How to Rev Value for Loyalty Program - 4 Strategies From NASCAR

CHALLENGE
Traditionally loyalty programs struggle to overcome two preconceptions among consumers -- #1. rewards will be common and unexciting and #2. any interesting rewards that do exist will be out of reach.

To overcome those concerns, NASCAR launched its RacePoints rewards program in September 2005 with eight partners and a plethora of special offers. It worked -- in fewer than 60 days, they had built a list of 900,000 members. Before this point, the stockcar racing league had never even kept a customer database.

But NASCAR RacePoints President Thorp Foster knew his team couldn’t afford to rest on their laurels; they had to add value for their customers (to avoid indifference) and for the company (think cash flow). “It has been critical for us to develop many different ways for fans to earn points, and not just one or two ways.”

Foster’s “want” list was long:
- To use affinity tactics, such as a RacePoints credit card, to encourage a deeper sense of community among the program’s participants.
- To reach out offline to extend awareness.
- To open a significant extra revenue source by providing leads from the program to other retailers.
- To show sponsors the value they can attain from RacePoints.


CAMPAIGN
Foster and his team followed four critical strategies to grow the RacePoints program:

-> Strategy #1. Create the RacePoints online mall

Foster collaborated with a partner specializing in building affiliate shopping portals last winter to make the RacePoints online mall (see link to vendor below). The online mall let members earn points with their account on the retailer’s proprietary site by purchasing from more than 300 brand-name retailers ranging from Adidas to Zales.

To keep the exclusivity, points were earned only through the mall. In other words, a RacePoints member couldn’t earn points with their account on the retailer's proprietary site. Registered members earned anywhere from one to four points per dollar spent and could redeem them via the RacePoints Web site or by calling a toll-free number.

Because of the partner’s pre-existing relationships with the retailers, Foster left the back-end setup for the mall to the partner. Meanwhile, he and his staff managed the creative elements of the Web design in order to suit the NASCAR brand better.

When the mall was finished, two dozen product categories (ranging from Apparel to Travel) were set up on the left-hand margin of the RacePoints mall. In addition, six highlighted retailers appeared in the center of the page and a handful of other featured advertisers were set off to the left.

Then, the leads generated at the site were funneled into the partner’s system, kicking back a commission to NASCAR for every sales conversion they drove.

-> Strategy #2. Spread the word with credit cards and signup tents

Before last season’s racing season began, NASCAR agreed with Bank of America to expand an existing cobranded credit card deal to include the RacePoints program, which let members purchase and gain points. Previously, members could use only Web site accounts to build points.

To spread the word of the added value, the companies ran 10 to 12 events tents/stands at the Nextel Cup’s 36 races, which were attended by 100,000 fans each.

Because of Bank of America’s long history of handling events marketing setup, they ran the brunt of the logistics behind the campaign. Sign-up workers informed race patrons about the benefits of the credit card and the RacePoints program.

-> Strategy #3. Blanket country with fliers on 20 million pizza boxes

To reach their broad fan demographic, NASCAR penned an agreement with 19 Fortune 1000 sponsors. One of the most prominent deals was with Domino’s.

To promote RacePoints, 20 million pizza boxes included a flier announcing the opportunity to receive 100 RacePoints for orders over $20. Customers had to mail a proof-of-purchase receipt form to get the points. “The box top is more of a combination of an awareness and direct response marketing mechanism,” Foster says.

The promotion was advertised at the RacePoints mall site and in Domino’s TV commercials. At least two other sponsors, Enterprise Rent-A-Car and DirecTV, also incorporated RacePoints into their TV ads. “We run the RacePoints platform and create the currency, and our official sponsors decide exactly how they want to use the currency as promotional incentive,” Foster says.

-> Strategy #4. Offer targeted experiences and items

Within the RacePoints rewards program itself, Foster knew he needed to keep the program unique so fans would stay interested. That’s one reason why the items in the RacePoints catalog are not the usual affinity program fare (jackets, hats, key chains with a logo), although some of those do exist.

Mainly, the catalog items were geared to fuel fans’ passion for the brand: one-of-a-kind experiences, autographed memorabilia, etc.

For example:
--Mark Martin fans can get a die-cast car (5,700 points)
--Dale Earnhardt Jr. fans can purchase a "firesuit jacket" (12,400 points)
-- For the ultimate fan experience, you can get behind the wheel and race against some of the best NASCAR drivers at NASCAR SpeedPark (150,000 points)


RESULTS
It took Foster and his partner’s teams only five weeks to get the RacePoints mall running. Foster is exceedingly happy with the commissions generated and the upward trajectory of their members’ base.

“RacePoints became a far-more robust and experiential loyalty program,” Foster says. “While we are not making the increases in RacePoints membership a public number, the growth has been significant.”

The upgraded Bank of America relationship gave NASCAR credit card users a significantly higher number of options. They went from being offered around 20 gift certificate capabilities to more than 500 race-related rewards.

The Domino’s relationship was so successful that it will continue this year because of the payoff NASCAR saw with the box-top program. Foster says sponsors are seeing a growing response over their controlled groups in test campaigns.

“RacePoints is helping these sponsors improve their return on investment in NASCAR,” he says. “We’ve been able to convince sponsors of the value and efficacy of the program. We’ve been getting on their marketing calendars.”


Useful links related to this article

Creative samples from the RacePoints campaign:
http://www.marketingsherpa.com/cs/nascar/study.html

Mall Networks - the vendor NASCAR worked with to create the online mall:
http://www.mallnetworks.com

Stoneacre Partners LLC - developer of the RacePoints initiative:
http://www.stoneacrepartners.com

RacePoints:
https://racepoints.nascar.com/home.aspx

NASCAR:
http://www.nascar.com