Nuts & Bolts - Case Study: Digital Rewards for Loyal Tech Customers
Challenge: Acquire loyalty
Solution: Add a layer of non-proprietary online rewards to facilitate instant redemptions.
Results: Since complementary program implementation, 25 percent of the instant online rewards redemptions have been from new members.
It may seem intuitive that Sapphire Technology, a manufacturer and supplier of graphics cards and mainboards, would offer its loyalty club members digital rewards. After all, it has a severe-looking, cross-armed female avatar staring down anyone daring to visit the rewards page. But it did take Sapphire a few months to offer that aspect of instant gratification to its Sapphire Select Club (SSC) members.
The Hong Kong-based company with a Canadian office in Markham, Ont., launched its loyalty club in October 2009 by offering members exclusive product information, access to events and contest prizes ranging from Honda scooters to iPads. But by summer 2010, the company decided it was time to offer Sapphire's tech-savvy customers instant online rewards, says Adrian Thompson, Sapphire's vice president of marketing and loyalty.
In June 2010, Sapphire tapped Santa Ynez, Calif.-based online instant rewards and incentive service TheFirstClub.com to offer loyalty club members digital prizes.
SSC members who purchase products from Sapphire are eligible for online currency that can be redeemed for downloadable music, games, software, mobile applications, audio books and eBooks. Movies may also soon be available.
Thompson says Sapphire placed online advertisements and sent emails to its loyalty club members to alert them to the new rewards. Information also appeared on the website, in newsletters and on social networks.
These new rewards also meant adding a membership tier. SSC Silver membership provided the old rewards. SSC Gold membership added in the digital rewards, as long as Gold members completed a form requesting their graphics card serial numbers in addition to the data the overall membership form requests—name, email address, and more specific information such as birth date, gender, areas of interest, product interest and opt-in possibilities for Sapphire's email list and "screened third party" marketing.
Depending on the purchase, Gold members receive vouchers for 25, 50 or 100 "ClubCoins," which they can redeem for digital rewards, Thompson says. Since including the digital prizes in the SSC, Sapphire's run six separate rewards campaigns.
"Sapphire Select Club had a very high redemption rate for the vouchers," Thompson says. "[It's been] 100 percent over the course of all six programs, and an average of 25 percent of the redemptions were from new members who joined SSC to receive the first club [rewards]."
At the same time, SSC has continued to grow overall. Since starting the loyalty program in October 2009, Thompson explains that the club has grown at an average rate of 36 percent a quarter. He says the club is effectively "gaining, retaining and rewarding loyal customers of Sapphire."
Plus, the new digital offerings provide another level of satisfaction. Now all the loyalty club members greeted on the rewards redemption site by Sapphire's stern, cross-armed female avatar can spend more time with her cousin in graphic representation, the intense gun-toter Lara Croft, by downloading that Eidos video game as the instant reward.