The competition within the loyalty marketing industry continues to expand. On average, Americans tend to be enrolled in 29 loyalty programs. However, they usually participate in only 12.* Although most programs are based on offers received and points earned, keep in mind: Loyalty is rooted in emotion. Thinking about these programs as purely transactional misses the relationship-building aspect that is crucial when asking customers to choose your business, your prices and your products over competitors’. Especially when competitors are only one click away.
This trend toward decreasing engagement has caused a 180-degree shift in companies’ focus. In the past, loyalty was expected to flow from the customer to the business or provider. Quality products or service performance naturally earned the repeat purchases to the exclusion of competitors’ offers. While quality products and service performance continue to be valid factors today, expecting loyalty solely based on them is neither reliable nor sufficient enough to grow and keep customers knocking at the door. In today’s retail environment, customers are making buying decisions based on how loyal a company is to them.
The best loyalty programs raise the bar for customer experience and are not limited to just factors of discounts, speed or convenience. With shifting demographics and changing values, consumers want more than product acquisition and are looking for experiences that are meaningful and relevant to them as individuals. Companies are evolving, too. How often do companies profess: It’s in our DNA? This expression demonstrates an increased reliance on expressing brand essence as a form of core identity.
For Walgreens, one of America’s largest pharmacy retail chains, a commitment to customers is key to maintaining loyalty and is reflective of the brand’s mission and purpose:
Walgreens’ vision is to be America’s most-loved pharmacy-led
health, well-being and beauty retailer. Its purpose is to champion
everyone’s right to be happy and healthy.
Walgreens’ dedication to its customers remains its top priority. The company continually explores new ways to better engage its customers. Because of this, it defies the trend of declining program participation by demonstrating loyalty in ways that acknowledge, value and appreciate each Balance Rewards® loyalty member as an individual.
To raise the loyalty-marketing bar, Walgreens collaborated with Hallmark to take personalized action on key customer insights and data. Through cross-functional and cross-company collaboration, their goal was to connect more deeply with Balance Rewards members within the greeting card category. Emily Miller, who was then Category Manager of greeting cards at Walgreens Retail Products, wanted to demonstrate her loyalty to these shoppers and ultimately create within them “loyalty beyond reason.”
“I wish I could personally thank each and every one of them,” said Miller. To do this, she partnered with Hallmark to custom design a greeting card that included a relevant special offer for these valuable shoppers. What made this touchpoint successful was Miller’s authenticity and of the cards’ ability to let her truly express heartfelt appreciation, creating a meaningful and relevant experience—not only for the recipients but Miller as well.
Understanding shoppers to foster relevant connections.
Loyalty programs offer the richest wealth of insights into shopper behavior, but often companies do not leverage this information to their fullest benefit. Loyalty program participation opens the possibility of building profiles based on the products they have bought, the amount spent and the frequency with which they visit the store and website. The challenge for businesses often comes in their ability to gather all of this data into one repository for effective mining and segmentation.
From the consumer perspective, shoppers have become savvy enough to know that their purchases are being tracked across a variety of touchpoints, both in-store and online. Their expectation at this point is to be served relevant products, offers and content in a way that demonstrates the company’s value and understanding of them as individuals. Since these are the people who have indicated that they desire a
stronger relationship, their needs and motivations should always be kept at the forefront of consideration in order to forge more intelligent relationships.
The first challenge for Walgreens and Hallmark was to identify and segment the Balance Rewards card shoppers based on what they were buying and how often. Both teams intuitively believed that the Balance Rewards loyalty members that shopped heavily within the card category were likely accounting for the largest percentage of its revenue. However, there was no data evidence at this point to support the theory. But if this belief was validated, the group could be isolated with a test-and-learn approach.
The two companies considered the data with the understanding that maintaining and growing heavy shopper share of wallet was mission critical. Their key finding to act on was that among Balance Rewards loyalty shoppers, a little over 10% of households represented close to half of the spending.
The data findings proved that this group was the least price sensitive, had the most frequent store visits and the highest value in terms of dollars. They were designated to be the first greeting card recipients.
Creating emotionally relevant touchpoints triggered by data insights.
A national research firm conducted a survey exploring people’s emotional connection to various communication formats. Sixty-four percent of respondents said greeting cards made them feel special, beating out 15% for emails and 5% for texts.
Acting on the insights, knowledge and information contained within the data derived from loyalty programs and infusing those touchpoints with emotion serves in generating even higher levels of engagement among members. For Walgreens, the Hallmark greeting card was a logical fit, but the relevance of cards as a direct mail format in business-to-consumer has wider relevance for any category.
While today’s digital capabilities allow companies to reach out to their customers in a quick, convenient, real-time manner, innovation can often be found by going back to more traditional tactics. In direct mail applications, the Hallmark greeting card has proven to be a format that increases response rates simply because it delivers a more profound emotional impact to the recipients. Greeting cards cut through the mail clutter and give people a brief break from life’s fast pace. For businesses, it’s not always about offers; it’s sometimes as simple as thanking people for their business. And in today’s digital interactions, a sincere unexpected thank-you in the form of an actual card is not only appreciated, it’s valued. For businesses, a Hallmark card says thank you with the same sincerity and authenticity that people use in their personal lives. Greeting cards are perceived as gestures of caring, and Miller wanted the power of authenticity to come through as she communicated to her key shoppers. Hallmark ensured that her message felt personal.
Designing a Hallmark card to reflect Emily’s style.
To create the Walgreens card, Miller worked with Hallmark Business Connections, Hallmark’s subsidiary created to build and strengthen relationships between companies and their customers through the use of greeting cards and gift cards. Their design and editorial teams paired up with Miller to concept the cards and allow her to express personal appreciation in an emotionally relevant, highly personalized way.
In working with other clients in retail, financial or health and wellness services, Hallmark Business Connections has developed cards for birthdays, apologies, congratulations and holidays—any touchpoint that can benefit from greater impact. Hallmark had proven the value of its greeting cards within a business application by delivering a substantial increase in direct mail response rates.
The Walgreens greeting card design showcased Hallmark’s artistry and Miller’s own style. Based in Kansas City, Hallmark Cards draws upon the originality of its approximately 500 artists, designers, stylists, writers, editors, web designers and photographers, along with a deep, rich archive collected from over 100 years of relationship-building product creation.
The sentiment and personal message, written by Hallmark writers, emulated Miller’s tone and voice. In addition to a message of thanks, Emily needed to introduce herself to the shoppers. Not one to use 10 words when two will do, her direct conversational style and natural warmth came through as genuine in her gesture of appreciation. She explained:
To make the greeting feel even more personally engaging, Emily asked Hallmark to reproduce her handwriting for use in the personal message, her signature and the addressing on the envelope. She requested physical stamps over metered or indicia and used her actual business return address. Each envelope bore the iconic Hallmark gold crown seal. At this point, the greeting card truly took on a me-to-you emotional relevance that was integral to making each shopper feel connected to Emily and ultimately inspired the many correspondences she received from the recipients in return.
Walgreens leadership and customers alike praised Miller’s bold, genuine efforts to actively engage customers. One shopper couldn’t believe that the card was sent by a real person. When she found out that it was, she invited Miller to speak at the May 2017 Category Management Association Conference in Las Vegas.
Making the offer feel like a special gift.
The offer was created as a genuine gesture of appreciation, one that wouldn’t look or feel like a coupon. Giving shoppers 5000 Bonus Points equating to a $5 reward based on a Hallmark card purchase, the exclusive offer was relevant and appreciated by points-conscious card buyers.
Offer text was printed on a coordinated insert. This design is intentional—the offer is meant to feel like a gift since it’s included in a greeting card. In one instance, Walgreens shared news of a Toys for Tots donation made in honor of its caring card-buying customers. Because Miller has established an emotional, personal connection with these shoppers and shares their values and priorities, the charitable effort was trusted as a generous gesture.
After the launch of this first-of-its-kind Walgreens mailing, the results exceeded all expectations and are still regarded as best in class for redemption and response. Considered to be one of the most impactful campaigns thus far, it delivered over $1M in incremental sales.
Not only was the offer redeemed at a higher rate, Emily received hundreds of thank-you cards back from customers, touched and inspired by her gesture. Emily, a believer that loyalty is a two-way street, continues to correspond with many of them.
Not all of the responses she received were positive, but finding out what shoppers don’t like is equally important. From feedback on pricing to products, shoppers felt free to share their opinions—all valuable insights and information that might not come to light in structured market research or surveys.
Keeping loyalty beyond reason at the heart of customer engagement.
Hallmark Business Connections continues to collaborate with Walgreens to find innovative ways to stay connected. Shoppers prefer to access information from a variety of mediums, each having their own preferred channel. The eCards sent to loyalty members who have no physical address on file are no less intimate. After an opening animation that digitally re-creates the same design and editorial assets as in the paper greeting card, a video plays featuring Emily personally expressing her gratitude.
As a holiday greeting, Miller recorded her message on a sound chip inserted into a greeting card that plays when the greeting card is opened. As the list and segments continue to evolve, so does the personal message. For shoppers continually on the recipient list, the words represent one half of an ongoing conversation, a deepening of their relationship with Emily and a continuing reminder of Emily’s (and Walgreens’) appreciation. The program now continues under the leadership of the new Category Manager, Brittany Crosby.
Winning loyalty through collaborative efforts.
While the revenue results prove this campaign to be a success, the benefits go deeper. Creating an emotionally engaging, relevant experience for customers takes the combined efforts of cross-functional talent. From database analysis to developing creative and on through procurement, teams across two companies came together to problem solve as they sought to identify and understand loyalty shoppers in a data-rich, intelligent way. While Walgreens leveraged loyalty, targeting and logistics, Hallmark created and produced the greeting cards. But the open lines of communication didn’t stop at the Walgreens-Hallmark partnership. The relationships, good will and trust that Miller has established with Walgreens shoppers can’t be underestimated. Through the use of Hallmark cards and a rich point offer, Emily was able to thank shoppers and show how much she authentically cared—as a real person in a large company. By acknowledging, valuing and appreciating each Balance Rewards member as an individual, she opened up lines of communication with shoppers and reached her goal of creating “loyalty beyond reason.”
In a time when so many companies use faster, bigger, better as ways to quickly attract customers, making people happy with a simple, genuine, heartfelt thank-you proves to be the best long-term loyalty strategy.
*Bryan Pearson, Forbes contributor, January 2016
**Walgreenworld, Fall 2016