A specialty retailer had an existing paid loyalty program. A key issue was that the benefits of the paid program were tied to a certain day of the week. Over time, as penetration increased among the active customer base, shopping habits changed to shop only that day, leaving the stores largely empty on non-benefit days. The retailer was reluctant to make any changes because they had become dependent on the revenue stream.
Incendio created a program with a free and a paid tier. The goal of the free program was to collect first-party data, which was previously uncollectable, as there was no capture mechanism. The paid tier was created to protect the revenue stream and identify the most engaged members. Perks include twice yearly goodie boxes packed with samples and exclusive merchandise, paid-member-only discounts, special shopping days, and free shipping, among other things.
With a premium option for customers, Incendio created a mechanism which brings in qualified and engaged customers, who are entering through the lens of a loyalty program. The program has more than 8M members across both tiers, generating a wealth of actionable first-party data and providing a mechanism for self-identification.
- Paid tier members visit stores 2x more than non-members
- Paid tier members purchase 2x more and spend significantly more than a regular non-paid customer.
The loyalty program has caused a shift in the company’s entire approach to pricing, which has stopped margin erosion by as much as 38% on some product lines.