able to choose a much nicer free gift if I spent less money. Obviously, I wasn’t very impressed.

  19. [...] Source:When Customer Reward Programs Backfire Share and Enjoy: [...]

  20. These can be frustrating at times. I’m glad someone is finally reviewing these rewards programs.

  21. Great read! We’ve been contemplating a similar rewards promotion at my company for some time — great to see an example of how they should be done right, and how easy it is to get wrong.

  22. Site bonuses must be easy to get and clear. It should feel like a bonus and not a burden. These things should the owners must take into action to make us the customers happy.

  23. Didn’t know a rewards program could do that haha

  24. I would agree that most of these reward programs tend to be a bit of a scam. Or at least they feel like one after spending ages working on trying to redeem the points for something.

    My 2 cents

    - Chris

  25. There was a load of great stuff here !

  26. actually I never trust these kind of programs. don’t think they will work

  27. Didn’t know a rewards program could do that thanks

  28. Some very good points about companies not maintaining consistency between their products and their websites.

    Over in the UK, we have a loyalty scheme from Coca Cola called Cokezone which actually has a totally seperate website and is really well laid out. Like your Tropicana example it allows customers to enter codes from their drinks and use the points they receive to get all types of prizes. It’s really good.

  29. Rewards programs free contests and giveaway have many benefits besides improving conversion it helps your site be offline marketing by people meeting and also may help getting viral links from communities forums sites tracking special offers etc.

  30. Great and thorough blog post. I am usually pretty happy with Victoria’s Secret’s promotions and specials, but it sounds like your experience was confusing. I have found Gap’s reward process is usually easy to redeem.

  31. Some of these sites bonuses are clear, easy and fast but some are not. just make things hard for us. :( They make their bonuses hard to get.

  32. After 12 years of designing web sites and shopping carts I’m convinced that most web designers/engineers don’t actually go through the process once they finish coding. That’s something I’ve learned to always do because often times there are obvious changes that should be made to improve the customer experience.

  33. This post does identify the issues that many companies feel after the expense of development they have not budgeted for resources, time and money, for testing.

    Testing is so important.

    I agree with the usability issue you raised, that if you have developed, or have been involved in the development process then you will know where everything is.

    Competition is high and social media is acting as the new word of mouth.

  34. When customer rewards backfire, you know you have done something wrong. Rewards are all about encouragement not discouragement….

  35. Double-edged sword I guess. On one hand, one would expect larger companies like VS and Tropicana to be thorough enough to think these things through. On the other, I’m sure there are several degrees of separation between the departments running the promotions. Mistakes or oversights are bound to happen from time to time.

  36. You have so wonderfully highlighted where a webmaster can go wrong and I have taken heed when planning my own ‘offers’ campaign. Thank you.

  37. [...] View full post on Conversion Rate Optimization & Marketing Blog | FutureNow, Inc [...]

  38. These can be frustrating at times. I’m glad someone is finally reviewing these rewards programs.

  39. hi guys..it helps your site be offline marketing by people meeting and also may help getting viral links from communities forums sites tracking special offers etc.

  40. zappos ended up loosing 5 million in a customer service marketing ploy

  41. [...] View the original article here Tags: backfire, customer, programs, reward [...]

  42. An often forgot about benefit of running promotions and bonuses on the site is the “linkbait” it creates. Many sites exist that link to sites that are running special offers. Nothing better to help with climbing up the rankings in your niche

  43. I agree. Having a loyalty program that is very complicated almost appears to frustrate the customer to the point of not redeeming the reward. It is counterproductive and scheming.

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Natalie is a Persuasion Analyst with FutureNow.

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