Case Study:
Loyalty Program Targeted Bonus Offer Reverses Negative Sales Trend
CLIENT
New Jersey's largest independent auto parts dealer
THE CHALLENGE
Our client wanted to stop a decline in sales in one of their product categories. Prior to the promotion, sales were running below the historical records.
KEY RESULTS
Declining sales were reversed with a 17.2% sales mix increase.
BACKGROUND
Our client, Buy Wise Parts, is New Jersey’s largest independent distributor of auto parts. Their rewards program, Buy Wise Parts Perks, is a valued-added component of their aftermarket service center support program.
Members of the Buy Wise Parts Perks program earn points on all qualifying purchases made with Buy Wise Auto Parts.
The program features multiple reward tiers based on monthly purchase levels, so the more a member purchases each month, the faster the points accumulate.
In addition, a growth bonus is offered, providing a point multiplier on monthly sales growth exceeding targets vs. the previous year.
STRATEGY & IMPLEMENTATION
To increase sales in the Radiator, Water Pump and Timing Kit category, Lift & Shift created a 2X multiplier offer on these purchases. This meant that, depending on the monthly rewards tier attained, products from this category could be worth up to 6X the base level of miles/points.
In the 90 days prior to the promotion, feature item sales were running below the historical levels of the previous year at 3.2% of the overall sales mix for program members.
RESULTS
During the promotional period, the declining trend was reversed, with reward-earning merchant purchases showing a sales mix increase of 17.2%.
Comparing the pre and post-promotion member purchase patterns, Lift & Shift was able to demonstrate incremental sales leading to a very healthy
ROI of $10.58 in additional sales for every $1 awarded in bonus points for all feature item purchases.
Results from this program show:
- Negative sales trends can be reversed through effective use of bonus offers
- Bonus offer tiers, based on member purchase volumes, provide not only an everyday incentive to increase purchases, but can also add to promotional impact.
- A properly structured bonus offer pays for itself through a positive ROI