Best Buy Rolls Out New Loyalty Program Nationwide
(Direct Newsline)—Best Buy Co., Inc. is introducing Reward Zone, a new loyalty-marketing program, with a 5 million piece direct mail effort to its existing customers.
The sign-up letters were mailed last Wednesday. The campaign is also being supported by a series of television commercials, a freestanding insert, in-store signage and an employee-training program.
Reward Zone marks the first time Best Buy has attempted a loyalty program. The nationwide rollout follows a yearlong pilot test conducted in Southern California. That program, which initially focused on the company’s entertainment offerings (music, movies, video games and software) has been expanded to encompass all of the chain’s offerings, according to Karen Maurice, Best Buy’s director of relationship marketing.
The 5-million-piece mailing consists of three major tests: 1 million informational pieces, inviting the customer to come into the store and register for Reward Zone. Another 2 million feature a clip-out coupon that the recipient brings to a store in order to receive a membership card, and the rest contain an actual membership card.
Reward Zone starts with a 375,000 top customers automatically enrolled into it, while another 65,000 joined during the pilot test. Best Buys waived the program’s $9.99 sign-up fee for its top customers.
The program awards 100 points to consumers for every dollar they spend at a Best Buy store. Participants receive a $5 reward certificate for every 12,500 points they earn. Members receive quarterly statements that detail their account activity and provide information about other offers.
Soft benefits include exclusive game demonstrations, product giveaways, previews of upcoming CDs and movies via Web streaming and participation in You Be The Critic, a program that allows them to critique new artists.
The pilot program exceeded the company’s expectations in terms of increasing sales, profit and frequency of visits, Maurice said. The program went live nationwide on July 13. From July 20 through Aug. 23, the company will give away $25,000 per day through a sweepstakes. Participants earn one entry for signing up, and another chance for every transaction they make.
“The hard and soft benefits make it a truly differentiated program,” said Kelvin Taylor, president of Frequency Marketing Inc. “Even if other companies could replicate all the elements they would simply be following in Best Buy’s footsteps. At a minimum, Best Buy will have a first mover program.”
Best Buys is using the Milford, OH-based Frequency Marketing’s Loyalty Solutions Platform as the program’s technology backbone. FMI also assisted Best Buy’s efforts in rolling Reward Zone out nationally.
