Evan Schuman's StorefrontBacktalk

Finally, there’s the problem of changing strategies in midstream. Many companies may have initially liked the approach of a chaotic period. That’s where chains encourage people to do anything they want, and then use their creativity and see what happens. “If we don’t like it, we can always change the rules.” But that may not always be as easy as you think.

The rules are essentially a contract, and customers will rely on your promises of rewards and representations for changing their behavior. Think about the problems airlines have when they try to change the rules regarding their frequent-flyer programs. If you collect information from a customer under a certain set of rules (like a privacy policy or rewards program) and then change those rules, do you have to give customers their information back? It’s not really clear.

This is why any new rewards program, and virtually any new entrée to the Internet that creates a public face for the retailer, should be reviewed by legal counsel and by any appropriate risk committee to see not only the benefits of the new program but the legal, regulatory, privacy and risk profile it entails. Even though it’s the wild, wild West, we still need to have some basic rules. And hey, let’s be careful out there.

Because social networking is such a new field, retailers are not sure exactly what type of customer behavior to reward. Thus, retailers will reward customers simply for “interacting” with them (or their agent) without considering the nature, scope and extent of that interaction.

This would be like rewarding customers for interacting with salespeople, even if that interaction is threatening, abusive or not productive. Just because it is happening electronically, does not mean it is helpful to business. Moreover, not every “page hit” is good for business.

The trick, therefore, for retailers is to find a way to incentivize “good” behavior while, if not punishing, at least not rewarding “bad” behavior. Retailers that reward any contact may actually be encouraging customers to engage in flame wars, criticism or simply juvenile activities in return for certain reward points or other incentives. And if retailers reward customers for every mention of their name in a blog post, enterprising consumers will simply automate the process of injecting the name, often inappropriately, into content as a non sequitur. The retailer then will be forced to pay out the rewards and will achieve little, if any, benefit.

On the other hand, if retailers are too restrictive in what they reward, or if they only reward the type of activity they think in advance will be helpful, then they have failed to incentivize innovation and new thoughts. The goal here is to get creative and entrepreneurial people to use their own time, energy and resources to come up with new ways to help market a retailer’s products.

Thus, if retailers reward only Twitter postings and blogs, they won’t capture the guy who makes a brilliant YouTube video or posts a photomontage promoting the company on Flickr. Conversely, what does a retailer do about the customer who posts a picture of his drunken cousin passed out on a picnic table wearing a T-shirt with its corporate logo? Is this good publicity or bad? Frankly, I’m not sure.