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August 25, 2003 - Strategy Magazine
Special Report: Premiums & Incentives

Random acts of kindness
Robust databases bring 'surprise and delight' premiums to a whole new level

by Sara Minogue
page 15

Eleven years after the phrase was first coined, but only a few weeks after Oprah latched onto it, the notion of "random acts of kindness" spread beyond the Berkeley hippies who invented it and grew into a sprawling network of not-so-random events, clubs and organizations. By 1995 it was a full-blown national movement, crystallized in Random Acts of Kindness Day now celebrated on Feb. 17.

The fact that people like to be surprised came as no surprise to marketers. Many use their own random acts of kindness to gain long-term brand loyalty from fickle customers. Modern database management is helping them do it with maximum effectiveness.

"Now they're called 'surprise and delight' but in the direct-marketing continuity business, they used to be called 'stamina premiums,' which I always thought was a very great phrase," says Trish Wheaton, president of Toronto-based Wunderman.

Stamina premiums often meant sending customers a free gift after they'd reached a certain milestone with the company, such as the fourth volume of a Time-Life book series.

"Out of the blue you would receive a premium, and it might be book ends or something. It always had affinity with the product, but it was also delivered at the point in the consumer life cycle where customers were most vulnerable to defect," says Wheaton.

Unexpected giveaways or offers remain a popular marketing tool. Sign up to Club Monaco's mailing list next time you're in the store and it's just a matter of time before a 10% off coupon shows up in the mail. Toronto design boutique Preloved runs a similar program as a means to get people who come into the store to come back. Volkswagen has been known to send a tin of cookies to new owners six months after purchase.

But recently, the advent of customer relationship management (CRM) has revived the practice at a whole new level. Companies who are now keeping an extraordinary amount of data on their customers can not only reward them at key points in the customer life cycle, but also tailor those rewards to the individual.

Grocery Gateway customers in Toronto know all about the phenomenon. Or maybe not. All they really know is that sometimes, unexpectedly, the company surprises them with free gifts.

The company's marketing policy is to send coupons at customer milestones, such as their 25th or 50th online order. Sometimes the reward comes in the form of electronic coupons, redeemable online at your next grocery purchase. Other times people receive a gift basket full of Grocery Gateway products, tailored to their wants and needs according to past purchases. The key is that the customer doesn't know what triggers the reward.

"There are two mind-sets about marketing," says director of marketing Scott Robinson. "One is fostering an expectation and delivering on it. Then there's the unexpected customer appreciation tactics. We do both. It's a bizarre way of saying thanks a lot for your business, and we really value it."

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