Loyalty Program Marketing

Part
01
of three
Part
01

Case Studies - Successful Brand Loyalty Marketing Programs

Rack Room Shoes, Nike, and Starbucks are three examples of brands that have successfully optimized their loyalty program messaging. The case studies below highlight how targeting, personalization, gamification, and the inclusion of details about earned and expiring rewards in loyalty program messaging can lead to improvements in engagement and conversion.

Rack Room Shoes

  • Rack Room Shoes, a family footwear retailer, first introduced a loyalty program in 2013. Sending personalized communications to its 6 million members proved difficult for Rack Room Shoes because the retailer had no centralized repository of data back then.
  • There were multiple data sources to pull from, such as point-of-sale (POS) terminals, SMS lists, and loyalty-specific data sources, and this made coordination, personalization and targeted marketing more time-consuming than necessary. Outgoing messages became ineffective and impersonal as a result.
  • According to Scott Baldt, Rack Room Shoes’s senior director of omnichannel marketing, the company had lots of data, but the data was not actionable.
  • To improve the situation, the company availed of Salesforce’s Marketing Cloud, a cloud-based solution that enabled the company to merge data from all customer touchpoints to a single data repository.
  • With this solution, the company is now able to use online and in-store transaction and fulfillment data in designing its customer communications. The company is also now able to perform subject line testing, customer segmentation analysis, personalization, and content delivery more efficiently.
  • Several statistics indicate that the company’s decision to use this solution has paid off. Since the solution was used, the number of loyalty program members has increased to 14 million.
  • Also, even though the number of email recipients has significantly increased, the time the customer relationship management (CRM) team spends on email design and delivery has decreased by 40%.
  • Engagement has doubled, and click rates have improved. The company has also shifted from sending an average of 2.3 non-targeted email messages a week to sending 4.3 targeted and promotional email messages a week.
  • Over 70% of the company's in-store sales can be attributed to the rewards program, and according to Baldt, this percentage is still climbing, thanks to automation around earned rewards, points available, and expiring rewards.
  • By adding information about earned rewards, points available, and expiring rewards to its messaging, the company is able to provide its rewards program members with more relevant email, SMS, or push notifications.

Nike

  • Nike is also building customer loyalty through personalized and targeted messages.
  • NikePlus Unlocks, offered on the Nike app, gives users access to event invites, shoe exclusives, birthday bonuses, chatbots, and music playlists. Nike designed this application in a way that “the more a customer interacts, the more Nike can personalize and offer more relevant products and experiences.” Customers are segmented according to their interests.
  • According to Adam Sussman, Nike’s chief digital officer, members are engaging twice as often as before as a result of this personalization.
  • Through geofencing, Nike is able to send a notification to a member if that member happens to walk by a store that carries a product on his or her wish list, and give that member the option to reserve the product immediately.
  • Sussman notes Nike has seen its conversion rate increase forty times as a result of geofencing.
  • To increase engagement among its most loyal fans, Nike also launched an app called Snkrs. Through this app and technologies such as geofencing and augmented reality, Nike sends its superfans notifications about limited-edition sneakers and sets them on a virtual treasure hunt, a game akin to PokemonGo.

Starbucks

  • Starbucks sends notifications it calls Star Dashes to gamify how its rewards program members spend their money on Starbucks products.
  • Through these notifications, Starbucks issues challenges that enable members to earn additional stars.
  • Typical Star Dashes ask members to try a variety of items in a span of days or buy from stores at off-peak hours a number of times in a week in exchange for stars.
  • In the case of Starbucks, gamification was effective as it was able to encourage its members to interact regularly with its brand.
  • Several members attest to how addictive the program is. One member says this tactic is effective because there were many instances where she said to herself “I don’t need a coffee, but I’m gonna get double points for this, so I’m gonna go spend the extra money.”
  • Another member admits she is a slave to the Star Dashes and is, in fact, carrying another device so she can do her husband’s Star Dashes as well.
Part
02
of three
Part
02

Best Practices - Loyalty Program Marketing: E-Mail Subject Lines

Two best practices for loyalty program marketing specifically related to e-mail subject lines include referencing something contextual into the subject line to drive an increase of emails opened and going a bit rogue by introducing jokes and puns in order to raise curiosity with readers.

Referencing something contextual

  • According to Loyalty Lion, a data-driven loyalty and engagement platform that has so far powered over 400 companies with loyalty programs and saw 14.5 billion loyalty points claimed, one of the key subject lines best practices for companies running loyalty program marketing is incorporating references of something contextual in the subject line.
  • By definition, contextual email marketing is "email marketing content that is personalized and relevant to each of your customers based on their location, local weather, past purchases, time, devices and more at the moment of open."
  • The reason why this is considered to be the best practice for loyalty programs marketing is the push it leads to when it comes to the open rates of emails. For example, including a reference to an introduction to a contextual topic such as politics or pop culture will result in a 7.36% increase of emails opened while an invitation based on the similar principle will result in a 9.45% increase of emails opened.
  • Loyalty Lion reports that companies such as The Hummingbird Bakery, 100% PURE, Pulse, The Chive, Skinny Dip, and Beauty Bakerie all use this type of practice for increasing the rate of loyalty marketing emails opened.

Going a bit rogue by introducing jokes and puns

  • The second most recommended practice by Loyalty Lion is to introduce puns and jokes based on the brand's personality.
  • The reason why this is considered to be the best practice for loyalty programs marketing is the fact that jokes and puns raise curiosity with readers and are more easily spotted in the lines of emails daily received by customers. Hitting the right spot regarding curiosity within loyalty program customers can achieve up to 21% increase in open rates.
  • Brands such as Warby Parker ("Pairs nicely with spreadsheets") and OpenTable ("Licking your phone never tasted so good") use funny subject lines to boost email open rates.

Part
03
of three
Part
03

Best Practices - Loyalty Program Marketing: Push Notifications

A 2018 survey indicated that 52% of respondents believe that push notifications became better compared to how it was few years ago. It has an average click-through rate of 7.8% and is considered to improve brand loyalty. When it comes to loyalty program marketing, the industry best practices that are related to push notifications include geo-targeting or geofencing, personalization, and having the right timing.

Geo-targeting or Geofencing

  • For companies running loyalty programs and has physical locations, geo-targeting, geofencing, or location tracking is considered to be the most valuable trigger for push notifications.
  • It is done by setting a specific geographic area through geofencing or beacons by using RFID signals or GPS coordinates to "fence" an area. When a user moves within the set geographical fence, the devices called beacons are triggered to send push notifications.
  • Since most people use their smartphones for everyday interactions, geo-targeting activities are used to send push notifications to update, inform, and reward a loyalty program user.
  • It can be done even by just measuring the frequency of visits to a certain store and rewarding them for such loyalty or simply greeting them while in-store.
  • Flok is a platform that uses the customer's location. It has a location beacon that detects when a loyal customer walks in and then it sends a welcoming push notification.
  • Another one is "The Store", that uses Antavo's customer loyalty management app which helps identify customers in-store. Customers who have a digital loyalty card will be sent push notifications detailing the store's latest sale event or members-only benefits like an express check-out lane.

Personalization

  • Demographic data, previous interactions, historical records, and historical behaviors are used to personalize push notifications for loyalty programs.
  • It was found that about 54% of users prefer well-targeted and personalized push notifications compared to the generic ones.
  • 49% of loyalty app users say that push notifications that are triggered based on their personal preferences cause them to use the app more.
  • Personalized push notifications (e.g. current points update, birthday greetings, etc.) has a higher click-through rate of 4.75% compared to those that are non-personalized at 3.17%.
  • Generic communications that can be done either through social media or email are not good ingredients of a catchy push notification.
  • Push notifications that truly understand the customers' sense of worth and value give a huge impact on customer loyalty; a survey result considers customers to be loyal "not to companies, but to beliefs".
  • Domino's Pizza is an example of a company that keeps its loyal customers engaged and crave for its products by sending promotional push notifications informing them of the latest deals.

Timing is Everything

  • Since push notifications are received by loyal customers in real-time, it is best to send them when customers are most likely to act.
  • A study suggests that the best times and days to send push notifications are in the "afternoons on Tuesday, Wednesday, Thursday and Friday".
  • Push notifications used in loyalty programs are aimed to keep them engaged, therefore they should be sent within the "safe hours", based on how it will work best not just for the company but more importantly, for the customers.
  • A study about the behavior-based push notification campaigns in 2018 advised that one push notification triggered by behavior tracking per week is a good practice as 90% of people are willing to receive them without choosing to disable notifications.
  • About 22% of customers think that 2-5 push notifications received per week might cause them to stop using a brand app.
  • According to experts from different industries, as summarized by iZooto, here are some of the best times when push notifications are to be sent by industries who have the higher probability of having loyalty programs to customers:
Sources
Sources