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Federal Trade Commission Rebate Debate Workshop

 For the Record

 

Please find below a brief summary of Mr. Stinchfield’s post-workshop comments on the FTC’s Rebate Debate conference in San Francisco on April 27th, 2007

 

  • The Federal Trade Commission should be commended for organizing and hosting this event. Jeffrey Klurfeld, Eileen Harrington, Matthew Gold, Kerry O’Brien, Linda Badger, Lesley Fair, Dean Graybill, and Joe Mulholland should also be acknowledged for a clear and deep commitment to maintaining such a refreshing balance in considering the interests of consumers, industry and government.
  • While 45% of the workshop participants indicated that “consumer error” was the number one issue in consumer rebates, it should be noted that consumer error rarely occurs without good reason. Marketers should be encouraged to perform root cause analyses to identify what role they play in causing consumer confusion. Our research suggests that approximately 98% of consumer errors are preventable by the marketer. With that said, becoming expert at increasing efficiency, effectiveness and customer satisfaction on rebates and other marketing initiatives, is not now, nor ever will be, a core competency of any marketer. Marketers must take the initiative to identify resources that can assist them to do so. If industry-at large does not focus on continuous improvement of customer satisfaction, it risks having rebates and other marketing initiatives potentially regulated out of existence. For assistance in improving customer satisfaction and marketing efficiency, please e-mail hal@promotioninsights.com .
  • If imitation is the sincerest form of flattery, I was truly flattered by PMA’s borrowing and using much of my content in their best practices and guidelines presentation.
  • There is a fundamental flaw in the widespread perpetuation of    percentages quoted of “unredeemed” rebates. Many sources have stated that forty to sixty percent of all rebates go “unredeemed”. To quote such a rate is not only inaccurate, it is also misleading. Rebate redemption is not calculated with only one metric, it is calculated using two separate and distinct metrics. It can only be measured accurately by using a percentage of products sold and a percent of mail-in certificates distributed. It is irresponsible to quote any redemption rate without specifying the media and considering its influence. For instance, if a mail-in certificate is an offer requirement, and one hundred certificates were distributed, but a thousand of the rebated products were sold, the number of “redeemed” rebates could never be greater than 10 percent. Thus, without using both metrics, the calculation is inherently flawed. With that said, the only condition under which one percentage or calculation could be used is in the rare situation in which the mail-in certificate is on package wherein the quantity of mail in certificates (offers) is identical to the products sold. For assistance in calculating accurate response rate estimates, please e-mail hal@promotioninsights.com
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