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Editor’s Note - This story was originally published in June's Loyalty Management Online, and is part of Loyalty360’s “Best of 2016.” We wish you and your family a happy holidays, and will return to our regular content schedule in 2017!
“What makes us unique is that, as of last year, we are the first loyalty program to move from a code-based program to a program where you collect points by uploading an image of your receipt, or linking a nation wide selection of retailer loyalty cards directly to our program,” Mark Staples, Associate Director of Kellogg Family Rewards, shared with Loyalty360.
Prior to implementing the current system, Kellogg’s customer loyalty program was similar to some other CPG companies.
“We made that leap from hand entering codes and having to print those in pack to a much easier and efficient way of participating in the program,” Staples added.
Like Kellogg, more and more grocery chains are linking to their loyalty programs, though Kroger, the nation’s largest super market chain, remains on the sidelines.
“We have a list of retailers that participate in that loyalty card linkage,” Staples explained. “When we have discussions with our retailer partners, and since we launched last June, we have had several retailers join and integrate into the program after seeing how it works and how some of their competitors are linking their cards. The basic message is adding additional value to that retailer card.”
Consumers win because they effortlessly collect points in the Kellogg’s program while simultaneously reaping the benefits associated with the retailer’s program. One purchase, in effect, does double duty in that regard.
Retailers also enjoy the fact that the Kellogg’s program incentivizes shoppers to join the store’s program if they’re not already part of it.
“The majority of shoppers already have their retailer cards in their wallets or purses,” Staples said, Although, we do work with our retailer partners to promote new loyalty card shoppers and say ‘hey, if you are shopping at this retailer, and you don’t have their card, it might be a great time to sign up for it.’”
Linking the two is a simple process.
“You simply enter the number on your store loyalty card onto our site once, we validate it on the back end and send you a validation,” Staples explained. “Then with every purchase moving forward, those points go right into your account.”
The Kellogg’s site can also help consumers find participating retailers with a search-by-zip code section of the “Link Your Card” section of the site.
That other companies aren’t doing this is somewhat baffling, though the technological aspects may be an inhibitor to some.
“The technical integrations were one thing,” Staples said. “The more difficult part was the communication. We had to be very cognizant of whom we had in the program currently and how to communicate the changes when we made those changes back almost a year ago. For the technical integration we chose the partners that we were very comfortable with.”
The technical integrations, although they were somewhat difficult, were less of a challenge as opposed to figuring out just how to communicate to existing members exactly what was changing and what was not.
“Since we were making a very big change in how you collect points, we made a huge effort not to change much else in the program,” Staples added.
For example, the items being offered stayed the same and the point values that needed to redeem for rewards also stayed the same, and the point values for items in the program for purchases did not change.
“It was more about how we communicated the change and then the plan to transition members from the one mechanism of collecting points to the newer ways to do that,” Dave Altman, Associate Director, Kellogg Family Rewards, explained.
The inspiration to develop the current program came not only from a recognition of the rise in mobile integration among consumers, but from feedback provided by consumers.
“Over the years through our consumer affairs group and also on our Facebook page, one of the most common pieces of feedback was ‘hey, I can’t read the code’ or ‘this code doesn’t work’ and we saw that as an opportunity to improve the system,” Altman explained.
The old system simply had inherent bugs.
“Obviously, when you are printing codes in millions of packages a year, it is a large undertaking and there is always going to be some sort of print issues along those lines,” Altman said. “Then you couple that with that crossover point of new technology in the market place, and with the adoption rate of people using that technology.”
It became clear that a move to receipt scan was the way to go.
“The timing just made a lot of sense,” Staples said.
Customer reaction, overall, has been positive, Staples noted. “Going into the program we knew that we were moving people from a code-based program to a program that is not code-based,” Staples said. “We knew that certain demographics would react differently to those changes.”
Kellogg recognized that the boomer segment might not adopt as quickly as say, the millennials.
“We have seen that in the change, but we are also seeing a lot of people adopting the new process and a lot of people doing both,” Staples explained. “We are seeing people adopt all of the different technologies and as we stop printing codes in pack and as those codes are not on the shelf as much, we are seeing a very high rate of use of the two new methods.”
Kellogg plans to stay at the forefront of loyalty marketing.
“We obviously want to keep ahead of what is trending,” Altman added. “We feel like we are out in front of some of the new technology with the ways to collect points. We are keeping track on a week to week basis of how that is going. We also have a consumer panel that we have built out of our consumer database that we can continue to talk to and turn around quickly these types of inquiries and surveys on the latest and greatest apps are out there for submitting receipts and doing this different type of activity.”
Kellogg monitors how accepting consumers are of new technologies, such as certain mobile apps. “We know that we have got to keep our finger on the pulse with our consumers and make sure that we are keeping up with them,” Altman said.
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