Borders Group attracts 6 million rewards members in two months
With competition in book-selling ranging from bookstore chains, to big-box discount chains to drugstores and newsstands, Borders Group is using rich media and an online loyalty program that attracted 6 million members in its first two months to engage customers as a source of knowledge and entertainment, executives said at the Internet Retailer 2006 Conference.
“Our mission is to be the preferred place for knowledge and entertainment,” senior vice president, chief marketing officer and head of e-commerce Michael Tam said. Borders wants customers to get the same level of shopping experience when shopping online from home as they get in a Borders store, he added.
Borders offers a rich-media-based gift finder to engage customers, who can click through a playful tool that asks questions about the gift recipient’s interests before recommending several books, CDs and DVDs. “It really got our customers excited,” Tam said, adding that many customers have e-mailed links to the gift finder to friends throughout the world, extending the retailer’s reach to markets like Japan where it has no physical stores.
The gift finder works together with the new Borders Rewards loyalty program, which is based on “earned loyalty” instead of loyalty bought with product coupons, said Kevin Ertell, director of interactive marketing, loyalty and CRM. “Bought loyalty can work, but it can be easily defeated by the competition” with their own coupons, Ertell said.
Borders earns its customers’ loyalty not only by engaging them with features like its interactive gift finder, but also by designing its e-mail marketing campaigns as tools that customers can use to explore the world of books and digital media, Tam and Ertell said. “We want our e-mails to be eagerly anticipated as a customer service,” Ertell said.
Borders sends out a weekly e-mail that highlights its shortlist of recommended books and videos, with links to special features intended to engage customers in multiple ways. A customer with an interest in cooking, for example, might receive an e-mailed list of books along with links to an online interview with TV celebrity cooking show host Rachael Ray as well as links to a video of her show. The e-mail may also include links to excerpts of related material in featured cook books.
Customers are able to select e-mail correspondence segmented by 31 subject categories, including history, business and food, presenting them with billions of possible e-mail messages when those categories are mixed with a customer’s specific interests, Tam said. Borders works with CheetahMail to build the unique e-mail messages, he said.
The Borders Rewards program also offers discounts, but in a way that provides customers with flexibility in how they’re used, Tam said. Program participants who spend a certain amount per month, for instance, can earn a 10% discount for a full personal shopping day in the following month.
Launched in January of this year, Borders Rewards had signed up more than 7 million members by June, Ertell said. “70% of the signees are new to our corporate e-mail list,” he said.
Borders doesn’t ask for a postal address when customers sign up for the free loyalty program, a tactic that increases participation, Tam said. “That reinforces to them that we won’t send them junk mail,” he said.
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