Rebate Programs: 10 Best Practices
By Juli Spottiswood, [email protected]
For the past 40 years, rebates have proven to be effective consumer promotions that drive sell-through of specific products while providing savings to price-conscious shoppers. Rebates have evolved from a simple “sales lift” strategy to a marketing tactic designed to generate long-term consumer loyalty and brand affiliation.
As the leading provider of rebate programs in the United States, Parago promotes the following best practices to ensure consumer fairness and satisfaction with the rebate experience along with the best outcome for the rebate sponsor:
1. Provide a consumer-centric approach to offering, claiming, tracking and administering rebates. Rebate offers should convey a clear value for the customers and the customer should be treated fairly and honestly. The process of acting on the offer should not result in undue burden on the customer.
2. Rebate offers must comply with all applicable state and federal promotional and advertising laws and regulations and take reasonable steps to avoid fraud. As with most promotions, these laws and regulations are subject to ongoing changes and the parties involved must stay abreast of, and comply with, these events.
3. Rebate offers must be constructed so that customers can easily follow the promotional rules and redeem their rebate with reasonable effort.
- A rebate should be directly associated with the desired purchase behavior and not serve any other purpose.
- The effort to redeem should not discourage redemption.
- Proof of purchase requirements should be minimal, such as a copy of the store receipt and UPC symbol from the product packaging.
- The postmark due date should be based on the end of the promotion, not the purchase date, and should allow the customer a minimum of 14 and a maximum of 30 days from the end of the promotion to mail in the claim.
4. Offer the consumer choice in rewards. Checks were eschewed by many for the prepaid card, which is ready for immediate use, loved by consumers for convenience and enjoyed by corporations for the branding power. Technology has now given rebate sponsors the ability to provide customers with the reward of their choice, including check, prepaid card, PayPal payout, or even merchandise. With choice comes satisfaction, enriched brand experience, increased customer loyalty and positive word-of-mouth.
5. Allow the rebate to be redeemed at least partially, if not entirely, online. This provides the rebate sponsor with valuable added marketing opportunities, it can present reward options to participants and can provide real-time tracking information. Additionally, in today’s digital world, most consumers prefer online rebate redemption to mail-in. The latest rebate redemption technology even allows consumers to submit via their smart phones.
6. Ensure that all rebate offer terms and conditions are presented clearly to the customer at the appropriate time and through the appropriate vehicles prior to the purchase, eliminating any surprises or misinterpretation. The language used should be clear, unambiguous and easy for the customer to understand and follow. Key items should be clearly communicated and separated from the detailed legal terms and conditions required. Material terms and conditions must be disclosed prior to the time of purchase.
7. When advertising rebates, marketers must present the costs the customer must incur in the initial purchase and subsequent rebate claim process. For example, if advertising the net, after-rebate price of a product or service, the marketer must also include the pre-rebate price and the amount of the rebate that results in the net price. In addition, individual states have very specific advertising laws regulating the way that various price points must be presented to the customer.
8. The rebate should be processed quickly and accurately and paid without delay. It is the responsibility of both the marketer and the rebate processor to forecast the expected redemption volume to ensure appropriate funds are available to facilitate the payments quickly while also ensuring staffing levels are in place to avoid a backlog. The more quickly a rebate is paid out, the more positive the experience will be for your consumers.
9. During the processing of a rebate claim the rebate processor should deliver a number of proactive communications alerting your customers to the status of their rebate claim via email, direct mail, IVR and other convenient communication methods, catering to your customers’ preference. A toll-free number and website should be provided and customers should be given a reasonable expectation of when they will receive their rebates.
Rebates implemented with a customer-centric approach can continue to be effective promotional vehicles and yield great results for marketers, while leaving behind both positive and memorable customer experiences.
Juli Spottiswood is president & CEO of Parago, a leader in rewards-based incentive solutions. She can be contacted at [email protected].
Pantry CFO resigns
Cary, N.C. — The Pantry announced today that Mark R. Bierley, CFO, has resigned effective May 25, 2012. Bierley has accepted a position near his home in Michigan.
The convenience-store company will begin a search for a new CFO promptly. Berry L. Epley, VP and corporate controller, will assume Bierley’s responsibilities until a successor is named.
Starbucks profit jumps 18%
Seattle — Starbucks Corp.’s net income surged a better-than-expected 18% in its fiscal second quarter, as its store traffic increased in most parts of the world. The coffee giant also raised its forecast for the year on the results and said it was accelerating its growth.
For the three months ended April 1, the company earned $309.9 million, compared with a profit of $261.6 million in the year-ago quarter. Revenue rose to $3.2 billion, up from $2.79 billion a year ago. Same-store sales increased 7%.
Starbucks’ same-store sales were strongest in China and Asia Pacific, where sales rose 18%. Same-store sales were up 8% in the Americas but down 1% in the region encompassing Europe, Middle East, Russia and Africa. Starbucks executives attributed the weakness to ongoing economic turmoil in parts of Europe. The company said it is taking similar measures in those markets as it did when it was struggling in the United States, such as introducing loyalty programs and improving service to boost sales. It also is continuing to adapt its offerings to local tastes.
"I will tell you unequivocally that we will turn the European business around in the same way we turned the U.S. business around," company founder and CEO Howard Schultz said in a conference call with investors.
Still, he added that the situation is "very, very tough" and varies greatly by region.
Starbucks, which has more than 17,000 stores globally, said it will accelerate new store growth this year to about 1,000 net new stores around the world. The total includes approximately 500 net new stores in the Americas, with licensed stores comprising approximately one-half of the new additions.
In its most recent quarter, Starbucks opened its 3,000th store in the China/Asia Pacific segment and first store in Norway.