Watt International Report - Loyalty Program Marketing

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Watt International Loyalty Report - Our 15 best picks for innovative and effective marketing in loyalty programs.

Text of Watt International Report - Loyalty Program Marketing

  • Building Brands. Building Business.

    Loyalty Program Marketing

  • 74% of consumers somewhat or strongly agree that, retailers need new and better ways of rewarding loyal customers

    Ideally, loyalty programs need to affect, impact and influence the shoppers experience in positive, meaningful ways.

    Loyalty programs at many retailers are focusing more on rewarding the shopper for coming into the store on a regular basis (Starbucks, Target), rather than trying to incentivize the customer to return to the store to buy more via a coupon.

    Using a blend of traditional tactics and new media, loyalty programs will continue to become further customized to suit the individual shoppers needs.

    The significance of shopper loyalty programs to the retailer

  • What shoppers want 70% of program members want to see more discounts and savings from loyalty programs 58% want better personal benefits and services

    More than 64% of consumers want to receive information and notifications via email. However, they are tired of irrelevant and excessive communications.

    Among a list of negatives associated with loyalty and rewards program membership, these are the top three: Too much spam and junk email: 44% Too many conditions and restrictions: 38% Rewards that lack real value: 37%

    Most customers (60%) say they learn about programs through retail or point-of-sale engagements.

    Loyalty program effectiveness

  • Most marketers do not fully explore and leverage their customer data sets

    Only 13% of marketers say that they have been effective in leveraging loyalty and brand preference among club members

    Basic demographics: 73% Location of members: 68% Brand loyalty and attachment: 27% Satisfaction levels 33% Product preferences: 38%

    Loyalty program marketing

  • These are our 15 picks for innovative and effective marketing in loyalty programs.

    Loyalty program marketing

  • Brand: Target

    Place: US

    Offering: replacing the previous awards program is the new discount program.

    Shoppers using their card for online or in-store purchases receive 5% off. Other incentives include receiving 10% once 10 prescriptions have been filled using the card at the Target Pharmacy.


  • Brand: Sobeys Club Card

    Place: Canada

    Offering: The Sobeys club card works in affiliation with Aeroplan, with members collecting 1 point per dollar spent at Sobeys stores.

    Club Sobeys points can be converted at any point to Aeroplan Miles at a rate of 2 Sobeys point to 1 Aeroplan Mile.


  • Brand: Loblaws

    Place: Canada

    Offering: Use of the PC Financial debit card will earn 5 points to the dollar, 10 points for PC MasterCard. Every time a customer checks out at a Loblaw store, a cashier circles the area on the receipt that highlights the amount of PC Points you could have earned (in this case 250), and invites you to join. PC Financial acts almost as a full service bank, offering mortgages and various types of insurance.


  • Brand: Cineplex/Scotiabank Scene Card

    Place: Canada

    Offering: A Scene card from Cineplex will earn holders 100 points with every movie they attend. In conjunction with Scotiabank, there is a Scene debit card and Visa card. The debit card earns users 1 point for every $5 spent at any merchant. Opening an account earns 2,000 points, or 2 free movies. The Scene Visa card earns 1 point for every dollar spent. Points can also be used toward purchases of videos from the Cineplex store, and card gives members 10% off of concessions.


  • Brand: Payback

    Place: Europe

    Offering: A retail loyalty program for several retailers that carefully uses personal information and purchase history to enhance customer experience. Trending data is also utilized to develop new products.


  • Brand: Wal-Mart Credit Card

    Place: US

    Offering: Starting a WM Visa account will earn you $20 back initially. Shoppers earn up to 1% cash back on all purchases. Using the card at participating Wal-Mart gas stations will save shoppers 3 to the gallon.


  • Brand: Kmart/Sears

    Place: US

    Offering: Earn Rewards on qualifying purchases at

    Sears, Kmart, Lands' End, sears.com, kmart.com and mygofer.com

    Spend Rewards at participating stores or save them up for something special

    Earn bonus Rewards during exclusive promotions throughout the year

    No-receipt-required returns on purchases at Kmart and Sears stores

    Win great prizes with Kmart K'Ching Surprises at Kmart Stores


  • Brand: Kmart/Sears Christmas Club

    Place: US

    Offering: Instead of functioning like a credit card the Christmas card allows users to add value beforehand.

    Providing they did this before mid November 2009, members were entitled to a reward of 3% extra to spend in Sears, Kmart and associated stores.


  • Brand: Best Buy

    Place: US

    Offering: Best Buy offers shoppers the ability to browse and purchase items via the website on their phone, browse and save or receive text alerts for time-sensitive deals.

    In conjunction with Loopt, the location-based incentives app, Best Buy is offering smartphone users loyalty perks and coupons as they enter the vicinity of a Best Buy location.


  • Brand: Tesco Club Card

    Place: UK

    Offering: Receive a 1 voucher for every 100 points collected.

    Tesco is preparing to invest further in its loyalty program, using shopping behaviour data collected through the program to create more personalised offers to shoppers.

    Tescos club card is considered a major differentiator from the other big UK grocery chains.


  • Brand: 4Food

    Place: New York City

    Offering: Customers have the option to create and advertise, via social networking sites, their own version of a burger.

    If that customized burger is selected by any other customers, the originator will receive 25 cents off of any subsequent purchases.

    Orders taken in the restaurant are processed on iPads.


  • Brand: Starbucks (among other retailers) and foursquare

    Place: Global

    Offering: Using the mobile gaming app, Foursquare, users can achieve loyalty points at the stores they frequent. By checking in online as they enter store locations, gamers acquire badges and points. When Starbucks customers acquire a mayor badge, they receive a dollar off their favorite drink, every time they enter the store.


  • Brand: RecycleBank

    Place: Los Angeles; Houston

    Offering: Subscribers use a special ID tag for their home-recycling bins. When collected, the bins are weighed, with the heavier bins gaining more rewards.

    RecycleBank points are redeemed within your account for rewards.

    Rewards are used with partners such as: Coca-Cola, Clorox's Greenworks, CVS/pharmacy, Hearst Magazines, McDonalds, Kimberly-Clark, Purina Pet Care, Bed Bath & Beyond, and Dick's Sporting Goods.


  • Brand: O2

    Place: UK

    Offering: In 2009, UK based telecom company O2 created an added value service for people that use their website to book concert tickets for the O2 Arena in London. The company developed an online area called blueroom which allows clients to get Perk Packs which, in turn, give access to specific amenities at a particular show. Offers for blueroom consumers include priority ticketing, advanced release notice of ticket sales, discounts and VIP treatment at events.


  • Brand: Whole Foods

    Place: US

    Offering: Whole Foods offers smartphone apps that organize shopper needs needs by creating shopping lists according to recipe desires, and filtering choices by kids meals, dietary restrictions, or budget.


  • These are 3 loyalty programs offered by pharmacy chains in North America.

    Loyalty program marketing

  • Brand: Shoppers Drug Mart

    Place: Canada

    Offering: Optimum Card and others

    Shoppers Drug Mart offers the Optimum card, which collects points when the shopper swipes the card at check out. Recently introduced is the VIB program, which is targeted toward new mothers.

    The Optimum points can now also be collected on a MasterCard.

  • Brand: CVS

    Place: US

    Offering: Extra Care card

    Shoppers using their card for online or in-store purchases earn 2% back with every purchase, which eventually adds up to Extra Bucks that are revealed on store receipts every 3 months and can be used toward purchases at CVS.

    Offers and savings are available to those who sign up for email offers and members benefit from periodic double bucks promotions (earn 4% instead of 2%) .

  • Brand: Duane Reade

    Place: US

    Offering: FlexRewards

    Members have the option to redeem points at the $5 level, or redeem at a higher level and earn extra points.

    Double Flex points are offered on a weekly basis.

    Shoppers who become members of any of the DR clubs earn FlexRewards bonus points.

  • To Summarize

    Transforming consumers into loyal customers and, better yet, brand ambassadors, requires a deep understanding of the aspirations and motivations behind the data sets; involving attitudinal as well as behavioural studies.

    As with PL programs, loyalty programs can be tailored to support and enhance the brands core proposition, whether for premium quality and personal service or for low prices and value-based, or a carefully balanced combination of both.

    We would welcome the oppo