Colgate-Palmolive is currently running a Customer Engagement Management program for its premium toothpaste brand TOTAL.
Like all CEM programs, this one also mandates product purchase.
The price of the product is INR 102 (US$ 1.25) and the reward for purchase is a cashback of INR 50 (US$ 0.67) credited directly to the consumer’s PayTM eWallet. This works out to effectively 50% discount.
To claim the reward, the consumer needs to send an SMS to a mobile phone number and share some PII (Personally Identifiable Information) on the landing page of the program provider’s website.
I did a test drive of this program. Here are my observations:
- The program makes multiple mentions of the cashback on the generous real estate available on the external surface of the product package. Consumers can’t miss it.
- The Earn Ratio is 49% (being reward/spend = 50/102). Since the reward is redeemable 1:1 for cash, the Burn Ratio is 1. Accordingly, if this were a loyalty program, the program value would be 0.49*1 = 49%. This is way higher than typical loyalty program values of 0.4-0.5%. Click here to know more about these metrics.
- The cashback is available only once per consumer tracked by mobile number and email address. While the T&Cs don’t say so explicitly, I’m guessing I won’t get a cashback even if buy the product many times during the promotion period. This is a bit of a dampener for a program that runs for a fairly long time (till 31 December 2021).
- The reward-redemption journey involves one too many steps. It also harvests unusually high amount of PII. But they could be justified in the light of the higher-than-normal reward given by the program.
- The Unique Code to be SMSd is printed inside the box (see above exhibit). Therefore, you just can’t find it while browsing the product on the store shelf. This is how the program enforces its basic condition that “purchase is mandatory”.
- The Unique Code follows the DEC ALPHABET best practice for alphanumeric codes (see above exhibit). For the uninitiated, this is a cut-down alphabet that skips the letters ‘G’, ‘I’, ‘O’ and ‘Q’, which can be confused with numerals ‘0’ and ‘1’ when printed poorly or in some fonts.
- After sending the Unique Code by SMS, I received an SMS within a few seconds saying I’d receive the reward code within 24 hours. In practice, I received it in two hours.
- The reCAPTCHAs used in the reward-redemption journey were terribly painful to crack. Especially the ones asking you to identify “crosswalks”, an American term that Indians know as “zebra crossings”. Besides, I felt that they were unnecessary because this step anyway used a mobile OTP to authenticate the user. Given that reCAPTCHAs are meant to keep out bots, does Colgate-Palmolive really believe that bots have mobile phones these days? Anyway, after I finally floundered through this step, I received a PayTM coupon code.
- I entered the coupon code on the PayTM app. I was told that the cashback would be credited to my account in 24 hours. Going by past experience with other CEM programs that issued PayTM cashback, I was sure of receiving the credit in 4-5 hours. I did!.
Overall, apart from the reCAPTCHAs, this is a fairly frictionless and a highly rewarding CEM program – I can’t recall another program with such a high ROE (Return on Effort).
A big shout out to Colgate-Palmolive for conceptualizing and executing it.
At this juncture, you may be wondering why Colgate-Palmolive didn’t just give an INR 50 discount at the point of sale and be done with it. Obviously, that would be way simpler – and cheaper – than running a CEM program.
I’m not privy to the toothpaste giant’s thinking but, in general, there are a few good reasons why brands eschew discounts and instead resort to rewards given via customer engagment management programs:
- Discounts are okay to soup up sales at quarter ends, festive seasons and other specific occasions. But they tend to tarnish the image of the brand if they’re overdone e.g. as high as 50%.
- The PII gathered by Colgate-Palmolive from this program provides a ready database of existing TOTAL consumers who constitute hot prospects for 1-on-1 targeting by campaigns seeking to drive repeat sales of the product in the future (at full price, that is!).
- The data harvested via CEM is very valuable if Colgate-Palmolive sets up a Direct-to-Consumer channel, as many brands have done during the pandemic e.g. Bisleri, P&G.
- CEMs offer a great way for brands to engage directly with consumers about new products and future promos.
Data is the new oil only for those who run targeted ads on top of it. For the guy from whom the data originates and to whom it belongs, data is not even worth peanuts. https://t.co/1QAFDdGZPK via @WIRED @GregoryJBarber . #Datum #Doc.ai #Wibson
— Ketharaman Swaminathan (@s_ketharaman) January 22, 2019
The two key goals of a CEM program are to collect PII and drive repeat purchase.
Virtually every CEM program I’ve helped craft for my company’s customers or participated in as a consumer has permitted a customer to make unlimited purchases and claim rewards for each purchase. Many of them also avoid long forms to collect all the information at one shot, instead deploying the Progressive Profiling best practice whereby they snag just one or two fields of PII on each of the successive purchases during the course of the CEM, or even later.
This one does not. As explained above, Colgate-Palmolive imposes a “single cashback” condition, which does not help drive repeat purchase; and gathers too much PII at one shot, which mars the otherwise frictionless experience of the reward-redemption journey. This is a head scratcher.
In the absence of any information in the public domain, I can only speculate about why the program is designed in this manner: Either the company can’t afford to sell too many units at a 50% discount, or it has a limited stock of toothpaste that it wants to move fast, or both.
Caveat Emptor: Before buying the product sold under this promotion scheme, you might want to check out its expiry date (wink wink, nod nod!).
