Key CCG Services
Ever since launching its successful loyalty program in 2001, this national women’s fashion retailer has been committed to evolving the program to keep it relevant and customer focused. Sensing that some of their customer segments, identified by reward level tiers, weren’t as engaged as they could be, the retailer decided to embark on a comprehensive review of the program. Specifically, they wanted to focus on the benefits offered in each of the three tiers and identify areas for improvement.
They wanted to focus on the benefits offered in each of the three tiers and identify areas for improvement.
Call in the Loyalty Pros
Having previously worked with the retailer on an effective program refresh, the CCG loyalty experts were brought on board once again to perform a detailed segment analysis and propose recommendations. To improve program engagement among members — and encourage non-members to enroll — the CCG team developed a two-pronged approach:
After analyzing the segments and current benefits structure, CCG found that, while the retailer had a strong program infrastructure in place, there was a significant opportunity to garner additional revenue through more visits and increased spend by optimizing the benefit mix.
Benefits Optimization: Finding the Secret Sauce
Using our proprietary research methodology and statistical benefit optimization models, CCG was able to determine the optimal mix of benefits for each of the retailer’s key audiences — as well as forecast the cost and revenue impact for each recommendation. This methodology uses both multivariate and Total Unduplicated Reach and Frequency (TURF) to quantify the reach and desirability of existing and potential program benefits. Based on these results, CCG then recommended an optimized benefit mix for each key audience based on ROI, desirability, reach, operational efficiency and support of brand drivers — as well as aspirational impact for non-members and lower tiers.
Additionally, we used its proprietary metrics to calculate an “Enrollment Quotient” (EQ) and “Active Participation Quotient” (APQ) of the key audiences. EQ is a score derived by a given customer segment’s level of program awareness, understanding and belief that the program will benefit them. APQ is a score derived by a given customer segment’s level of program awareness, understanding and participation in the program. Armed with these powerful metrics, the retailer was able to compare itself to competitors, create a baseline for historical comparisons and compare differences between their key audiences
Spreading the Word
CCG performed a communications audit of the retailer’s customer-facing communications. We found that awareness of the program was high. But there was room for improvement in the way the benefits and overall program information were communicated. The CCG team made specific recommendations to increase customer engagement that included improved messaging in existing as well as additional channels not currently carrying those messages. Recommendations also included providing status, recognition, program updates and value-added content.
Updating a Classic: Mission Accomplished
By adding value to the program through an optimized benefits mix, and improving the overall communication strategy, CCG’s work helped this national women’s fashion retailer enhance and monetize their existing loyalty program — to the tune of $40 million in incremental sales and $18 million in profits. The retailer’s marketing team also used CCG’s work to sell the program changes to senior management and the board of directors.