How Icebreaker, a global sports clothing brand,is maximizing customer retention with a highly customized loyalty rewards program?
In this webinar Keith Ching, Global Head of eCommerce Digital Experience at Icebreaker, a global sports clothing brand, shared how they designed and implemented a global, multi-lingual, loyalty rewards program from Zinrelo.
This blog post includes the webinar recording, presentation and highlights the strategies that helped Icebreaker in maximizing customer retention.
Watch the webinar recording here:
See the webinar presentation:
Key highlights from the webinar:
Loyalty programs are the #1 revenue driver for retailers. Get ready to maximize customer retention by implementing a loyalty program.
9% of Macy’s loyal customers account for 46% of their revenues. 90% of ULTA Beauty’s revenues come from loyalty program members, they have cited the loyalty program as their key strategy to combat the Amazon threat.
A small investment in customer loyalty has the potential to generate exponential returns.
Let us go through the different sections in depth:
1. Icebreaker’s experience
Why customer retention is important for Icebreaker’s business?
- Typically for any retail business, the first purchase is not very profitable because of the high customer acquisition costs.
- However, from the second purchase onwards, the only cost to bring the customer back is the “cost to retain”. As a result, the second purchase onwards, the profitability goes up.
- As we move to the third or the fourth purchase, customers also start trusting the brand. Hence, they tend to buy more. This pushes up the average order value.
- The result is, profitability goes up even more.
As a global sports clothing brand, they were confident of their product offering.
Their objective was to convert these strengths into customer loyalty for Icebreaker as a brand.
Hence, they started looking for a loyalty rewards solution.
2. Loyalty rewards program requirements
There were 4 major considerations for Icebreaker, in selecting the right loyalty program:
- Having the right feature set was critical. For example, omni-channel capability was important to them. The program had to work both on their site and in-store.
- They were looking for a highly customizable platform, where they could make the program seamlessly merge with their branding.
- Multi-language capabilities were very important to them. They planned their pilot launch in the English. Then decided to launch in German, French and Swiss. The same program was to run across all sites. Zinrelo agreed to work with them and build the multi-language capabilities.
- The program must be cost-effective and provide a substantial ROI.
Icebreaker evaluated multiple vendors but selected Zinrelo because it met their needs perfectly.
Word of mouth played an important role too, they had heard good things about Zinrelo’s support services. Support was an important criterion for them.
3. Nature Rewards- The objectives
The name was chosen carefully resonating with the core brand essence i.e. nature, focusing on serving the sports clothing needs of those who want to be close to nature. They named the loyalty rewards program as ‘Nature.Rewards’.
Icebreaker started with the launch of the United Kingdom site and decided to keep the program very simple.10 points per £ spend, 10 points for participating in an annual survey etc.
- Increase customer loyalty towards the Icebreaker brand
- Introduce a tiered program that would encourage customers to make more purchases and move to a higher tier.
- Enable repeat purchases without offering too many discounts because that would dilute the high-end nature of the brand.
4. Strategy behind the tiers
Icebreaker was clear they did not want to offer just direct discounts to customers. They wanted to offer more exclusivity in terms of tiers. Give customers an opportunity to receive more value from every purchase they made. The tiers were as follows-
- Seeker level at 2,000 points or approximately 200 pounds in annual spend
- Adventurer level at 5,000 points or approximately 500 pounds in annual spend
- Natural level at 10,000 points or approximately 1,000 pounds in annual spend
They decided to offer an automatic reward when a member reached a certain level. Thiswas notpublished to build in the surprise element. For example, when a member reaches the ‘Seeker level’, they would receive a 20-pound gift certificate.
Their strategy was to build customer delight without diluting the brand with only discounts.
5. Seamless integration on the website
The loyalty enrollment experience had to be seamless. When a user visits the Icebreaker site they are presented with an option, toenroll in the loyalty rewards program. There is no additional registration needed.
The ease of accessing the program dashboard made it convenient for members to access and browse the loyalty rewards program. With just a simple website login, it would take them to the account dashboard with an option for ‘Nature Rewards’.
Seamless user experience was particularly important for Icebreaker. They did not want their users to think of loyalty program separately from their website.
Zinrelo allowed Icebreaker to create such a seamless experience.
6. User friendly loyalty dashboard
- Simplicity: An HTML div was dropped on the page and the loyalty dashboard was customised from the Zinrelo admin console.
- Ease of access: Members can browse the loyalty points history, opportunities for earning more points and reward redemption options.
- Customizable: They loved the fact that they were able to customize the loyalty program to completely match the Icebreaker brand guidelines.
- Flexibility: When a member reaches a new level, they automatically receive a gift card. In addition, they receive exclusive rewards as Free Shipping once they reach a certain level. Icebreaker was able to control the visibility of different rewards at each member tier.This allowed them to incentivize the customer and motivate them to move to the next level.
7. Product page integration
Mention of reward points information with every product. The two-fold benefits:
- It informs the customers about how many points they will earn for that product and it introduces them to the loyalty rewards program.
- Additionally, since the customer knows that they will be earning a reward, this increases conversion rate.
Placing the loyalty rewards program on the product page is very important because this page is visited by every member wanting to make a purchase.
8. Multilingual capability
Icebreaker is launching the rewards program in multiple languages namely- English, German, French.
With Zinrelo’s loyalty platform extending the rewards program in multiple languages became simple. The entire loyalty program dashboard is automatically shown in the member’s preferred language.
Zinrelo’s loyalty program can add other languages as well.
This capability has been critical in fueling their international launches and creating stronger customer connect.
The Icebreaker loyalty rewards program results:
- Increase in the repeat purchase frequency
- An upward shift of members to higher tiers i.e. Seeker > Adventurer > Natural. This shift highlights the loyalty program effectiveness.
- A higher per-customer revenue every year was an important objective for them.
The loyalty rewards programdraws customers even closer to the Icebreaker brand. The idea was next time they want to purchase any sports clothing, they should purchase from Icebreaker.
- A phased approach to the program launch worked well. It was decided to keep the initial program simple and gradually add more options.
- A pilot launch in the UK was done before proceeding with North America and other European countries. This helped Icebreaker understand customer expectations and streamline the program operations.
- Initially launched with a simple English-only program in the UK, they kept multiple-language support for later. This allowed them to take one step at a time, while ensuring that each step was solid.
- It is expected that the Average order value and per-customer revenue, will be higher for loyalty program members at higher tiers.
Benefits working with Zinrelo:
- Robust platform
- Phenomenal support
- Prompt response from the team
- They went out of their way, to build the program while making things happen
Excerpts from the Q&A section of the webinar
Q: How important is a loyalty program in your overall strategy?
A: Very important, it is giving us a reason to award our repeat customers.
Q: What are the implications of difference in currency rates on the loyalty program for different countries?
A: Keep the mechanics similar in different countries. From a currency hit rate perspective, it’s not much of an impact. Businesses must set the threshold for rewards. Since the program is fully customizable, you can take the necessary call region wise. What’s important is, the account a customer has in a specific site/ region should not be portable to another. This way all points and currency rates issues are not global. The eCommerce website is site and country specific.
Q: Are you using gamification on the loyalty program?
A: Yes, the tiering is an implicit gamification. We are creating experience or activities for each of the tiers. It depends on a brand, how to offer the possible rewards associated with each tier to incentivize members to earn points for moving to the next tier. At Icebreaker, we typically don’t talk much about points except on product page or the shopping cart. We rather associate rewards with each of the levels named closely to the brand tonality. Points is just a currency customer earns as they engage with us.