In November in this space, I wrote that on average, consumers are enrolled in 30 loyalty programs but are active on less than half of them. This is the story of one brand bucking that trend, leveraging its loyalty program to drive a 25% increase in Average Order Value and a 70% improvement in repeat purchases.
Predator Nutrition, one of the leading sports nutrition companies in the UK, is a Salesforce Commerce Cloud customer that was seeking opportunities to cross-sell by introducing new products to existing customers. Additionally, it sought to increase the sales conversion rate on its product pages by increasing the number of customer reviews.
It needed a loyalty program that would satisfy three main objectives:
Increase the profitability and lifetime value of their customers
Get existing customers to try (and ultimately buy) new products
Create a deeper relationship with customers by converting shoppers into brand ambassadors and content creators
The chart below hows how profitability improves as customers engage and buy more often.
Predator Nutrition used four specific strategies meet these objectives.
A tier-based system with incremental benefits to motivate and maximize engagement
360-degree rewards program which rewards customers for purchases, reviews, referrals, email sign-ups and other form of engagements
Ability to use reward points for trying out new products for free
Specific marketing campaigns based on loyalty customer segmentation
Let’s examine these 4 strategies.
To maximize the frequency and value of purchases from existing users, Predator Nutrition created 5 tiers based on the user’s average spending in a 12- month period. Aligning with the Predator Nutrition brand, the tiers are named after natural predators; T-Rex, Shark, etc..
The tiers serve an important business objective. Every 12 months, Predator Nutrition wanted at least 10% of the shoppers in each tier to move to the next, higher tier. To maintain or upgrade their status, shoppers would have to keep spending every 12 months. This meant that average spending levels would increase by approximately 10% every 12 months.
To encourage shoppers to maintain their status at the higher tier, Predator Nutrition used a points acceleration technique, with each higher tier offering more points for every pound spent. For example, shoppers are awarded 10 points at the Piranha tier, 12 at the Jaguar tier, and 25 at the T-Rex tier. Thus, the shopper’s points accumulation accelerated quickly as they moved to the higher tier, which is a great incentive for to buy more.
360-Degree Rewards Program
Repeat traffic was a key indicator for the success of the loyalty program. If existing customers returned often to the website, they were much more likely to buy. Repeat traffic also created mindshare for the Predator Nutrition brand.
Therefore, Predator Nutrition decided to award points not just for purchases but also for referrals, reviews, newsletter signups, Instagram and Twitter follows.
Shown below is an example of how Predator Nutrition awarded 100 points for every product review. Using this strategy, Predator Nutrition got three times more product reviews and a significant improvement in conversion rate.
This strategy resulted in a significant increase in repeat traffic, with shoppers returning just to perform these program activities and to check out new products.
Getting Shoppers to Try New Products
Predator Nutrition wanted shoppers to try new products for free, sothey included these products as redemption options where shoppers could exchange their points for products. They have over forty products in their redemption list and this list keeps growing.
Marketing Campaigns to Customer Segments
Every month, Predator Nutrition exported customer details file from Zinrelo, uploading the file to their email service. Different email variations were sent to combinations of shopper tiers and point levels. For example, if a shopper at the T- Rex level only has a few thousand points to redeem, they received an email with the rewards that they get for those points. Additionally, a reward was added to entice them to spend more. There were at least 50 different email template variations tt sent to various loyalty customer segments each month, which increased shopper 3 engagement significantly.
Predator Nutrition is a great example of a loyalty program implemented on Salesforce Commerce Cloud. Using the four strategies outlined, Predator Nutrition has seen a 25% increase in Average Order Value (AOV) and a 70% improvement in the repeat purchase rate, leading to a steady growth in profitability.