Amazing Race–Retailer Edition


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Your mission, should you choose to accept it: Create and launch a loyalty program to serve thousands of customers at 64 stores in 17 states, plus e-commerce, in just eight weeks

Many marketers would say creating and launching a loyalty program from scratch in less than a year, or perhaps even two, is impossible. But that’s old-fashioned thinking, according to national children’s apparel retailer P.S. from Ae?ropostale.
The company ramped up this year to plan and implement P.S. Rewards, a multi-channel rewards program that benefits customers who shop both in-store and online at P.S. from Ae?ropostale. P.S. Rewards rolled out on July 18, 2011, just in time for the lucrative back-to-school season. The free program is fully loaded—it offers both in-store and online enrollment, and customers receive one point for every dollar spent. At 75 points, members receive a $5 reward toward a future purchase. Additional benefits, such as access to VIP sales and events, a free birthday gift, and ’round-the-clock, online account access are also offered.

Elapsed time from start-up to implementation for P.S. Rewards was just eight weeks.

“We wanted the P.S. Rewards program to be simple to understand, easy to use from a consumer standpoint, and quick to execute on the business side,” says Scott Birnbaum, Senior Vice President of Market- ing and E-commerce for P.S. from Ae?ropostale. “We believed in the program and knew, given the right partners, we could achieve all three.”

Advances in technology have made quick rollouts like this possible. Today, real-time loyalty marketing solutions can be built that suit the needs and budgets of most mid-sized businesses, including retailers who have been scrambling to establish programs in response to customer and competitive demands. The best of these application platforms work seamlessly with third-party systems, whether in-house or off-site, and come with knowledgeable loyalty marketing consultation and advice. Moreover, they can dramatically accelerate the time it takes to create the data infrastructure that is crucial to planning and implementing successful loyalty programs.

The Race Challenge
Ae?ropostale, Inc., is a mall-based specialty retailer of casual apparel and accessories that caters to kids age 7 to 12 through its new brand, P.S. from Ae?ropostale. It was launched in 2009 and currently operates 64 stores in 17 states. Immediately following the new brand’s launch, its marketers spent a year of learning about their customers by gathering transactional data, using secret shoppers, performing surveys, and holding focus groups. Among other insights, they learned that moms wanted a program that rewarded them for purchases. But the company lacked consolidated data about their best and most loyal customers, and didn’t have a way to engage and communicate with them on a consistent, ongoing basis.

“We wanted a systematic way of identifying, recognizing, and rewarding our best customers, as opposed to the classic retail marketing strategy,” says Birnbaum. “We decided we were going to treat our best customers differently and we wanted to find a way to get them back into the store more often, having them spend more, and reward them for doing so.”

Birnbaum and his team pitched the concept to their board. After that, he says, it was “do it as fast as you can and get into it as fast as you can.” According to Birnbaum, the company didn’t want to redo its entire POS system or put its IT department “on the hook” for the program in any way.

To find a partner who could overcome these hurdles, Birnbaum conducted a formal selection process that requested responses to an RFP he and his team developed. By late April 2011, a vendor was chosen and the program began to take shape.

“The smartest thing we did was really clarify for potential partners, ‘This is what we’re after, this is what we might add on later, but this is what we’re focused on now,'” Birnbaum says. “So then, when we sent out the RFPs, we were able to ascertain instantly if a vendor would be able to deliver what we wanted.”

Managing the Roadblocks
For Ae?ropostale, achieving simplicity for consumers within a short time- frame wasn’t easy. Aside from watching the clock, other challenges included resource constraints, a virtually non-existent “getting to know you” ramp-up period between the company and the program vendor teams, the need to communicate with disparate stakeholders, and the need to devise a solution that integrated numerous and disconnected data sources. Internal and external team leaders say they overcame these potential roadblocks by working collaboratively and promoting open and honest communications with all stakeholders. That same philosophy was also carried into stores.

As the company got close to launch, the team set up department meetings to walk everyone through the final program details, focusing on the customer experience and setting initial program expectations. Post-launch, there were weekly meetings with key stakeholders, with an emphasis on IT, Customer Service and Store Operations. “We’re still overcommunicating to fine-tune and grow based on customer insights and ideas,” Birnbaum says.

Clarifying objectives up front is critical to a quick rollout, Birnbaum says. Companies must also have a defined system of metrics against which to evaluate the program’s success, and the loyalty team must educate the entire organization about what they will, and won’t, get right away with a rapid-fire implementation.

For example, the team was clear from the outset that the program was a tool to drive incremental store visits (and subsequent purchase). Although there was a lot of buzz at the company about the potential for loyalty to reward social behaviors, drive mobile activity and offer personalized content and communication, trying to develop those aspects of the pro- gram in tandem with rollout would have watered down the team’s focus. “It would have added time to the timeline and diluted the ROI without any intelligent insight to make it a worthwhile investment,” says Kimberley Brennan, Director of Customer Relationship Management for P.S. from Ae?ropostale.

Instead of developing everything simultaneously, the team decided to focus on the additional bells and whistles after the concept had proven itself, Brennan says. Initially, stakeholders were advised of the focus area timeline: First six months— enrollment; second six months— active member participation and enrollment; 13+ months—program growth and evolution.

The team also resisted the urge to create custom reports immediately. “We were able to get good visibility into the key program metrics at launch,” Brennan says. “We wanted to live with the program for a month or so, and then it became clear after time passed what we wanted to create reports around.”

Eye on the Finish Line
From the beginning, store leadership and associates were part of the devel- opment process. They were trained on the intricacies of P.S. Rewards using a “train-the-trainer” approach. When the program went live, cus- tomers were treated to a mini-party, complete with balloons, signs, and free Yo-Yos for kids, among other amenities. The P.S. from Ae?ropostale in-house creative team developed customer communications to promote the program, which included teaser emails, website announcements, and a launch package for every store.

There is a hidden payoff for quick rollouts, Brennan says. “The beautiful thing from a marketing standpoint is that we have a good shot at a really great ROI, whereas when you’re starting from scratch and building this enormous Rolls-Royce program, you’re in negative ROI land for two-plus years.”

To date, sign-ups are well ahead of plan and the program has exceeded expectations. Not only did P.S. from Ae?ropostale complete the amazing race in record time, but their loyal customers are big winners.

Phaedra Hise
As Senior Editor, COLLOQUY, Phaedra leads the creation of new editorial pieces for multiple distinct content platforms in the COLLOQUY media enterprise: COLLOQUY magazine, the Enterprise Loyalty in Practice journal, COLLOQUY web site, COLLOQUY social media blog, COLLOQUY Network Partner content commitments as well as other LoyaltyOne vehicles.


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