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 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 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.