Incentive Programs and the Impact on Your Brand

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One Mother’s Story

Recently, a personal experience with a poor incentive program left me pondering how good companies go astray with a potentially great idea. So as not to disparage the company, especially since I think they still make great products, I’ll call them XYZ Tire. XYZ Tire ran a promotion on tires for SUVs: buy four tires of a certain level and receive a $50 rebate. Well, turns out I needed four tires anyway after two of my four went bad, so I went for the upgrade because the tire with the rebate was better for my needs, I knew that XYZ Tire produced quality tires that I trusted (I was planning to buy another tire from them anyway) and they were offering a nice rebate deal. What wasn’t to like?

Shortly after my purchase I received a $50 Visa card, clearly marked rebate card with an expiration date one year from the date of purchase of my tires. I was pleased and thought, “I’ll hold onto this for a rainy day”, also known as, when money is low. That day came when I needed to purchase a new carseat for my daughter, an expensive ticket item that would be slightly less painful with a $50 reduction.

The Fine Print

Unfortunately, when I called Visa to activate my card, I learned that for the previous five months I was being charged a monthly fee of $3.95 and my $50 rebate was now down to $30.25. Now yes, I’ll admit, I didn’t read the fine print on the card. Why? Because to me a rebate is a rebate. It shouldn’t be a rebate with strings attached, or a rebate that decreases in value. This indicated to me a poorly conceived incentive program because it’s connected with fees – a point of contention that many brands have come under fire for over the past several years not only for incentives but for gift cards as well (see the March 2010 ruling from The Federal Reserve). Instead of being shown respect as a loyal XYZ Tire customer and given a true $50 rebate, I was assessed a monthly fee after a three-month grace period. When I complained to Visa, they told me to file a complaint with XYZ Tire, even though it is clearly a Visa Card policy to charge the fee. In this case, I was surprised by how quickly the rebate program “partner” threw XYZ Tire under the bus.

A Mistake Made Worse

Ultimately, I did email XYZ Tire to let them know how disappointed I was as a customer, that I expected more from a company I had always held in such high regard, and felt somewhat cheated out of my “rebate” and that my loyalty was being taken for granted. Of course all I received in return was a standard form email explaining the terms of the rebate card rather than anything personal that addressed me as a real consumer (another minus for XYZ Tire).

At the end of the day, I’m still left wanting and expecting more from XYZ in terms of their company’s relationship with their customers, which does not seem to be a priority. For XYZ Tire and any other company where this type of strong product and weak customer relationship schism is present, I caution them about how to approach incentive programs. An incentive program needs the backbone of the company to support it and create brand loyalty. A weak incentive program, poor customer service related to an incentive program or a poor third-party partner could easily reflect negatively on your brand and do more damage than good. So, before sending out that rebate card, gift card, or offering a reward program, consider a thoroughly researched incentive program that identifies any potential pitfalls your brand could encounter along the way. It’s always better to be prepared than to be caught off guard and have your brand take an unnecessary beating.