Before Sam’s Club, a chain of membership-only retail warehouse clubs owned and operated by Walmart, launched its highly successful Sam’s Club MasterCard 5-3-1 Cash Back program, members weren’t getting much value from the previous credit card offering.
Things have changed drastically for Sam’s Club in less than a year as its Sam’s Club MasterCard 5-3-1 Cash Back program, which is managed by Synchrony Financial, has created keen customer engagement and memorable customer experiences.
During a compelling workshop session titled, “A Proven Process for Developing a Winning Value Proposition,” on Monday during the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, Hiren Patel, Director of Financial Services, Sam’s Club stressed that Sam’s Club wanted a simple and transparent program for its members. The Sam’s Club MasterCard 5-3-1 Cash Back Rewards program fit the bill perfectly.
“It’s simple, easy, and members love it,” Patel said. “We want it to be used outside of Sam’s Club as well.”
Patel said Sam’s Club launched its credit card program in 2005.
“A credit card product usually turns over every 10 years,” he explained. “Most of our members were not seeing a lot of value in it. We needed to change our value proposition.”
Enter the Sam’s Club MasterCard 5-3-1 Cash Back Rewards program.
With the Sam’s Club MasterCard 5-3-1 Cash Back Rewards program, Sam’s Club members are eligible to earn cash back on purchases made with their Sam’s Club MasterCard account. Reward percentages depend on the type of purchases made: 5% cash back on gas at almost any U.S. and Puerto Rico gas stations (exclusions apply) and on gas at Sam’s Club and Walmart, 3% on dining and travel (exclusions apply), and 1% cash back on all other eligible purchases. Members can earn a maximum of $5,000 in Cash Back rewards in a calendar year.
The new program drives top of wallet behavior, increases sales in and out of the Club, encourages new membership sign-ups and credit applications for the Sam’s Club MasterCard, and promotes loyalty within its member base.
Patel said that in the first six months of the new value proposition, Sam’s Club saw a double-digit growth in active accounts, double-digit growth in transaction frequency, double-digit growth in sales, and double-digit new account growth.
Patel said there was active engagement from several executives to “sell this” and, as a result, the program has helped “re-energize a brand. This company has a ferocious passion around taking care of its customers.”
Sue Yasav, Research Insights Leader, Synchrony Financial said that, as a rule of thumb, a company should change its value proposition every four to five years.
Yasav explained to attendees how to successfully develop and implement a winning value proposition.
When do you change your value prop?
When it isn’t getting results you’re targeting
It no longer aligns with the brand promise
The majority of customers can’t access benefits
Developing a new value proposition will:
Delight customers; make it relevant, differentiated, credible, and drive results.
The Process:
Map the CX: The brand promise and customer experience are key drivers of the right value proposition
Stakeholder Input: Understand which value props are acceptable and unacceptable to them (IT, Operations, Sales Associates, Customer Service, Human Resources, Marketing, Finance, Investor Relations, and Legal)
Ideation: Used to be called brain-storming. Gather new and innovative ideas.
Analyze Costs vs. Benefits: Ensure the right financial model is used. Be diligent about assumptions (anticipated benefits, costs, and returns of the new program). Be prepared for several iterations.
Know your customers: Understand the needs, wants, and delights as well as pain points. Perform a competitive analysis to develop uniqueness and differentiation. Design and analyze several structures. Assess combinations of benefits and structures (points-based, promo financing, cash back, tiered, emotional, experiential, membership).
Harmonize: The value proposition should address how a customer shops across all channels and ensure a seamless brand experience.
Commercialize: Positioning statement, marketing message, marketing plan, marketing channel optimization, and associate training and engagement.
Pilot/soft launch: Reduces the risk of a full launch of an untested program; clarifies executional elements; provides insights into customer uptake and reaction; helps estimate costs of full launch.
The Sam’s Club MasterCard 5-3-1 Cash Back program secured three awards at Monday’s 2015 Loyalty360 Awards ceremony. The program earned a Silver Award in the Best Customer Experience & Engagement category; a Bronze Award in the Best Creative Campaign in Loyalty Marketing; and a Silver Award in the prestigious 360-Degree Loyalty, North America category.
Loyalty Expo is which is being held April 27-29, 2015, at the Loews Royal Pacific Resort at Universal Orlando in Orlando, Florida.