Engagement / Loyalty / Profiles / Shopper Marketing
Loyalty outside the chocolate box
- 10th May
- Power Marketer 18
In a melt-in-your-mouth marketing execution, legendary Godiva Choclatier turned its in-store loyalty program around with an innovative new strategy. The outcome was delicious.
Luxury chocolate manufacturer, retailer, and wholesaler, Godiva Choclatier has grown tremendously over past three years, since the Campbell Soup Company, which had owned the Godiva brand for 44 years, sold it to Istanbul-based Yildiz Holding for $850 million in late 2007.
During this growth period, the Godiva US division of the business set out to embrace and improve customer loyalty by creating a uniquely personal and relevant shopping experience for each shopper.
While Godiva had always had an enterprise goal of “putting the customer experience front-and-center of the brand in order to differentiate Godiva in a commoditized market” as a core value, their customers had become frustrated with the company’s previous loyalty methods.
Until that point, the in-store loyalty program was completely manual where customers were required to fill out a customer information card and if they were lucky, might have received a Godiva welcome email within thirty days (if at all). In an attempt to track customer activity, staff were also still asking for customer’s phone numbers at the POS.
While online, Godiva had been slightly more successful in capturing customers’ information, they were lacking the ability to truly analyse multi-channel customer data. Godiva’s retail and online businesses had grown with minimal synergies between the two, and many of the promotions and customer communications were directed at customers’ behaviors within specific business channels, but not as a multi-channel customer.
The company realised it would be necessary to completely re-write the way they had been valuing their customers in order to reward their customers’ specific behaviour.
STRATEGY
The new loyalty program, from Godiva’s point of view, would:
- Encourage customers to keep Godiva in mind throughout the year instead of being considered for seasonal and gifting occasions only
- Be a cross-functional solution that allowed us to analyse multi-channel customer data, and reward our customers in-store and online
- Have the ability to track customers no matter which channel they were shopping in with purchase history accumulating whether transactions were taking place in-store or online
During the process of designing the new loyalty program, Godiva also seized the opportunity to involve their customers in the process. Vice President for Godiva Direct, Kim Land told COLLOQUY that Godiva was fortunate to have a consumer base devoted to the brand.
“The best way to get customers more engaged with us is to offer more frequent and more beneficial opportunities to interact with us,” she said.
So, Godiva consulted with a 400-member, invitation only, online community regarding the design and rewards structure of the new loyalty program. It was this research, combined with traditional focus group testing, that indicated the most motivating theme behind the program would need to be free chocolate, regularly.
The new loyalty program, from their customers’ point of view, would:
- Offer meaningful reward/value
- Allow customers to indulge in the latest Godiva products
- Spoil customers in the company’s 275 retail store boutiques
The team at Godiva were able to successfully incorporate each of these elements, and introduce the Godiva Chocolate Rewards Club, which launched at the beginning of October, 2008.
The main concept of the Godiva Chocolate Rewards Club (GCRC) was to give customers free chocolate each month in order to drive our business year-round. Signing up for the free membership would allow customers to earn a membership card, and supplying an email address would get them the monthly Godiva Chocolate Notes e-newsletter that included special monthly promotions, such as free shipping. Members of the GCRC would receive a free piece of chocolate once a month, simply by visiting a boutique. If they made a purchase of $10 or more (either in-store or on Godiva.com) they would receive a free gift – a two-piece ballotin box the next month by once again, visiting a boutique.
EXECUTION
Godiva began the GCRC implementation in three phases, with the Prelude Phase implemented in October, 2008. As part of the Prelude Phase, they were required to implement one of the two loyalty system applications and create the main loyalty database. The decision was made to take Godiva’s existing six million customer database and migrate into the new customer database, allowing them to retain any existing customer data and make the sign up simpler in-store or online.
Phase One was the most critical and rewarding for Godiva, which was to implement GCRC by employing POS-driven loyalty solutions in-store and partially on the web. Godiva identified the need to design the POS functionality in a user-friendly way, that wouldn’t frustrate in-store teams, and introduce an effective training program that engaged employees and encourages them to communicate the GCRC to customers in an effective manner. A high quality video training program was created to emphasise the importance of the GCRC, providing each boutique with the understanding they needed for buy-in and to be successful.
In late May 2009, Godiva went live with the GCRC with loyalty cards in-store. Customers began to utilise the physical GCRC bar-coded cards, redeem their free chocolates in-store, and accumulate spend towards their free two-piece ballotin awards.
(As customers were able to visit the boutiques to receive a free piece of chocolate each month without purchasing, the goal was to have a conversion rate for customers that made purchases in addition to the free piece above 70 percent, while loyalty transactions were to make up 40% of all sales.)
Phase Two, implemented in October 2009, was the last step of integrating the accumulated spend in-store or on the web. This phase also ran parallel with a Godiva.com website relaunch.
OUTCOME
Significant effort was put in place to report, analyse, monitor the sign-up rates, conversion, frequency, as well as financial implications of giving away the free chocolate.
The results of the GCRC were beyond Godiva’s expectations. Since the Phase One implementation in May 2009, the goal was originally to sign up 500,000 members by May 2010. By the end of 2010, Godiva expects to have over three million members. Over 50% of all sale transactions have a GCRC loyalty account associated with it, versus an original goal of 40%. Over 75% of all customers are adding on to their free one or two-piece awards and the average loyalty sale transaction is 20% higher than non-loyalty transactions when redeeming a two-piece award. Advocate and Top Tier loyalty customers are accounting for a significant percent of the overall loyalty sales. And, at the Colloquy Loyalty Summit held recently in Phoenix, Arizona, Godiva Chocolatier was awarded Loyalty Innovation in Retail for its ‘Godiva Chocolate Rewards Club’ loyalty program.
The GCRC was successful in differentiating value proposition that rewarded consumer engagement, purchase and frequency. Godiva is now able to profile their shoppers in relation to what they buy, how much they spend, how often they shop and in turn, create a brand distinction for each customer through the design and messaging of their ongoing communications.
Comments
Who would have thought giving out free chocolate would attract loyalty? Pretty amazing results from the campaign though – It’s interesting to see that there’s no mention of the use of social media in this program so I’d be keen to see how they’ve integrated that into the loyalty program.