You may be wondering how something as simple as SMS marketing can sell groceries. For us and our Client it started with one of the most successful loyalty program launches ever.
Success in marketing, however, can sometimes lead to complacency, with early wins and accolades masking less-visible performance issues of campaigns. As marketers of high-performing loyalty programs driving millions of dollars in revenue––we must be able to look beyond the success and uncover potential problems before they surface. Instead of reacting to a situation we proactively address it and learn from the situation. This ongoing optimization can directly improve bottom line results for a business. And that’s where started.
Hannaford Supermarkets, a 182-store grocer in the northeast, was fresh off the highly successful launch of their first of its kind, digital-only, loyalty program, My Hannaford Rewards. Targeted offers were being communicated at the beginning of each month to their 1.2 million loyalty customers via email on the SalesForce Marketing Cloud (SFMC) Email Studio platform. After launch, and as the program matured, conversions from email subscribers began to plateau. Despite over 55% of all store sales running through their loyalty program, and participation rates in excess of 50%, a slow-down like this could have been easily overlooked. Collaboratively with Hannaford, however, we identified areas of opportunity and turned our attention to optimizing channel performance in order to retain and re-engage those customers that dropped off.
Our hypothesis was that email, combined with another channel, would convert unengaged customers and drive sales better than email alone. We selected the SMS marketing channel to test a series of campaign reminder messages to drive participation, trips, and increase conversion in addition to the emails already being deployed.
Adding SMS Marketing to The Loyalty Customer Journey
With proper permission and clear customer expectations, the SMS marketing channel can perform very well. It has a 98% open rate, compared to 22% in email; and recipients typically respond within 90 seconds, compared to 90 minutes from email.
During the My Hannaford Rewards registration process, customers provided, among other details, a unique phone number from which they could identify themselves at point of sale. Anyone who indicated a preference to receive SMS messages went through a double opt-in process which allowed us to create a substantial SMS marketing segment. We then cross-referenced those customers that had not engaged with the campaign to date with those that had agreed to receive SMS messages leaving us with an untapped opportunity.
We also included a control segment of all other customers that had not yet converted.
Everything was configured within Mobile Studio, SFMC’s mobile marketing platform, inclusive of SMS, MMS and push.
With each loyalty campaign, customers had, on average, 2 weeks to clip and redeem their offers before they expired. A clip equaled a conversion. Our communication cadence up to this point consisted of three emails – one at the beginning, middle and day before the end of the campaign. For the test, we sent the reminder SMS message on the same day as the midpoint email reminder, and then again on the same day as the final email reminder, with the control segment only receiving the emails.
Unengaged Loyalty Customers Responded to SMS Marketing
The first message at the midpoint of the campaign resulted in the SMS marketing segment converting 75% better than those that did not receive the SMS reminder. The second message sent on the day before the end of the campaign resulted in the SMS marketing segment outperforming the control by 14%.
Again, these are customers that had previously taken no action from the emails deployed. By adding an SMS marketing message, we were able to drive the customer to not just simply engage with the program, but to clip offers!
With a conversion rate of 19% for clipped offers redeemed at checkout, we concluded that SMS marketing was indeed able to increase program participation, drive incremental sales, and ultimately, sell more groceries for Hannaford.
With the initial success of the SMS program, we continued SMS testing with subsequent campaigns and consistently saw similar participation bumps. Due to the success of this test cycle, the SMS reminders became a standard and valuable part of the multi-channel marketing campaigns for My Hannaford Rewards.