Dannonomics

Running for less than 3 months from August to October, the new promotion from Dannon in the US has an interesting mechanic to encourage trial, reward loyalty and incentivise cross sell.

Entitled Dannonomics, the promotion promises “Delicious yogurt in your fridge. Money back in your wallet” and rewards customers with money off coupons in exchange for evidence of Dannon product purchases. 

The actual mechanism for recognising purchases is relatively laborious, requiring consumers to send in retailer till receipts with evidence of the product purchase, or where not directly identified on the receipt, to include product lids.  Obviously this could have been better implemented using some form on on-pack proof of purchase coupon or code, but the really interesting piece is the reward mechanism itself.

Like the Kellogs promotion in the UK, this promotion requires a number of purchases in order to qualify – not a single on-pack discount or two for one deal – but instead an overall value which requires multiple purchases.  This helps to encourage habit forming behaviours and lessens the appeal of the promotion to simple price switchers.

The value of the reward has also been tuned to encourage not just increased frequency of purchase, but also cross brand purchase.  The more brands included within a claim, the richer the reward provided.  On a single product, Dannonomics provides a 20% discount, rewarding $15 of purchase with a $3 reward.  However this increases to almost 40% back where 3 or more brands are purchased, rewarding $40 of spend with $15 back.

It’s not clear from the promotion initially what the reward value is, but looking at the fine print the reward consists of money off coupons for other Dannon products – further driving consumer spend across the Dannon brands.

A nice feature, and increasingly becoming a “staple” for all brand sites is the Share and Send to a Friend functions.  These allow the promotion to be published on mainstream social sites like MySpace, twitter and facebook as well as bookmark sites like Digg, StumbleUpon and Delicious.

According to Michael Neuwirth from Dannon, Americans consume “less than a quarter of the yogurt” eaten per capita in European countries, so there is obviously room to improve and a strategy that looks to increase frequency of purchase and drive trial across categories seems a good approach.  With a reported 67% of US consumers also planning to use coupons more during this downturn, the reward mechanism obviously taps into this increased demand.

However, as promotions go, it has little longevity, either in being able to track ongoing purchase behaviour, or in encouraging ongoing brand loyalty once the promotion is over. 

The loyalty mechanism also does little to increase brand engagement – yes it’s rewarding back in category, but this could work harder to also tie into the overall brand proposition.  For Dannon, their proposition “Today. For Tomorrow” focuses on the benefits that yogurt can bring within a healthier lifestyle.  The promotion could have included rewards which aligned within this proposition such as money off for sports, gyms or other health and lifestyle related areas.  Helping to reinforce that yogurt helps to promote long term health.

As an example of this, the Great Rewards Round Up promotion from Anchor Butter in the UK has an on-pack collector scheme which sees consumers collecting “cows” (and naming them) into a field to build up a herd which can then be exchanged for outdoors related and cow themed rewards.  The whole programme is looking to tie into the “Free Range Butter Company” proposition where the cow’s are “free to roam”, and hence need to be collected together as part of the scheme.

The Dannonomics promotion gets an overall lean forward rating of 3 with the weaker areas being that is has no real longevity and creates little excitement.  It also scores lower on brand alignment – whilst recognising that both the earning and redemption are all within the brand, there is little to deepen the relationship with the brand or reinforce the proposition.  That said, what is unique about this promotion is how it encourages cross-sell within all Dannon products – something which many brands find hard to achieve.

	Score (0-5)
Encourages Acquisition	5
Drives Repeat Purchase	4
Programme Longevity	1
Brand Alignment	2
Creates Excitement	2
Enables Interaction	3
Overall Lean Forward Score	3