Target also leads the pack when it comes to paid search spending, a new report finds.
The e-retailer nudges loyalty club members to cash in their points.
Members of fragrance retailer Scentiments.com’s Scentury Club loyalty program typically spend 15% more per order than non-club members. But when club members get an e-mail nudging them to spend unused loyalty points, their average order value jumps up to more than 30% the non-club site average, CEO Howard Wyner says.
“By being more aggressive with e-mailed promotions within the loyalty program, we doubled the increase in average order values,” he says.
That resulted in a 106% increase in revenue per e-mail, as the e-mail open rate surged 139%, the click-through rate 97%, and the conversion rate 25%. He declined to share the specific figures.
“The results were nothing short of jaw-dropping,” he says. He adds that the system has produced a strong return on investment and an increase in net profits.
Scentiments, No. 481 in the 2012 Internet Retailer Top 500 Guide, racked up those increases over a three-week period in April, when it sent Scentury Club members several promotions, including some that offered an extra batch of free loyalty points. Scentiments uses the LoyaltyPlus e-mail marketing system from 500friends, its loyalty club technology vendor, which provides information on how many club members have unused points, and for how long they have had those points.
Using LoyaltyPlus and 500friends analytics data, Scentiments was able to target loyalty club members that hadn’t been to its site for 90 to 120 days but had amassed about 300 points. To get them to use those points and make a purchase, it e-mailed them an extra 200 points for free, putting them at the minimum level of points to get a reward. In the Scentury Club program, 500 points is the minimum level to earn a reward, which is $10 off a $60 order. Other rewards include a $50 gift certificate for 2,500 points. The retailer is also offering for a limited time 1,000 travel miles good on American Airlines, Virgin Atlantic, U.S. Airways or Hawaiian Airlines points for 2,000 Scentury Club points.
Other customer segments received different offers based on their shopping history and level of accumulated points, Wyner says. Some loyalty club members who had been more recently active as shoppers, for example, received e-mailed notices of new rewards soon to become available. In addition to leading to better e-mail performance metrics like higher open rates and more revenue per e-mail, the program has also resulted in customers posting more positive comments about Scentiments.com in social media, Wyner adds. “They’re tweeting about us, posting on Facebook and referring their friends to us.”
Wyner says he’s also starting to use 500friends data to identify Scentury Club members who may be within a small percentage—say, less than 2%—of a minimum points threshold. The e-retailer can then e-mail them a specific offer. “For customers within close range to hit 500 points, maybe at 492 points, we’ll send them eight points to put them over the top,” he says.
“When you join any loyalty program, it’s a long process to generate enough points to buy a product,” Wyner says. “You have to make it attainable. We’re always doing things to show the value of being a member, showing the difference between us and the competition.”
LoyaltyPlus subscriptions start at $2,000 per month. The vendor hosts the software and clients like Scentiments connect to it via that Internet, a business model known as software as a service.