A best-in-class loyalty program goes way beyond traditional ‘points-for-purchase punchcards’. There’s also no one-size-fits-all customer loyalty template. The key to success is a data-driven loyalty strategy that combines customer data to create unique, personalised offers, resulting in increased engagement and revenue, according to András Szöcs, senior director and head of customer programs and centre of excellence at leading European retailer, Salling Group.
Speaking with Paula Thomas on her weekly podcast “Let’s Talk Loyalty”, András discussed the launch of Salling Group’s highly successful customer reward program.
Loyalty against the backdrop of the pandemic
As Denmark’s largest retail operator, which serves over 11 million customers per week and operates in more than 1,400 retail locations, including restaurants, discount and grocery stores and coffee shops. But far from your typical customer loyalty story, Salling Group took a less traditional approach that continues to pay off big. It’s a story you won’t want to miss.
One could speculate that Salling Group launched its loyal program during the pandemic in direct response to the change in consumer behaviour. However, according to András, it was just coincidental.
“We started honing the idea of a customer program at the beginning of 2019,” he says. “It was basically triggered by a major promotional transformation I was leading for the Group. From this project, it became clear that we needed a customer loyalty program.”
Salling Group wanted to step away from its outdated point collection strategy that used a plastic-type of token because, with COVID, it became a hygiene factor. “Besides being environmentally unfriendly, it also placed a significant cost on our P&L. We didn’t believe that it could really drive customer value for the long term,” András explains.
That saw Salling Group turning to Cheetah Digital to invest in a new company-wide, fully-integrated digital marketing program that was unique to each of its brands and gave customers more — more personalisation, more experiences, and more benefits. Salling Group’s spray-and-pray strategy days where it’d deliver coupons on printed leaflets were over.
After a number of discussions and with Cheetah Digital’s support, Salling Group decided to build a loyalty program that could be used anywhere as an owned digital personalised communication channel; something that wasn’t reliant on Facebook and Google walled gardens. Even more, the program would help the Group understand its customers beyond transactions.
Passing the ‘grandma test’
Steve Jobs nailed it when he said that users should only ever be three clicks away from what they want to do. And that’s exactly the kind of premise Salling Group built its loyalty program with Cheetah Digital on.
Rather than asking a lot of questions at sign-up and profile building, Salling Group’s loyalty program, which leverages single-touch activation, simply requires three things: an app download, email address, and payment card.
“It had to pass what I call the ‘grandma test’ — if it was simple enough for my grandmother to sign in, then it was simple enough,” András says.
By focusing on delivering an excellent and seamless customer experience by weaving digital payments, coupons, and gamification into individual brand apps, Salling Group achieved a 10x lift in daily active users.
Even more, it smashed its 2020 loyalty registration goals in only four weeks. And just recently, the Group hit a major milestone worthy of applause. “We just hit the 1.2 million members mark,” he says. “It’s a very nice number to celebrate.”
Cost-effective and cookie-free communication
As Paula points out, when compared to other digital, TV and marketing avenues, it’s incredibly cost-effective to have a direct digital channel to reach your customers. Even more, with the demise of third-party cookies, it’s more important now than ever before to keep your customers close.
“With what’s happening nowadays with cookies and data privacy, being able to engage with your customer on their terms is key. When they sign up for your app, they’re essentially saying they give you permission to engage with them there. It’s the most ethical way, and supercritical to keeping app engagement high, is to continuously present them with new information, games and services,” András adds.
Recently, Salling Group embedded the Neatoscan service into its loyalty app. Now, customers can scan their items on their phones as they shop. When they’re finished shopping, they press the pay button and then, walk out. There’s no need to queue.
“We have another feature, which we call digital refund,” András explains. “So we obviously have digital receipts. But if you are unhappy with the product when you get home, because, for example, you cut the avocado in half and, unfortunately, it’s brown or something; you have a chance to identify the product on your digital receipt, take a picture, send some comments to us why you would like to refund it and then send it in and we give you back the money in your digital account.”
Gamification as a strategy
Remember paper scratch cards where you’d get your coin and scratch the paper to reveal what you’ve won? That’s essentially what Salling Group has installed into its loyalty app. It’s a game that people still love to play, even digitally.
“When they play the games in our apps, they’re unlocking free chocolate bars or gummy bears. It’s nice, but it’s nothing major. And yet, there’s this tremendous level of engagement. From kids to grandmas, everybody wants to scratch. And it keeps them coming back to our app,” András says.
Thanks to this incredible response, Salling Group is looking to build on the momentum with the development of new, more complex games. The Group has found that it’s a very cost-effective loyalty strategy that pays off big.
“Again, it all ties back to simplicity,” he points out. “Previously, when we would run games, it was an operational nightmare because we’d have to allocate prices, make sure the cashier had the right barcode to scan, etc.
“This is another point where we give massive credit to Cheetah. The team linked together experience with loyalty. Once our customers play the game and win the product, a free product coupon flies into their loyalty app. The customer can then just pick the item up from the shelf and walk out without paying for it. The store staff doesn’t even need to know that we are running a game. That was a key parameter for us to convince our people at the store to let us run these games. It’s been critical.”
For the latest global consumer attitudes and trends in personalisation, privacy, messaging, advertising, and brand loyalty, check out Cheetah Digital’s 2022 Digital Consumer Trends Index here.
Interested in hearing leading global brands discuss subjects like this in person? Find out more about Digital Marketing World Forum (#DMWF) Europe, London, North America, and Singapore.