Rebates should be treated more like fan mail.
Marketers who dismiss rebates as a price-cut device are missing the opportunity to target an important consumer group: Shoppers who just bought their products, and may be in the market for more.
“You have two to six points of contact with the consumer during the rebate process,” said David Diamond, principal of New York retail consultancy David Diamond Associates. “It’s almost scandalous that manufacturers and retailers don’t take advantage of those opportunities to build a conversation with consumers.”
Diamond spoke with PROMO P&I about the role rebates can play in customer relationship marketing.
You see a higher calling for rebates as a CRM tool.
Rebate processing means that you are talking to a qualified buyer at least twice more, so you should try to sell him something. You can use those touch points to build a data base, to field low-cost research and to cross sell additional products and services. Marketers don’t take advantage of those opportunities because rebate fulfillment is relegated to a processor who is not connected to their loyalty marketing.
I just bought a cell phone and submitted a rebate, and the company didn’t even bother trying to sell me a charger or headset. Who is a better customer for you than someone who just bought from you, and has proven he’s willing to go through some extra effort to do business with you? Marketers have relegated rebates to the execution department, and don’t think of them as loyalty marketing strategy. Fulfillment houses need to help manufacturers use rebates to their fullest.
Who is using rebates for CRM?
A few retailers are beginning to: Staples, Home Depot and Costco. Staples’ Easy Rebate program lets consumers submit all rebates from separate manufacturers in one place, with a single receipt and fulfillment form. Consumers give their frequent-shopper account number, and that triggers an e-mail dialog.
Home Depot lets consumers take their rebate dollars as a gift card, and runs periodic promotions with bonus values on gift cards. Continental Promotion Group, Tampa, works with Staples and Home Depot.
Do marketers have to change their CRM infrastructure to better leverage rebates?
It can be folded right into their current frequent-shopper infrastructure. It’s a relatively easy add-on that doesn’t change the way you process rebates, just the way you use the output of the information you get from rebates. Short-term, rebate respondents can be asked to join a club or program, can be asked questions about their recent purchase, and can receive offers of products and services connected to the product just purchased. Longer-term, they can become a base of consumers whose loyalty to the retailer can be extended to loyalty to the manufacturer.
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