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May 17, 2006
Case Study

How to Grow a Shopper Loyalty Club: Brick & Mortar Retailer's Email & POP Test Results

SUMMARY: Have you gotten a bunch of shoppers and prospects to sign up for your emails ... but you're not doing much with the list? Are some of the names so old you worry they're no good anymore? Discover how a North Carolina chain retailer (in an incredibly competitive market niche) turned its old list into eager Loyalty Club sign-ups. Includes creative samples of great POP displays as well as segmented email efforts that drive both store traffic and word-of-mouth Loyalty Club memberships.

The good news was that Great Outdoor Provision Co., a brick-and-mortar retailer now with nine locations in North Carolina, started collecting email addresses from customers back in 1999. 

The bad news was by 2005, "we had around 7,000 email addresses, but we didn't really do anything with the list," says Lin Peterson Senior Marketing Manager.


(MarketingSherpa Note: Peterson's not alone.  We hear this same thing from many marketers.) 

Since the company didn't sell directly online, email campaigns weren't considered mission critical.  But in 2005, the company started expanding, adding two new locations. Plus, the competitors such as REI were more frequently in the in-box.

Peterson wanted to start mailing the email far more aggressively. But, he worried about low response rates because the list couldn’t be segmented easily and also about being seen as a spammer by recipients who might have forgotten they ever signed up.

How could he turn an old list into an eager, active list of willing email recipients?  


Peterson decided to launch an entirely new shopper loyalty program, mixing the best of in-store and email marketing. 

Step #1. Re-engage with old list members

Rather than grandfathering the old email names into the new program, Peterson decided everyone would have to re-apply for "membership." Loyalty club membership was free, but required registration with a few key facts (ZIP Code, preferred outdoor activities, involvement in scouting, etc.) to help with segmenting later email messages.

In the early fall of 2005, he sent the old list an invitation to join the new "MULEteam" loyalty club.  (Link to sample invite below.)

Everyone who did join was placed on a new list, and naturally any hard bounces were removed from old list completely. But what to do with the remainder? Peterson decided to continue mailing these folks for the time being as if they were MULEteam members, but they would not be able to activate any of the club offers, or receive their membership card for use in store, until they joined.

The remainder of the old list was carefully segmented from the new list. Peterson watched results and planned frequency of sends to this list separately from the new MULEteam folks. And, if a name didn’t open or click on a single email after six messages were sent that name was deleted.

His ultimate goal -- to graduate every willing consumer onto the new list and to ultimately get rid of the old list entirely.

Step #2. Post Point of Purchase (POP) offers  

Next, Peterson devised bright green Point of Purchase signage for special 'MULEteam-only' offers. (See link below for sample sign.) In addition to routine year-round specials such as a discount on fly-fishing equipment, he picked a new in-store item every couple of weeks to feature as a MULEteam-only special.

Although he armed the store clerks with paper sign-up forms for busiest days, Peterson fretted about the quality of paper sign-ups. Sometimes data entry can't read the handwriting to get a correct email address or name. So, Peterson asked in-store staff to direct new sign-ups to an in-store kiosk whenever possible.

The kiosk: a Mac sitting in a "rough-hewn" kiosk (to match the feeling of the store) placed as close as possible to the store check-out line. 

It was hooked up to regular registration form on Great Outdoor Provision Co.'s actual live Web site, instead of an in-store only display screen. "I wanted customers and staff to see the real site and get used to using it," Peterson explains.

Step #3. Garner more names from forward-to-a-friend

In addition to whatever special offer was on tap that week, every email sent to MULEteam members always featured an in-house ad for MULEteam membership. Why would you promote membership to people who are already members? To get clicks from pass-along readership, of course!

Step #4. Send segmented offers

Last but not least, as Peterson's database grew, he began to segment messaging as much as possible. For example, one recent campaign promoting discounts for Boy and Girl Scouts had three different creatives:

- Everyone in the ZIP Codes where Great Outdoor Provision Co has the most competitors received an extra 10% discount coupon offer.

- Everyone in the ZIP Code near Great Outdoor Provision Co.'s newest branch got an announcement about special activities to do with the brand opening.

- Everyone else got a 'general' version.

In addition, Peterson started experimenting with special offers to segments such as fly fishermen only.


Currently, Great Outdoor Provision Co. has more than 11,000 MULEteam members (remember the program only launched nine months ago, and they don't sell online).  Plus, Peterson has reduced the number of names on the old list to just about 2,500.

That first message to the old list generated almost a 40% hard bounce rate and a 5% new list re-registration rate. Many more since then have done so.

The MULEteam members respond considerably higher than average eretail email house lists do. Average open rates range from 30-35% and click rates are in the low double digits. 

As you might expect, MULEteam members redeem coupons at a far higher rate than general consumers (such as those who get coupons in newspapers.) But what makes Peterson happiest is the fact that the average sale per MULEteam coupon redemption is three times higher. Example, he ran a 20% off coupon in a local print newspaper and to MULEteam members via email this spring. Newspaper coupon redeemers spent $20 per average sale. MULEteam members spent $60.

Despite enticing offers, the membership sign-up link in MULEteam emails is almost invariably the most clicked link in each campaign Peterson sends. On average, 6% of recipients forward their email to a friend and 30% of total campaign clicks are on that "become a member" hotlink.

Super-segmentation is also paying off well. The fly fishing campaign netted a super 17% click rate.

Useful links related to this article:

Creative samples from Great Outdoor Provision Co.:

Bronto Software, the email service provider Great Outdoor Provision Co. uses to run the database and email campaigns:

Great Outdoor Provision Co.

See Also:

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