Aug 28, 2010

Rational efficiency (traditional loyalty programs) versus having fun (social media)

The traditional loyalty program mindset is a barrier to companies that want to adapt to the social web.

The industry is built on efficiency, complex incentives and clever triggering tricks designed to take advantage of the customer's mechanical rationality (or programmed irrationality, I can't tell the difference).

Comments in response to a post on LinkedIn show a very strong focus on things like points versus cash back and other rational or mechanical drivers. Social media is in a completely different space. Social media is not rational in the sense that loyalty marketers are used to.

Even Google is struggling with this issue.

"Google products are efficient, slick and -- as the coders say -- elegant," writes AdAge. "They get you from point A to point B fast. Really fast. But are they fun?"

Social media is about having fun. Foursquare players don't do their check-ins at Starbucks for the goal of getting a free coffee. They do it to become Mayor of a particular Starbucks location. A friend of mine recently commented that his sister was Mayor of their home, and proud of it.

"Can a company built for efficiency also help people waste time?" asks AdAge.

The same can be asked of the loyalty marketing industry today.

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