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Walgreens Drives Customer Engagement through Personalized Marketing

Walgreens has a powerful loyalty program, Balance Rewards, which has a membership hovering around 130 million.

Reaching that lofty status, from a membership perspective, didn’t happen over night.

Mindy Heintskill, Senior Director of Loyalty and Vendor Collaboration, Walgreens told attendees during her Tuesday session, “Driving Customer Engagement and Sales Growth through Personalized Marketing,” at the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, that she started at the company around the time the Balance Rewards loyalty program launched in September 2012.

“We’re getting great engagement in the loyalty program,” Heintskill said.

Why did Walgreens start Balance Rewards?

“We wanted to thank our customers and gain customer knowledge and customer behavioral data,” Heintskill said. “It’s important for us to focus on retaining best customers. Data is very important. Walgreens doesn’t make any assortment decisions without looking at customer data. We had the opportunity to be more personalized. We have a commitment to testing. What we’re doing now is very traditional. We have all kinds of tests going on through different forms and different channels. You can’t be customer-centric on your own.”

David Hess, Head of Analytics, emnos told attendees that there are five key principles for implementing a successful personalized marketing program:

Prioritize Loyalty

Drive greater retention of best customers

Engage Vendors

Personalize:

  • Target at most granular level possible
  • Customer behavior key targeting driver

Selecting the right channel:

  • Contact customers where engaged
  • Convenient to use and timely delivery

Make it measurable:

  • Long-term control group
  • Analyze behavior
  • Test & learn for continuous improvement

More than 70% of Walgreens’ sales come from the Balance Rewards card. The average loyalty basket is 30% higher than any non-loyalty basket. More than 600 billion points have been earned from the program.

Impact:

  • Leverage customer data internally and with suppliers
  • Increased sales for customers engaged in points

Lisa Zhao, Sr. Manager of Loyalty and Vendor Collaboration, Walgreens told attendees that the test and learn concept is “essential to successfully expand and improve the program over time.”

Here are the key concepts that are tested:

Point offers vs. Dollar offers

Reward vs. Acquisition

Effect of Storewide Offers

Creative Optimization

“Our first challenge was to educate customers to adopt the new concept of earning and redeeming points,” she said. “Points have proven to be an effective currency, setting the foundation for program success. Storewide offers are a worthwhile investment in driving customer engagement. Delivering highly relevant reward offers has a significant impact on program performance.”

At Walgreens, coupon creative continues to be tested, balancing program innovation and customer expectation.

What’s more, the journey of digital expansion has broadened customer reach, while incorporating customer contact preference.

“Continuous learning has enabled us to grow customer engagement along with program reach,” Zhao said. “Personalized marketing has ultimately created a virtual cycle between loyalty and profitability. Looking ahead, personalized marketing will continue to evolve.”

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