Key CCG Services

  • Relationship Marketing Program Analysis and Design
  • Program Analysis and Redesign
  • Customer Research
  • Consulting Services
  • Contact Strategies
  • Loyalty Platform Recommendations

Situation

One of the nation’s largest outdoor retailers sought CCG’s assistance in refreshing and redesigning, from the ground up, its multi-tender loyalty program to boost participation and increase market competitiveness.

Objectives

CCG and the retailer identified the following high-level goals for a redesigned program:

  • Positive return on investment (ROI)
  • Ease of execution for retailer
  • Simplicity for the member
  • Minimal customer backlash after implementing changes

During a proprietary discovery process, CCG reviewed a wide range of information, from program financials to customer data and segmentation studies. In addition, CCG interviewed key corporate stakeholders and more than 20 store managers.

Most importantly, CCG implemented two vehicles for customer feedback: customer focus groups of loyalty members with varying points of medium to high annual spend (in various geographic locations) and an online customer survey of loyalty program members and private label credit cardholders.

The customer input revealed that most members were positive about the current rewards program, but few could explain how the program worked. For instance, of the 90 percent of program members who said they were aware of the program, 84 percent did not know their point balance, and more than 75 percent were unsure how rewards were triggered or how points were calculated to equal a reward. Customer feedback also gave CCG and the retailer better direction on what types of distinct benefits would resonate (and increase long-term loyalty) for best customer segments.

Overall, CCG discovered that the current program had minimal active participation — which means the retailer was rewarding a large number of customers for behavior they would have exhibited without the program.

Recommendations and Solutions

CCG developed a revised program structure for the loyalty program that would help address the customer disconnect with program mechanics, boost ROI and employ a stronger package of benefits to reward customers for their loyalty. Among CCG’s recommendations:

  • Change from a point-based to a dollar-based structure to increase program understanding
  • Keep the program structure as simple as possible and reduce the fine print, which customers tended to mistrust (versus a high trust level in the retailer’s brand itself)
  • Bring the multi-tender and credit card programs under one overall structure
  • Enhance member understanding with consistent, monthly e-mail communications and reward-status updates
  • Test adding a bonus earning tier for top 5 percent of members to provide additional rewards to best customers
  • Add new, more engaging and exciting benefits that resonate with best customers
  • Switch to a lower-cost Loyalty Platform Solution (LPS) to aid in positive ROI
  • Improve store access to customer information and inventory levels

Results

The retailer accepted CCG’s recommendations and launched the revised program to members. Within six months, all initial objectives were being met.