The problem with once-in-a-lifetime occasions is that they’re rotten candidates for generating repeat business. The Reward Club, a loyalty program from commemorative mementos marketer Things Remembered, is turning this trend around.
New members are more than twice as likely to make additional purchases (24%) than non-members (11%), and their initial purchase amounts have jumped from the mid-double to the mid-triple-digit dollar amounts.
Longer term, customers who enrolled spent, on average, 13% more than lookalike customers who did not join during the program’s first year.
The Reward Club had signed up nearly 700,000 members as of mid-September 2003, one year after its rollout. The enrollees make up roughly 10% of the company’s 7 million active customers.
Granted, the program self-selects the best customers. While only 3% of those making purchases under $25 elected to join, 42% of those spending $100 or more did so.
Why did the company need a loyalty program? Blame it on the bridesmaids. For Things Remembered, bridal parties represent an ideal market. And the personalized gift marketer sold many an engraved jewelry set, Waterford crystal item or picture frame for milder bridesmaids, or customized flasks and Zippo lighters for the wilder ones.
The problem was that while brides and bridesmaids spent heavily when they made purchases, they simply weren’t coming back for more. In a benchmarking study, Things Remembered found that repeat buying rates for its products were considerably below the industry norm.
The program’s goal was to increase repeat traffic. As Elisa Krause, vice president of analytical solutions at program designer MBS noted, “average sale size wasn’t as much a concern as frequency. Getting those people to come back was the challenge.”
Things Remembered has done so through a series of customized communications that introduced members to the breadth of Things Remembered’s offerings, as well as using checks to reward purchase behavior.
“The key element of the program is educating the customer as to all of the reasons they could come back,” said Terry Mulhern, director of marketing for Things Remembered. “Valentine’s Day, kids’ gifts, pet gifts. The point of the program is to communicate those benefits.”
By its very nature, Things Remembered has a leg up on data capture, which in turn feeds its ability to create relevant messages. Because nearly all the items ordered from the Highland Heights, OH gift marketer are personalized, customers have to fill out work order forms before receiving their purchase.
The program also captures “occasion codes”: specific events that led to the purchase of a gift. This allows the marketer to know whether an item bought, for example, in June was for Father’s Day, a new graduate or an anniversary, rather than having to infer that information.
Why is this important? “Having the true occasion means we can speak to motivational and attitudinal components [in follow-up communications],” said Krause.
The Rewards Club captures data from most areas of customer contact, including point of sale, order processing, fulfillment and online interactions. MBS also maintains both traditional and e-mail promotional history records for each customer at its facility in Central Islip, NY.
Participants are issued a magnetic-strip card that has their ID number printed on it. They’re sent monthly letters that include information on new merchandise, upcoming sales and specials, and if they’ve spent at least $100, a $10 reward check is attached to the bottom of the note. The checks have a 90-day expiration period to cut down on Things Remembered’s long-term liability, and participants can’t earn more than $50 in rewards in a given month.
To encourage new customers who may not reach the threshold with their first purchase, The Reward Club sends a 20% savings certificate to those if the initial purchase is under $100.
Members also receive various opportunities for private sales, as well as access to a toll-free hotline.
“Part of the reason we shied away from punch cards was that they weren’t part of the brand identity we wanted to portray,” said Mulhern.
“Punch cards are something a sub shop or coffee shop would do.”
The Reward Club carries a one-time $5 enrollment fee, but Things Remembered is currently offering it for a $2 on-sale price. The membership expires only if a customer lets 18 months go by without a purchase.
When the program launched, the company pre-enrolled 200,000 of its best customers, for whom it waived the fee. It did so in order to get its database up to a size where it could cost-justify its mailings, and so that store associates would start seeing customers redeem checks shortly after they had completed their in-store training.
Not surprisingly, customers who elected to enroll have been more enthusiastic about the program. Those who ponied up the $2 fee have been between three and four times more responsive to the program solicitations than the pre-enrollees, according to Mulhern.
Future goals for the program include further integrating the online channel into it. While members can earn points through purchases they make via the Internet, they will not be able to redeem certificates or check their point balances electronically until the second quarter of 2004.
Memorable Rewards
Program: The Rewards Club
Company: Things Remembered
Members: 673,000, as of mid-September
Members’ sales lift over non-members: 150%
Repeat spending rate among new members: 24%
Repeat spending rate among non-members: 11%
Network
