In this video, recorded at IRCE 2014, 500friends Director of Strategy and Development Arif Damji talks about how 500friends LoyaltyPlus and AgilOne’s predictive analytics help retailers personalize customer experiences and offers.
As an IBM Smarter Commerce partner, 500friends makes it easy to integrate a loyalty program using IBM WebSphere Commerce, IBM Campaign and IBM Interact (formerly Unica), and IBM Digital Analytics (formerly Coremetrics). In fact, 500friends will be at next week’s IBM Smarter Commerce Global Summit 2014, where we’ll be showing off our joint loyalty solution. Stop by the Marketing and Merchandising’s Innovation Zone and say hello!
Meanwhile, watch this video to learn more about how 500friends and IBM team up to deliver innovative customer loyalty solutions for brands like 1800Flowers.com.
Don’t see the video? Click to watch 500friends + IBM.
500friends recently received the support of key executives in the loyalty and retail space. Here’s the press release 500friends issued with details about our new strategic investors.
April 28, 2014 (SAN FRANCISCO) — 500friends, which arms retail brands with data-driven customer retention and loyalty solutions, has received a strategic investment from key retail, loyalty, and e-commerce leaders, including executives who were previously 500friends customers.
The new 500friends investors include Matt Howland, former CEO of LoyaltyLab; Neel Grover, former CEO of Buy.com; Michael Butler, former head of e-commerce at HP; Jim Keller, former CMO at Shoebuy; Abdul Popal, SVP at CafePress; and Brandon Proctor, CEO of Ice.com and former CMO of Build.com. Both Keller and Proctor were previously clients of 500friends.
“Now more than ever, leveraging loyalty program data to create personalized experiences has become a strategic imperative for retail brands,” said Howland, who also joined 500friends’ board of advisors. “500friends has rapidly emerged as a market leader, and I am excited to be involved with the team as they execute on their vision to help companies tap loyalty data to increase customer lifetime value.”
With institutional investors including Crosslink Capital, Intel Capital, Fung Capital USA, Silicon Valley Bank, and Y Combinator, 500friends was not actively seeking more financing. However, the company considered the experience and perspective of these strategic investors too valuable to pass up.
“Interest from this esteemed group of retail and loyalty leaders is a testament to their confidence in our team and our solution,” said 500friends CEO Justin Yoshimura.
500friends completed its Series B round in early 2013. The company plans to take advantage of the connections and expertise of its new investors to expand its customer base, which already totals over 50 leading omni-channel and e-commerce brands, including 1800Flowers.com, Omaha Steaks, and Kabam. These brands have achieved revenue gains of up to 12% and boosted purchase frequency by up to 60% using the 500friends LoyaltyPlus suite of SaaS solutions.
Beyond his team’s passion for helping retail brands perform better, Yoshimura attributes 500friends’ success to the growing number of CMOs who recognize the strategic importance of loyalty data for increasing customer lifetime value. These forward-thinking marketers are shifting budgets away from their traditional reliance on customer acquisition and devoting more resources to maximizing the value of customers they already have.
“Every retail brand now understands that acquisition is just the first step,” said Yoshimura, “and that retention is a top priority for achieving sustainable profitability.”
CMOs engage 500friends to maximize the profitability of their customer relationships. The 500friends SaaS lifecycle marketing suite, LoyaltyPlus, makes it easy to execute omni-channel loyalty programs and personalized customer retention campaigns. Learn more at http://www.500friends.com.
Looking to leverage your loyalty program to drive more sales, boost margins, and enhance your brand? Then you’ll definitely want to take a look at the award-winning loyalty campaign from Spa Week, the health and wellness brand whose loyalty program, MyWellness Rewards, recently won the Loyalty360 Award for Best Creative Campaign in Loyalty Marketing.
With its goal of engaging shoppers throughout the year across multiple channels, Spa Week rolled out a yearlong campaign with seasonally themed installments. Starting with January’s “Resolve to Relax” and ending with December’s “Shop to Unlock,” Spa Week used these campaigns to increase brand engagement while luring in shoppers with real added value. For example, the Thanksgiving campaign, titled “Thanks-Giveaway,” feautred a 1,000 Wellness Point giveaway, with entries granted as a reward for social referrals via Twitter, Facebook and email. Spa Week also made a charitable contribution for every new loyalty program enrollment.
“The cause marketing component fit the spirit of the Thanksgiving holiday and increased cohesion for the campaign, helping our message go viral,” said Spa Week Program Manager Anne Hanson. “Also, explicitly rewarding advocacy aligns with our brand positioning that encourages individuals to give and enjoy the gift of wellness.”
For a full inside look at creating an award-winning loyalty campaign, download the new Spa Week campaign case study:
In this installment, we look at the loyalty program at Abercrombie & Fitch, the $4.1 billion fashion retailer with over 1,000 stores, and brands including Abercrombie Kids, Hollister, and Gilly Hicks. 500friends Loyalty Makeovers offer suggestions to retail brands for making the most of their loyalty initiatives.
What Abercrombie & Fitch’s loyalty program looks like today
Abercrombie & Fitch’s loyalty program, known as the A&F Club, distinguishes itself from cookie-cutter loyalty programs by embodying the brand’s tone and effectively addressing core customers. Benefits include free streaming of A&F music playlists, the chance to skip lines at events, and members-only birthday offers. Limited-time promotional offers keep the program fresh and relevant.
Abercrombie & Fitch is attempting a turnaround, with revenue dropping 12%, to $4.1 billion, and profit falling 77%, to $54.6 million, during fiscal 2013. To counteract sliding sales and rising expenses, Abercrombie & Fitch’s reorganized management team will need to leverage the A&F Club loyalty program to retain and grow the brand’s most profitable customer segments (without increased discounting). We think A&F Club is on the right track, but we offer a few ideas we think the Abercrombie & Fitch team should consider.
Zach Woith is Head of Loyalty Strategy at 500friends, which helps retail brands maximize the value of their customer relationships. Email him at firstname.lastname@example.org.
In his new post on DMNews, 500friends Director of Strategy and Development Arif Damji talks about how retailers with a private-label credit card (PLCC) can reap big benefits from also having a robust loyalty program. The major points Damji makes are that:
Read the FULL post on DMNews here:
Ashley Bienvenu is a Customer Retention and Loyalty Analyst at 500friends. Email her at email@example.com.
In this installment, we look at the loyalty program at Office Depot, the $17 billion office supplies retailer with 1,900 stores that recently merged with Office Max. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives.
In late 2013, Office Depot completed a $1.2 billion merger with competitor Office Max. In this Loyalty Makeover we’ll look at both programs, and we’ll examine the opportunities in merging them.
What the Office Depot and Office Max loyalty programs look like today
Office Depot Rewards lets members earn rewards for purchases of ink, toner, paper and copy/print/ship services. Members can also earn rewards for recycling used ink cartridges and completing member profiles. Members who spend at least $200 in a calendar quarter achieve Choice status, which allows them to earn extra points through purchases, made either in-store or online, for products in up to 5 categories they choose. (Choice status is revoked if spending falls below $200 in a quarter.) For every 1,000 points earned, members receive a $10 rewards certificate applicable towards future purchases.
In contrast, Office Max’s MaxPerks program is more straightforward. Members get 5% back when they spend at least $500 in a one-year period. Recycling ink and toner earns members $2 for each cartridge brought into the store, up to a limit of $20 per calendar month.
Expenses from the merger of these office supply giants, coupled with weak gross margins, led the combined company to declare a $205 million operating loss in 2013. Critical for the combined company’s future success will be boosting gross margins, which fell to 23.4% last year (vs. 26% for Staples), and a strong, unified loyalty program could play a major role.
Merging programs on this scale will be a huge undertaking for Office Depot’s executive marketing team. We humbly propose some ideas that could be helpful:
Ashley Bienvenu is a Customer Retention and Loyalty Analyst at 500friends, which helps retail brands maximize the profitability of customer relationships. Is there a loyalty program you’d like to see featured in a 500friends Loyalty Makeover? Send her a note at firstname.lastname@example.org.
In this installment, we look at the loyalty program at JCPenney, the $12 billion department store chain with 1,100 stores and $1 billion in online sales. 500friends Loyalty Makeovers offer suggestions to retail brands for making the most of their loyalty initiatives.
What JCP Rewards looks like today
JCP Rewards members accrue one point for every dollar they spend. For every 100 points they earn in a calendar month, they receive a $10 coupon towards future purchases (up to a maximum of ten $10 coupons per month). At the end of every month, point balances reset to zero.
With a 2013 operating loss of over $1.2 billion, investing in customer retention and loyalty may seem like a luxury for JCPenney. However, to really get back on track, the embattled department store chain will have to prop up its gross margins, which fell to 29.4% in 2013 (typical department stores gross margins hover in the mid- to upper-30s). That means finding an alternative to discounting, which means boosting loyalty is critical. Compared to other department store loyalty programs, JCP Rewards is remarkably simple, but by eschewing a more robust loyalty program structure, JCPenney is missing out on important loyalty benefits.
Questions? Or is there a loyalty program you’d like to see featured in Loyalty Makeover? Send me a note at email@example.com.
Zach Woith is Director of Loyalty Strategy at 500friends, which helps retail brands maximize the profitability of their customer relationships.
In this installment, we look at the loyalty program at Ace Hardware, the $3 billion hardware store co-operative with 4,700 locations. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives.
What Ace Hardware’s loyalty program looks like today
Known as Ace Rewards, the Ace Hardware loyalty program rewards members with in-store discounts (“Instant Savings “) and a points currency for all purchases. Members collect 10 points for each dollar spent and get 1,000 points for enrolling. Once they reach 2,500 points, they receive a coupon for $5 back on their next purchase, equating to a 2% funding rate. The private label Ace Rewards Visa Card allows members to augment their Ace Rewards point balances with up to 10 points per dollar spent.
Ace Rewards is unusual among retail loyalty programs in that its benefits include both a preferential member price as well as the accrual of a points currency. The generosity of the program is likely a significant driver of its strong enrollment, which has reached nearly 25 million members. In-store purchasers are attracted to the preferential member prices, while online shoppers benefit from the point currency. However, strategic changes to its loyalty program could benefit Ace Hardware’s member stores in their ongoing battle with the likes of Home Depot, Lowes, and Amazon.
Questions? Or is there a loyalty program you’d like to see featured in Loyalty Makeover? Send me a note at firstname.lastname@example.org.
Arif Damji is Director of Strategy & Development at 500friends, which offers THE complete SaaS loyalty solution for today’s CMO.
In this installment of Loyalty Makeover, we look at the rewards program at AutoZone, the $9.1 billion automotive parts retailer with more than 5,000 stores. Loyalty Makeover suggests ways for retail brands to make the most of their loyalty initiatives.
What AutoZone Rewards look like today
Members sign up for AutoZone Rewards at a physical store, where they receive a Rewards Card linked to their account. For each purchase of $20 or more, online or in-store, members earn one “credit.” When members accumulate five credits, they receive a $20 voucher for in-store redemption. The expiration period for credits varies by state, however in most states members must earn their 5 credits within a 6-month period and redeem vouchers within 3 months.
AutoZone’s financial performance has been fantastic over the last 12 months, with its stock jumping more than 42%. That said, the company could be doing even better by making some strategic improvements to AutoZone Rewards. Most notably, AutoZone Rewards accrue based on purchase frequency, rather than on purchase amount (once the $20 minimum is met), which deprives AutoZone of tools for stimulating higher purchases. Also, it’s difficult for consumers to find out how AutoZone Rewards work: AutoZone’s website FAQ advises visiting a store or calling customer service. (When I called, however, a pleasant and efficient AutoZone phone representative did a good job explaining the ins and outs.). In short, a number of changes to AutoZone Rewards would help AutoZone realize material gains in sales and profitability.
1. Switch to rewards based on purchase amount. While the one-credit-per-purchase approach limits AutoZone’s reward liability, it does little to spur customers to spend more. By switching to a structure in which rewards accrue based on purchase totals, AutoZone can unlock the vast potential of its loyalty program. Ideally, a salesperson should be able to say, “You’re just $10 away from your next reward. Would you like to buy something else?” Similar messages should also be sent by email and automatically triggered based on member activity (or inactivity).
2. Enable online signup and redemption. AutoZone Rewards members can see their credit totals online, but that’s about it. If you want to sign up for the program or redeem rewards, you have to visit a store. This creates a point of friction for consumers who might otherwise participate, and decreases the loyalty program’s bottom-line impact. AutoZone should follow the lead of retailers like 1800 Flowers, who enable all loyalty interactions both online and in stores. AutoZone might also integrate AutoAnything.com (acquired in 2013) into its loyalty program.
3. Streamline the rules, and better explain them up front. Customers shouldn’t have to call a customers service line to understand the basic rules of a loyalty program. When I spoke with the AutoZone rep on the phone, she told me that some vouchers are valid for 18 months, while others expire in just 3 months. A more streamlined program, communicated clearly through the company’s website, would go a long way towards boosting enrollment in AutoZone Rewards.
Is there a loyalty program you’d like to see featured in a 500friends Loyalty Makeover? Send me a note at zach (at) 500friends.com. Zach Woith is Head of Loyalty Strategy at 500friends.