Manufacturers and retailers began introducing rebate programs more than 50 years ago, and they still remain as key components of their customer loyalty and promotional strategies. But for today’s always-connected digital consumers, it must seem like the rebate redemption process is stuck in the analog age. The expectation of today’s customer is all about options and flexibility.  One redemption model does not work for everybody, one reward type does not work for everybody.  That doesn’t mean you should abandon your rebate program. On the contrary, it should evolve into a tool for gathering invaluable information that you can use to increase sales and improve customer satisfaction.  

The Old Way

Rebates originated in the 1960s, and their popularity surged in the late 1980s and early 1990s when liquor and cigarette manufacturers began attaching $1 and $2 mail-in rebate coupons to their bottles and cartons.

Rebates began to fall out of favor among marketers who were unable to prevent scammers from committing fraud, and among consumers who viewed the rebate offers themselves as the scams. I found this Wall Street Journal article from back in 1998 that reported consumer advocacy groups hated rebates because of the perception that companies issued them to entice purchases and hoped consumers would not bother to submit them. 

But today rebates are enjoying a renaissance. The Postal Service and state governments have cracked down on fraud, and new technologies can make rebates rewarding for both issuers and redeemers. Or at least they should.

Consumer Reports found that over the course of a year 70 percent of consumers had taken advantage of manufacturer rebates on products. Sounds good, but a closer look at that statistic reveal some red flags. Of that 70 percent, less than half (47 percent) said they send in rebates “always or often.” 23 percent indicated they do so only “sometimes,” and 25 percent indicated “never.”

Consumers still have to spend too much time filling out forms, and still harbor feelings of mistrust. Unfortunately, many manufacturers and retailers perpetuate those views by only using rebates as sales incentives, and not as the effective customer engagement tools they can be. 

The New Way

The good news: This presents an opportunity for you to gain a significant competitive advantage, particularly among tech-savvy millennials. Entrepreneur magazine reports they prefer higher-value rebates to instant discounts across multiple product categories, including electronics, entertainment, sporting goods, clothing, wireless plans and groceries. In other words, retailers should offer rebates that provide more savings over price-cutting or matching programs.

You may be familiar with the term “Big Data” to describe the ever-growing volumes of information you are collecting on your customers. You likely use this data to glean insights into your customers’ likes and dislikes to create more targeted marketing and sales campaigns. Your rebate program can play a key role in this effort.

A rebate submission does not just tell you what customers purchased, it also tells you what they did not purchase. That opens the door for you to engage with them so they return to you to buy those items 

Consider the customer who purchases a new laptop computer and returns the rebate form that enticed him to buy it from you. The receipt and rebate form shows the laptop’s make and model. But it also shows that customer did not purchase a carrying case, power cord, SD memory cards, an external keyboard and mouse, or headphones. He’s left hundreds of dollars sitting on your store’s or e-commerce portal’s shelves.

However, if you used the rebate submission as an opportunity to collect his contact information, as well as insights such as what other brands he likes, you can leverage that data to follow-up with offers and promotions in a personal, non-invasive way. Replicate that process every time you receive a completed rebate submission, and apply data analytics to help you predict broad trends, forecast demand, and engage with customers in ways that compels them to make purchases and share their positive experiences.

Keep it Simple

Smartphones, powerful data analytics solutions and other newer technologies cannot relieve you of the need to require customers show proof of their purchases. Follow these five key steps to make the rebate redemption process easier and more efficient for your customers.

1. Embrace mobility: For the first time ever, the majority of 2015 holiday shopping season traffic to retail e-commerce sites in North America came from mobile devices in North America (Source: Akami Technologies, Inc.). Your customers expect you to offer robust, sophisticated mobile apps, so why not incorporate your retail program into the mobile experience you offer? Enable them to use their smartphone cameras to scan or take pictures of receipts and UPC codes, and upload them to you immediately.

2. Ask for information: We’re all concerned about our privacy in the Digital Age, but your customers want to engage with you, and are happy to share personal information – everything from their credit card numbers to their favorite hobbies – providing you do not abuse that trust. Ensure your rebate form requires customers to provide at least their contact information, and asks their permission for you to send them offers and announcements via email, text message or their other preferred options.

3. Be social: Facebook, Twitter, Instagram and other social media outlets have become powerful marketing tools. Take advantage of our collective compulsion to share our activities with our followers by making it easy for your customers to post their positive shopping and rebate redemption experiences on their and your social media platforms.

4. Make it easy: Along with making it quick and easy for customers to complete your online or mobile rebate form, provide alerts about missing information and confirmations that rebates were submitted successfully. Offer status reports and tracking of online and mail-in rebates so customers are 100 percent certain the process is on-going, and when they can expect to receive their checks, gift cards or redemption codes.

5. Find a partner: Retailers must keep track of dozens, even hundreds, of manufacturers’ rebate offers. If a customer has a bad experience, he’s most likely going to blame the retailer, not the manufacturer. Yet the retailer’s customer service team rarely has ability to connect with manufacturers to get answers to customers’ questions. Offload the responsibilities of assisting customers with their issues and managing the rebate processing and promotion fulfillment processes to a third-party provider.

There’s an old Marketing 101 lesson that states if one customer has a bad experience, he will tell 10 other people. It came out of a study done for Coca-Cola 35 years ago. Of course, it could not take into account the rise of the internet, social media communications platforms and smartphones. Today, that one unhappy customer can instantly alert hundreds, even thousands, of friends and followers. Customer service matters more than ever. A five percent increase in customer retention can increase a company’s profitability by 75 percent. Your rebate program can become a key driver of customer satisfaction by collecting information you can use to engage with your customers, build their long-term loyalty and trust, and turn them into your most effective brand advocates.

Afligo is a marketing company offering payment processing, rebate, referral, incentive and loyalty programs.

 

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