Driving Volume of Lower Ticket Transactions

Objective
This specialty retailer wanted to drive lower ticket/higher traffic side of the business by lowering the earnings threshold of the rewards program and adding a multiplier to the retail purchasers.

Insights
Tested for 180 days at various combinations of lowered threshold earnings and members; issued all members with existing balances above the lower threshold a rewards, regardless of last purchase date.

Recommendation
Target accelerated earnings (either through lower threshold for earning or points multipliers) to specific segments to incent less engaged members through reward issuance while removing top members who don’t need the incentive and lead to margin erosion.

1%

Increase in Reward Redemption

25%

Reduction in Reward Overspend

6.5%

Reactivation of Inactive Members

$1.13

Generated in Overspend per $1 Spent

Key Takeaway
Through revisions to this retailer’s rewards program we were able to increase rewards program enrollment, new member engagement, and reward redemption.

Background
This specialty retailer provides tires; automotive maintenance and repair; parts and expert advice for the Do-It-Yourself-er; commercial auto parts delivery; and fleet maintenance and repair to customers across the U.S.

Results

  • Reactivated members whose points were about to expire profitably.
  • Increase Rewards program enrollment.
  • Increased new member engagement as new members earned rewards in less than 90 days vs 1 year and made a second transaction faster.
  • Reward redemption increased due to more members earning multiple rewards during the promotion period.
  • The points multiplier applied to everyone, reduced the reward overspend as top members earned multiple rewards during the promotion period, but did not spend.