Loyalty on the Go

Fast-growing footwear retailer Rack Room Shoes has always had a good grasp on its customers and their wants and needs. However, the retailer never began building a formal loyalty plan until the first quarter of 2012, which actually created an advantage.

“We have a good, loyal base of predominantly moms,” said Jan Mauldin, director of corporate marketing, Rack Room, Charlotte, North Carolina, which operates 390 stores. “We wanted to better understand their behaviors and shopping preferences. They won’t buy what they don’t care about.”



Realizing there was lack of a loyalty skillset in-house, Rack Room contracted with Denver-based CRM marketing agency Customer Communications Group Inc. (CCG) to help develop the necessary solutions and knowledge base necessary to support a top-quality loyalty program. Rack Room’s existing CRM program was supported by a homegrown customer database and primarily used email communication with customers.



“We had a unique ability to launch a loyalty program from a digital and mobile perspective, because there was no existing infrastructure to worry about,” Mauldin said.



CG provided expert personnel and data management services, and also connected Rack Room with SmartButton, a third-party provider of a Microsoft SQL-based database, to track loyalty dollars and points. The resulting loyalty program, launched in April 2013, is completely based on mobile technology from the consumer standpoint



“There are no loyalty cards,” explained Mauldin. “You sign up on a microsite with your email, which is easy and fast. Your email address is your membership number. Enrollment has far exceeded our projections and is now more than 2 million members.



Getting Personal: Rack Room automatically tracks customer spending, and will send customers a reminder message when they are close to obtaining a loyalty reward to encourage further purchases. The retailer is currently classifying customers into about 10 to 15 segments based on such behaviors as frequency of visits and spending totals, and designing specific strategies for each.



“If a person mostly shops clearance, we want to encourage them to shop more than clearance,” Mauldin said.



Looking ahead, Rack Room plans to take over all data management and analysis from CCG by the end of 2015. In addition, the retailer wants to take advantage of the unique capabilities of mobile technology in several ways.



“We’d eventually like to do real-time, one-to-one communications,” Mauldin added. “We’re testing some geotargeting now, pinging members when they’re in the mall and near the store. As we get our member base larger, we get smarter.”