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Loyalty trends and best practices

Financial Modeling Guidelines for Loyalty Programs

by Julia Leyrer
August 08, 2017
Financial Modeling Guidelines for Loyalty Programs

Loyalty programs are not risk-free endeavors. An organization’s CMO and CFO demand to know the ROI of all initiatives, especially for a large undertaking like a loyalty program. Brands are slowly changing their perspective of programs to revenue generators, as opposed to continued cost centers. This, in turn, necessitates the need for a complete financial analysis to understand the income statement, balance sheet, and cash flow implications of your loyalty initiative. The financial modeling process for a loyalty program is a complex one, involving large data sets and customer assumptions based on understanding behaviors of a subset of members. Several inputs influence the program’s impact across enrollment, revenue, cost, and profitability. A credible financial model allows you to have the confidence that... Read more

Watch-On-Demand: 10 Ways To Personalize The Holidays

by Arif Damji
September 18, 2014
Watch-On-Demand: 10 Ways To Personalize The Holidays

Did you miss our recent webinar with Merkle? The joint webinar is now available to watch below and features Merkle's VP of Personalization, Zimm Zimmerman, as well as 500friends' Senior Director of Strategy, Arif Damji, as they both explore ways retailers can enhance personalization for their customers. They highlight how loyalty programs further enhance personalization for members through the data collected and aggregated. Learn how to use the holiday season to drive long term loyalty throughout the year... Read more

Loyalty Makeover: Abercrombie & Fitch

by Zach Woith
March 24, 2014
Loyalty Makeover: Abercrombie & Fitch

In this installment, we look at the loyalty program at Abercrombie and Fitch, the $4.1 billion fashion retailer with over 1,000 stores, and brands including Abercrombie Kids, Hollister, and Gilly Hicks. 500friends Loyalty Makeovers offer suggestions to retail brands for making the most of their loyalty initiatives. What Abercrombie and Fitch's loyalty program looks like today: Abercrombie and Fitch's loyalty program distinguishes itself from cookie-cutter loyalty programs by embodying the brand's tone and effectively addressing core customers. Benefits include free streaming of music playlists, the chance to skip lines at events, and members-only birthday offers. Limited-time promotional offers keep the program fresh and relevant. First impressions: Abercrombie and Fitch is attempting a turnaround, with revenue dropping 12%, to $4.1 billion, and profit falling 77%, to $54.6 million, during ... Read more

Retailers with Private Label Credit Cards Also Need Loyalty. Here's Why.

by Ashley Bienvenu
March 20, 2014
Retailers with Private Label Credit Cards Also Need Loyalty. Here's Why.

In his new post on DMNews, 500friends Director of Strategy and Development Arif Damji talks about how retailers with a private-label credit card (PLCC) can reap big benefits from also having a robust loyalty program. The major points Damji makes are that: loyalty programs make PLCCs look more attractive, loyalty programs positively impact churn and lifetime value of mid-tier customers, and loyalty programs allow for direct, flexible communication with program members… Read more

Loyalty Makeover: Office Depot

by Ashley Bienvenu
March 11, 2014
Loyalty Makeover: Office Depot

In this installment, we look at the loyalty program at Office Depot, the $17 billion office supplies retailer with 1,900 stores that recently merged with Office Max. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives.In late 2013, Office Depot completed a $1.2 billion merger with competitor Office Max. In this Loyalty Makeover we'll look at both programs, and we'll examine the opportunities in merging them. What the Office Depot and Office Max loyalty programs look like today: Office Depot Rewards lets members earn rewards for purchases of ink, toner, paper and copy/print/ship services. Members can also earn rewards for recycling used ink cartridges and completing member profiles. Members who spend at least $200 in a calendar quarter achieve Choice status, which allows them to earn extra points through purchases, made either in-store or online, for products in up to... Read more

Loyalty Makeover: Ace Hardware

by Arif Damji
February 28, 2014
Loyalty Makeover: Ace Hardware

In this installment, we look at the loyalty program at Ace Hardware, the $3 billion hardware store co-operative with 4,700 locations. Loyalty Makeover offers suggestions to retail brands for making the most of their loyalty initiatives. What Ace Hardware's loyalty program looks like today: Known as Ace Rewards, the Ace Hardware loyalty program rewards members with in-store discounts ("Instant Savings ") and a points currency for all purchases. Members collect 10 points for each dollar spent and get 1,000 points for enrolling. Once they reach 2,500 points, they receive a coupon for $5 back on their next purchase, equating to a 2% funding rate. The private label Ace Rewards Visa Card allows members to augment their Ace Rewards point balances with up to 10 points per dollar spent. First impressions: Ace Rewards is unusual among retail loyalty programs in that its benefits include both a preferential member price as w... Read more

Loyalty Makeover: AutoZone

by Zach Woith
February 20, 2014
Loyalty Makeover: AutoZone

n this installment of Loyalty Makeover, we look at the rewards program at AutoZone, the $9.1 billion automotive parts retailer with more than 5,000 stores. Loyalty Makeover suggests ways for retail brands to make the most of their loyalty initiatives. What AutoZone Rewards look like today: Members sign up for AutoZone Rewards at a physical store, where they receive a Rewards Card linked to their account. For each purchase of $20 or more, online or in-store, members earn one "credit." When members accumulate five credits, they receive a $20 voucher for in-store redemption. The expiration period for credits varies by state, however in most states members must earn their 5 credits within a 6-month period and redeem vouchers within 3 months. First impressions: AutoZone's financial performance has been fantastic over the last 12 months, with its stock jumping more than 42%. That said, the company could be doing even better... Read more

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