News

Young America short-term rewards result in 10 percent sales lift

November 7, 2011

Loyalty programs that are structured like promotions may generate significant short-term sales lift, according to Young America, an incentive marketing firm. With 40 years of experience and more than 300,000 marketing programs, Young America said it provides the full range of customer engagement and incentive services for its clients, including data analytics, strategy, rewards, and communications and program management.

A new retail rewards program, which uses a limited-time-only concept to drive immediate sales (think "McRib"), generated a 10-percent sales lift among participating manufacturers during a four-week pilot program in July.

The program redefines the way rewards and loyalty programs are utilized, and has the potential for significant return-on-investment, according to Lori Johnson, account executive of Young America.

"A typical loyalty program may run for years and take on a life of its own," said Johnson. "This short-term program is run more like a sweepstakes promotion — except everyone who participates can win. Overall, the program is about customer engagement and short-term sales lift over a defined period of time, and is an effective way to address seasonality."

The retail rewards program may be launched in 60 to 90 days. Here is how it works:

• Young America works with a national retailer to design a short-term points-based rewards program and establish a time frame.
• The retailer invites shopper marketing teams to include their products in the promotion.
• Consumers sign up to participate and collect points for buying specified products during the promotion period.
• Consumers earn points that can be redeemed online for merchandise, gift cards or other rewards.

Nearly 30,000 consumers registered for Young America's pilot program between April and July 2011. During the program, participating manufacturers saw their products significantly outpace category growth, some showing as much as eight- to 10-percent year-over-year growth in same-store unit sales. In addition, 90 percent of the rewards were redeemed in the form of retailer-branded gift cards, which consumers tend to spend back at the retailer, thereby increasing the program's ROI.

"As the economy continues to remain stagnant and consumer confidence struggles to improve, retailers are searching for creative ways to get shoppers into their stores for the crucial holiday season," said Johnson.