How a well known retailer built a loyalty program that reduced customer initiated contact by 28% 

Project Emphasis:  Customer Experience / Intelligence & Analytics / Market Strategy / Financial Modeling

- 28%
Customer Initiated Contacts
- 37%
Loyalty Programs
+ $11 million
Sales in first 6 months

“Think Tank Partners played a very important role in the success of our loyalty initiatives.  Their understanding of our industry, of the behaviors of our customers and the technical aspects of our operations made the process of collaboration painless.”

D. R. – Vice President, Consumer Services

The Customer

Our customer is a leading national retailer.   The current footprint for this company expands well beyond 6,000 locations across the United States. The company focuses on providing exceptional value to their customers and strives to support their customers across all aspects of their life. 

The Challenge

Many of the products and services provided by this retailer were perceived as commodities by consumers.  Pricing and convenience were often used as the deciding factor for consumers wishing to make a purchase.  Understanding that they could not compete with discount and “big-box” stores, this customer decided that serving their most loyal customers was the easiest way fight off the competition and preserve their foothold in the market.

At face value, their strategy seemed simple enough, however the company quickly realized that the consumer groups that they had defined several years earlier did not reflect the overall complexities of their current customer base.  Those consumer groups were too broadly defined and did not factor key details of their experiences and buying patterns with the retailer. This company was also plagued with a history of failed or sub-par programs, so executive buy-in of the model was hard to come by. 

The Solution

Think Tank Partners was brought in to support the early stages of the loyalty program development.  Initially, we were focused on defining a series of customer segments that represented the highest value consumers.  Once segments were profiled, we moved into the service definition assessment where we examined how these segments interacted with the organization over the lifetime of the data available. During our analysis we identified numerous contact and spending patterns that were ultimately incorporated in the loyalty program strategy.

Since the company was trying to expand the level of customer engagement, several service channels were evaluated to determine the correct mix of technologies to support the consumer’s needs.  Ultimately, the research we collected identified the mobile and web channels as the channels of focus for the initial loyalty program launch.  Our team also devised a proactive strategy that put outreach into the company’s hands for simple, routine, contact reasons.  This approach allowed the company to step ahead of consumers that contacted them to re-order product or check on the status of their purchases. Finally, we leveraged consumer intelligence to build an interactive mobile application to support the initiatives.  

The Results

The customer defined success in terms of end-user adoption and the impact on the broader service channel.  Performance metrics were tracked closely by executive leadership to ensure that the return on investment was achieved within the projected time frame.  Key metrics include:

28% reduction in customer initiated contacts.  The majority of the savings fell into routine status questions and re-order transactions.

37% reduction in the number of loyalty campaigns.  Emphasis was placed on developing targeted campaigns within the loyalty program to deliver value-added service to consumers.   

$11 million increase in sales within the first six months of program launch due to improved focus of the program.

 

What could a loyalty program do for your bottom line?

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