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Incentives Dangling on Facebook

“I’m seeing lots of spin- offs of Groupon. People are trying to riff off our model,” said Rob Solomon, the president of the company. Groupon is one of the most successful online incentive programs with 25 million subscribers in 29 countries, considering the company has only been around since November 2008. While online incentives seem to be catching on, marketers are trying out this new approach- online incentive when it comes to winning followers as more people “like” a brand on social networking, like Facebook.

The major reason why more and more manufacturers are flocking to online promotions is to avoid successfully the “push” trade promotion via retailers, but “pull” promotions directly to end- consumers. Manufacturers can save a large amount of cost, and have more control of the promotion to consumers without limitation of location and various retail stores. Most importantly, online coupons and incentives give marketers the opportunity to connect directly with the end- consumers and build relationships with them. Intel has been successfully conducting ingredient marketing for their business clients towards end-users for a long time. By the way of establishing a consumer brand and attracting more consumers for their business clients, Intel differentiates itself from the competitors effectively and in turn attracts more clients and business of its own. Nowadays social networking is creating wonderful channels for these marketers to build a reputation among consumers and execute the ingredient marketing.

While online promotions on social networks seem to be attractive to marketers, the question remains back to the old promotion dilemma: Despite a good reaction of the promotion among customers, does it benefit or harm the brand?  For example, consumers “like” a brand just for the money, and there is nothing to do with the brand. The answer comes with recalling again the social media’s function, which is the only useful integrated marketing tool serving the brand. The power of online promotions can only be recharged by combining other marketing tools. It is like a show. Marketers use online incentives like a ticket to get people to see the show. However, whether the audience likes the show or not totally depends on the show itself, not the ticket. Besides winning more followers and grabbing more sales, the main function of online incentives on social networking is to create a sense of community,  to interact and to engage in dialogue with the consumers.

ConAgra kicked off a “progressive coupon” offer on its Healthy Choice Facebook page. Users who “like” the brand received a coupon for 75 cents off their next Healthy Choice purchase. ConAgra later coaxed more consumers to join its Facebook page by dangling a “buy one, get one free” coupon offer.  Only within 25 hours after launching the online promotion, the Healthy Choice Facebook fan base nearly tripled and it “continues to grow,” according to the report of Brandfreak. The couponʼs value grew from 75 cents to $ 1.25 and, three days later, reached its “buy one, get one free” goal. It is not sufficient to prove the success of the online incentive program in spite of such convincing data. Rather than simply posting the coupon online, ConAgra followed up with a newsletter to drive attention and dialogue on how Healthy Choice is a great value for the money for the existing consumers and online community. Said by the company, since the online incentive kicked off, the opt- in rate for the Health Choice e-mail newsletter also increased.

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