Despite being 10 times more costly than e-mail, Gold Points Rewards plans to send out 50,000 postal mail pieces each month during 2003 at a cost of roughly $300,000.
Gold Points — a unit of Carlson Marketing Group, a multibrand holding firm — had largely been using e-mail.
The mailing pieces are part of Jump Start, which offers a 1,000-point bonus to members who have signed up for the Gold Points loyalty program but have not made a second transaction between one and two months after enrolling.
At an estimated 50 cents per piece, the cost will far exceed what Gold Points pays for electronic communications, which runs between 3 and 5 cents each, according to Melissa Engelhart, Gold Points Rewards' vice president of marketing.
The effort marks a serious attempt to combat what Engelhart called “first-time burners” — people who sign up with one of the dozens of participating merchants and then become inactive after taking advantage of the initial benefit. (The merchants include T.G.I. Fridays and Radisson Hotels & Resorts. Next month, they will be joined by selected Food Emporium grocery stores in the greater New York area. Partners like Radisson are part of Carlson Marketing, but others, such as Food Emporium, are independent participants.)
Gold Points currently has 8 million members, about half of whom are considered active, having made at least one purchase within the past 12 months. Engelhart would be happy to send e-mail reminders to all active members, as such efforts cost around a nickel, but it has e-mail addresses for about 30% across the entire membership base and 40% for the actives.
The Jump Start program itself is less than a year old. The first reactivation e-mails went out in two tests of 100,000 addresses each last May and July. The company saw a 36% lift in engagement, whether through an activity that actually earned points, such as a purchase, or through a contact, such as calling a service center.
But this is not the only area in which Gold Points is looking to use traditional mail. It's also bringing back paper account statements, which had been dropped from the program due to cost. Members had been encouraged to track their accounts through the program's Web site (www.goldpoints.com).
Engelhart anticipates that these pieces will consist of an 11-inch-by-17-inch sheet, which will be folded twice to make a self-mailer. Partner participants will be allowed to participate in the messaging for a fee.
Engelhart said that because the program runs on a relatively low margin, traditional mail correspondence outside of the Jump Start program will initially focus on the most profitable members, which likely will be chosen based on their spending level and frequency over the most recent three months.
Even among this group, quantities are limited. Engelhart says only 1.2 million members have earned points — any points — within the past three months. An initial run of 200,000, primarily concentrated in the Northeast and timed to support Food Emporium's participation, is scheduled for March.
In a way, the return to mail hearkens back to the program's paper roots: The Gold Points Rewards Network was launched in 1996 as an electronic reincarnation of the Gold Bond Stamp Co., a points-for-purchase program which debuted in 1938.
