Card Sharps: How Hallmark reinvented its loyalty value proposition

 
July 21, 2010 | by Sharon Goldman

Hallmark is an American classic, a nearly 100-year-old, third-generation family-owned company with deep roots in Kansas City, Missouri. But even long-standing, venerable companies sometimes must shake things up. When Hallmark realized it needed to freshen up its Gold Crown Card loyalty program—the first of its kind in the greeting card industry—which serves Hallmark Gold Crown retail stores, it knew that finding out what customers, retailers and corporate really wanted from the program was key to its revamp.

According to Andy Rieger, Marketing Strategy Leader, Hallmark Cards, the loyalty program was one of the most significant and successful marketing programs in the company’s history. However, by 2006 his team was concerned that the program was becoming less top-of-mind for these three groups—and knew it could be better.

"From consumers, we heard that the program lacked immediacy in-store, and the point-earning-to-certificate-delivery transition took time," says Rieger. "While the Gold Crown Card was motivational in terms of buying greeting cards, it was less so for the total store, so we wanted to expand its overall appeal."

From retailers, Rieger’s team also discovered concerns that the program was viewed as an expense as opposed to an investment, and that it lacked "freshness" to drive consumer and sales associate engagement.

And Hallmark corporate representatives believed the program was motivational for fewer program participants than it had been early on in its tenure. "The appeal of the program narrowed to a relatively small group of consumers," he says.

Taking advantage of the loyalty program’s database as well as company research, the revitalized program, Crown Rewards, was born in 2007. Today, it features better targeting and new tactics—including a tiered format that delineates consumers based on their card and total store purchases.

"We wanted to increase membership revenue growth in both the total store and the card category, so we needed to motivate trips," says Rieger.

The vast majority of greeting card buyers are women, and understanding the needs of this core constituency is essential to the success of Crown Rewards. "Women are extremely savvy and know how to maximize their benefits," he says. "But they also wanted a variety of rewards—some that provided immediate benefits and others that were earned over time."

Hallmark’s research led to several consumer insights that guided the development of Crown Rewards, Rieger says, including three primary behavioral drivers: immediacy—recognizing and rewarding a member each time she shops; simplicity—making the program easy to follow; and recognition—saying thank you and showing appreciation for her business. Open, regular communication was also important. To fulfill those essential drivers, Crown Rewards now uses a three-pronged framework designed to build profitable customer relationships:

Rewards:  

Crown Rewards now more directly rewards total store and card purchases, with a new total-store offer and an everyday three-card 100-bonus-point offer. As point-earning opportunities increased, so has reward certificate delivery, which is a key trip driver—creating a positive cycle.                                                                             

Communication:

The biggest advance in communicating with Crown Rewards members, says Rieger, is a "Retailer Customized Marketing" tool giving the company’s retailers access to their consumer database to create customized mailings. "We also went digital by implementing e-statements," he says. And mailings throughout the year, not just seasonally, keep the program top-of-mind, and incent customers to achieve higher program tiers.

Recognition:

The three-tier Crown Rewards structure now recognizes members by graduating them to higher levels as they spend more. In addition, recognition-based offers, such as rewards coupons, now show members how much they’re appreciated.

For Rieger, listening to customers—and understanding the program’s database—has created a Hallmark Crown Rewards program that works well. As he says, "Our customers were guiding the path for us."


Topics: Customer Service , Loyalty Programs , Marketing , Retail - General , Stats and Facts


Sharon Goldman / In her role as Senior Editor, Sharon writes and edits stories for COLLOQUY magazine. She helps develop future communications and research initiatives, and also works on white papers and thought leadership content for other lines of business within LoyaltyOne.
www View Sharon Goldman's profile on LinkedIn

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