Coke Zone rewards closure shows need for more than points
Coca-Cola’s decision to close the points based loyalty scheme Coke Zone demonstrates brands wanting to build loyalty from consumers need to look beyond simple collection and redemption metrics for engagement.
Coke Zone, which launched in 2008 to great fanfare, allowed members to collect points from Coke, Diet Coke and Coke Zero packs and redeem them for rewards and prize draws. As of 16 October, Coke Zone members will not be able to collect or redeem points. The brand will now focus on offering fans “unique experiences” through Coke Zone.
The points element, which was managed by Nectar owner Aimia, has been disbanded because the number of customers visiting the digital hub to collect or redeem points. (See box).
A Coca-Cola spokeswoman says it was simply meeting the needs of customers, adding “[A review of site use found] the vast majority of people visit Coke Zone for news, competitions and the chance to win great prizes and experiences, rather than to collect and redeem points in exchange for gifts like t-shirts and headphones.”
Stuart Evans, general manager of loyalty firm ICLP UK, says Coke Zone can still add value but needs to move towards a gamification led platform that allows consumers to take more control over how they use it rather than prescribing their behaviour and pushing them towards points.
He says: “If you are going to do something in the loyalty space, your proposition needs to be a 360 degrees view of the brand. It needs to be about content, games, interactivity, videos and even better you need to push a scheme out to where your audience is.”
Elsewhere, Unilever is preparing to launch the PG Tips Cuppa Club loyalty scheme which invites consumers to collect points from packs and redeem them for tea-themed treats such as 2-4-1 afternoon tea and Oliver Bonas tea cups. The launch will be supported with TV, digital and in-store activity from 20 May.
Enzo Rodia, head of UK marketing at loyalty specialist Maximiles UK, says points based systems such as PG Tips and Coke Zone can still work.
He adds Coke “found it difficult” to engage customers through its rewards offering because the mechanic was “un-youthful” despite targeting a young audience.
FMCG brands can improve engagement, he adds, by increasing spend and incentivise behaviours alongside gleaning insight from their own points based schemes, but advises brands to consider the user experience and ease of use alongside the need for a large variety of earning opportunities and desirable rewards.
Viewpoint Rosie Baker:
A scheme like Coke Zone is expensive to run and while there will be the obligatory backlash from dedicated users, if Coke isn’t getting its money’s worth out of the points scheme, it should invest its substantial budget where it can get more return in terms of brand engagement or direct sales.
Points used to be the go-to mechanic for a loyalty scheme but technology, mobile and changing consumer behaviours mean it’s not as relevant as it used to be and it doesn’t offer the instant gratification most consumers want.
The other downside to an FMCG brand launching its own scheme like this is it actually requires consumers to work for their rewards. To claim on Coke Zone you had to keep the codes, go online, type them in and then finally redeem them. For a low value purchase like a can of Coke the benefit/effort balance is tipped the wrong way.
The beauty and simple appeal of established points schemes like Boots Advantage, Nectar and Tesco Clubcard is that shoppers don’t need to do anything extra to earn points. It’s added value for no added effort.
Visits to Coke Zone UK
March 2012 – 238,000
April 2012 – 124,000
May 2012 – 336,000
June 2012 – 88,000
July 2012 – 360,000
August 2012 – 120,000
September 2012 – 165,000
October 2012 – 93,000
November, 2012 – 166,000
December, 2012 – 205,000
January 2013 – 74,000
February 2013 – 87,000
March 2013 – 111,000