Using a Loyalty Program to Drive Sales

Service Brand Management & Product Marketing
Industry Retail
Company A large national retailer.
Situation Retailer has a large number of members in its loyalty program. The challenge for all loyalty programs is to actively engage the members over time. This particular challenge was to find a way to engage a subset of the total membership in a meaningful way to them.
Goal Create customer engagement and measureable sales.
Approach Data from a previous study suggested approximately one-third of the retailer’s customers were fans of NASCAR. The retailer was also experimenting with mini-clubs within the loyalty program.

Using these two data points, we created a NASCAR Fan Club. Special benefits to members were threefold and were directly tied into the sponsorship assets the retailer already owned.

First, club members received inside information about the race team and a monthly letter written by the driver. Second, there were monthly raffle drawings of items related to the retailer’s race program; e.g. autographed helmets, gloves, fire suits; VIP passes to races. Third, members earned bonus loyalty club points on all purchases in the retailer’s stores following any win, top-five, or top-10 finish by their driver in the previous weekend’s race. This last benefit allowed members to earn cash back rewards faster from the retailer.

Members were made aware of the NASCAR Club with two separate email campaigns to all current loyalty members as well as banner ads on the main loyalty program homepage.
Results Sign-ups came in at 60% of expectations, which was a surprise but similar to other mini-club tests. However, sales directly tied to the bonus points on purchases far exceeded expectations, generating $10 million in incremental revenue over a six month period.