Recent research by Experian Marketing Services showed that consumers are very demanding of the loyalty programs that they are a part of. They expect brands to clearly show how well they understand them as individuals, while also demanding clear discounts and benefits in exchange for being part of the loyalty program. The reward for brands is a long term relationship with customers through an incentivised program that reacts in real time to changes in customer behaviour and preference. An effective loyalty program acts as a mechanism continuously providing brands with customer insight and feedback on their loyalty program.
Specialist storage and home organisation retail business, Howards Storage World, was keen to better focus its marketing efforts and re-engage customers already part of its loyalty program. Howards worked with Experian to segment its member base into five categories based on engagement with the brand. These categories ranged from ‘super members’, who regularly shopped in-store to ‘non active’ members, who had joined the program but not activated their membership.
The brand then implemented a national marketing communications campaign to re-engage members through targeted and personalised communications which were developed for each segment, based on customer behaviour and data. These automated marketing communications were tailored for distribution across existing channels already in use by Howards as part of its loyalty program.
For example, Howards ‘super members’ were sent a $20 voucher and anecdotal feedback from members showed many were ‘surprised and delighted’ to receive their vouchers, other results included:
- 34% voucher redemption
- Average spend was 16% higher than non-members
- Increase in revenue of over $105,000.
The best results were seen within the ‘semi dormant’ membership group, who had not shopped for 12 months or more. Within this group alone,
- Over 1,500 vouchers were redeemed
- Average spend was 37 % higher than non-members,16 % more than super members
- Increase in revenue of $108,000.
Additionally, a small group of ‘non-active members were sent tailored communications reminding them that to receive benefits of the loyalty program, they must fully activate their membership. 10 % of this group responded and are now active members.
The campaign has resulted in over $250,000 in revenue and up to 48% redemption rate in vouchers. The results are compelling and show that online and offline engagement remains an effective approach for retailers. The business now plans to roll this program out across all of its stores.
Howards’ campaign is a great success story that proves brands who focus on effectively engaging existing customers with tailored communication will find it is possible to drive customers back in store and increase sales despite a tough retail market. Brands who consider their loyalty program as an articulation of their customer understanding rather than a communications platform will find they have a member base that is consistently engaged and more likely to return to their brand. For further information on this campaign, read the complete case study here.