could only shudder as I read the announcement. There are a lot of smart people over at Pepsi and I can’t
believe that someone hasn’t pointed out to the managers at Tropicana that customers are always in search of more value
(in fact you have to wonder if the 2% who didn’t report that they wanted more value actually read the question before
responding). After all, as consumers we are always seeking “value” in one form or another.
If we aren’t getting some form of rational or emotional value in return, why in the world would we be willing
to part with our hard earned dollars?
the real question comes down to understanding value. We encourage clients to think of value in the form
of an equation. The numerator including the entire product and service experience delivered by the brand,
and the denominator being everything you give up to acquire the product or service. In order to provide
more value and thereby increase purchase behavior the company can either add to the numerator or reduce the denominator.
Sounds simple. It’s not.
The “experience” in Tropicana’s
case includes the look of the orange juice, the smell of the orange juice, the taste, the look of the packaging, the feel
of the packaging, the memories that are stirred by the packaging, the feelings created through advertising, the freshness
of the product, the availability of the product, experiences with Tropicana customer service at headquarters, and more.
The denominator surely does include price, but for a product like Tropicana orange juice it could
also include any special effort required of the customer in finding a convenient location to buy the brand, any negative reactions
they would encounter from their family upon changing brands, and any risk that might feel personally in switching brands.
When you consider all that you might wonder what, as the market leader, Tropicana is hoping to gain from a points
program. How valuable are those points really going to be? Exactly what behavior is this program attempting
to drive? Considering that the company admits that it doesn’t expect current customers to buy any
more orange juice as a result of the program, why are they making the investment (remember they’ve characterized it
as the largest marketing investment ever for the brand)? Do they expect that the customers of their competitors
will make a switch to Tropicana (perhaps even pay a higher price) to be part of Juicy Rewards? (Based on
what has been announced to date it sounds like rewards will come in the form of discount coupons to be used for active lifestyle
goods and services.)
One final thought. I always challenge the creators of points
programs like this to prove that they have delivered a reasonable ROI. In most cases we hear about how
much product participants in the program buy. But weren’t those largely loyal customers purchasing
even before the points program? Did the points program really provide incremental sales? New
customers? How do those incremental sales compare to the dollars (and time) spent to fund the points program?
I seldom get answers to those questions.
difficult for me to envision a scenario in which Juicy Rewards will truly build “relationships” with customers.
It’s even more difficult to believe that it will produce an acceptable ROI.