do we live in a bribery economy?

Discounts! Coupons! X% off! We all love a sweet deal. I mean, who doesn’t want an incentive to purchase a product or service? It’s what persuades our behaviors as consumers to pick one brand over another – and unless we have a sacred affinity to a specific brand & their products {Apple Macs/iPods or Nike shoes} we’re typically swayed by these offerings.

50_percent_offWhat got me thinking is the social web and how we, as consumers, respond to brands that are utilizing these platforms to build a community but to also attract new customers. Razorfish recently conducted a study on this, stating that special offers drive engagement in social media. Some interesting takeaways:

  • Those who follow a brand on Twitter, 44% did so to receive exclusive deals (37% Facebook)
  • 24% follow a brand on Twitter for customer service (33% Facebook)
  • 64% made their first purchase from a company as a result of a digital interaction

Garrick Schmitt of Razorfish, also stated:

To retain and add customers, marketers need to shift focus from brand awareness and impressions to creating campaigns that drive people to make purchases and spread the word about products and services they use to friends.

While I agree these product-driven strategies have been successful for big and small businesses, I’m curious how sustainable it can be in the long run. Gaining customers through special offers may be obtainable, but what happens when that next, more exclusive deal comes from a competitor?

What I feel has even more value, in addition to this study, is organizations offering exclusive content to their community. Providing value, not just monetarily, but by connecting them with content that is 1 – solving a need through direct communication and 2 – created specifically for that social community. Ultimately, creating longer-lasting customer relationships.

So, I ask you this:

Can a sustainable relationship be built between a customer and a brand – solely through exclusive deals? Or does it require more of a connection, driven by not just $, but through content that provides value and engages the community outside of the product itself?

15 comments On do we live in a bribery economy?

  • You know I’m going to agree with you that content trumps deals any day. Content builds long-term relationships, while deals create one-time buying opportunities. While that might work for the short term, constantly turning over your buyership (I think just made that word up) just to get a buck does nothing for your business’ long haul.

    The one thing I’d argue against Razorfish’s study is I think people respond to deals AND to regular reminders. It’s not just about discounts; a brand also breeds awareness by participating in networks that provide constantly streaming updates. Again, so much information is coming at us, you know? I’ve become aware of brands, products and services, or have been reminded of them, because involvement in a steady stream of data flow means I’m going to see content/deals probably a few times a day, not just once in a monthly email.

    Deals will bring people through your door; valuable content and connection will keep them coming back. No question. Without content you’re just competing with the best deal of the day, right?

    • You summed it well in the end – that the deals will bring people through the door but the content and relationship building aspect of it is what will keep them coming back in the long-term.

      It’s the combination of both within a company’s strategy that is a best fit and is what will help them sustain these customer relationships longer.

      Thanks for your great thoughts, as always, T!

  • I certainly don’t want to be the advocate for deals and more deals, and any brand that relies exclusively on bargain marketing isn’t going to go very far. And I agree with both you and Teresa: Razerfish’s takeaway is incomplete.

    Discounts and giveaways may be a good way for brands to attract attention and lure consumers to give them a try. But without value no one buys twice.

    I think engagement is a whole different conversation, because you can have a successful product without it (i.e., I’m not passionate about toilet paper, but I typically buy the same brand). But it’s becoming clearer and clearer that while you can buy attention, you have to earn enthusiasm. So I guess that means we don’t live in a bribery economy. (Whew, was worried about that for a minute. :))

    I always love a post that makes me think!

  • Sonny this is great coverage of the Razorfish report. I was going to write about it, but don’t think I’ll bother now. I don’t think a discount-driven program is sustainable in social media, because social is largely a pull medium (for now). It’s more sustainable in email, where consumers get pushed discounts, and can choose to open and act upon them when ready. But even there, I don’t believe “bribing” consumers is a solid long-term approach. The ROI often doesn’t add up when you calculate the cost of the lost margin. Not to mention that once you train your customers to expect constant deals, it’s nigh impossible to wean them away.

  • I’ve been thinking about this all day as a result of my initial, incomplete response to Jay’s post earlier.

    Like the other responses above, I think deals and discounts can be a way to trigger interaction and perhaps prompt people to visit your group or fan page and keep some top of mind visibility. Sure, competitors may post an even better deal, but if you’ve built the brand loyalty and have a quality product, your user is more likely to stick with you and the deal you offer.

    That being said, if you don’t provide good content – a new way to use an existing product or some related information that improves functionality, productivity or quality of life – then all the deals in the world won’t keep someone coming back. There are only so many accessories or items that can be purchased, so the need to provide other value is definitely there.

  • Sonny – this is a great post, and had a similar reaction to the Razorfish study when I saw it released. I agree with you and Jay, though I think I have a few questions to ask…

    1. Can you use these “discounts” to bring in new members to the community?

    2. If you use those “discounts” does that mean the community will forever want those deals?

    3. Is there any irony in the fact that we preach selflessness to companies yet the people we are trying to reach are obviously in it for personal reasons?

    Anyway, thanks for the thought-provoking post.

    • Interesting questions but glad you pointed them out:

      1 – Well, you can definitely bring new people into your community through some form of deal, but are people looking for deals going to stick around to connect within your community? How are companies furthering the relationship past the initial offering, would be my question.

      2 – Interesting perspective that Jason mentioned in his comment actually. If you’re relying on deals to keep people intrigued (which is what they’ll always come to expect then) and not spending the additional time and effort to build an engaged community, then your company should probably reevaluate what they’re doing.

      3 – MUCH irony 😉

      Thanks for the great questions, Chuck.

  • One of the things I’ve noticed more with social media is that more people seem to feel they have a divine right to getting something. While you rightly mention the discount factor, Sonny, I’m tired of seeing anyone and everyone take a complaint to the highest person they can find on Twitter, and get a reduction or free product, as opposed to going the correct customer service route.

    Having a voice is great; abusing it just makes you a douche.

    • You’re right, Danny. It’s an ironic dynamic, as Chuck pointed out, as we look to teach companies to be pure and honest in their intentions within the social space – where on the flip, many of us expect to get something in return just because we contact/complain to these companies on Twitter or other social platforms.

      Hopefully it’s a voice that slowly goes away, but it is prevalent.

      Thanks for stopping by, Danny.

  • Though we use social media to drive relationships in our CPA firm, our clients still want relationships to be real and ultimately face-to-face.

    Offering “discounts” and “promotions” on Facebook usually brings limited results. But constant lunches, value-driven tweets, face-to-face meetings and consistent solid blogging over many years make for happy clients.

    Good value. Thanks.


    • Jason – really glad you shared a real life example at how these different dynamics play out in the community built around your CPA firm. Even more so, I love the importance you’ve put on face to face meetings. It’s important to shift the online community and create things for them in-person that are of value and help further nurture that relationship – showing the long-term effectiveness of that strategy vs. providing periodic discounts.

      Appreciate your feedback!

  • If you believe in treating consumers like just another transaction, discounts & coupons are for you.

    If you believe in real, organic loyalty, you have to engage in real conversations and establish real relationships.

    You also can’t have it both ways.

    Great post Sonny.

  • Whats up Sonny! I come from the school of thought that says absolutely not. The only thing that offering consistent deal sweeteners does is bring the wrong type of crowd to your brand. Once they get into the habit of seeing sweet 50% off this and 30% off that then they’ll come to expect it. And don’t ask me why but without fail these deal seekers seem to be the biggest complainers and whiners out there.

    On the other hand I don’t want to take it out of context. There are instances when something needs to be discounted or when it genuinely fits the brand. There are also times where it would be advisable to do so to reward a great customer.

    Outside of those though using discounts en masse to attract a new or larger audience is probably not advisable unless you’ve got an army of customer service reps on standby.

  • Everything you read regarding social media is about contributing to the conversation. You have to contribute to the community if you expect to be a part of it, and usually with something more than a discount. The only time consumers can’t find a better deal is when they stop looking. By definition, content is what makes you who you are. Good content is what keeps customers from looking further.

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