May 14, 2008
How To

Coca-Cola's Top 5 Strategies to Build a Successful Rewards Program

SUMMARY: Loyalty programs are only effective if your customers actually use them. Your brand gets stronger the more often they interact with you.

See how Coca-Cola boosted interaction with its My Coke Rewards program by switching to highly personalized and segmented emails. Their average clickthrough rate increased 46%, and member activity is up 57%.
Online customer loyalty programs can be more than a branding tactic. Take Coca-Cola’s My Coke Rewards: A high correlation exists between member activity and purchase volume, says Tara Scarlett, Senior Manager, Consumer Relationship Marketing and Precision Marketing.

Members who log in to the My Coke Rewards website and enter specific codes get points toward products ranging from a cell phone ring tone to a flat-screen TV. Highly personalized emails alert customers to offers. “Really, it’s an online loyalty program that’s wrapped around 12 different products that the Coca-Cola Company distributes in the US,” Scarlett says.

The program has changed a great deal since its debut two years ago. Initially, Scarlett and her team did not send any emails to their members. Then, four months later, they began sending the same email to their entire member list and “we started seeing a little bit of an uptick [in activity].”

Scarlett didn’t want to stop there. She and her team redesigned the email program and website to adjust for specific member preferences. Since the redesign, the average clickthrough rate has increased 46% and members who subscribe to the personalized emails are 57% more active in the program than members not receiving communications.

Here’s how Scarlett and her team segmented the emails and drove website personalization.

Email Strategy
Monthly emails from the My Coke Rewards program are not intended to sell products directly. They’re meant to get members to click to the program website, log in, enter a product code and redeem a reward.

Content includes personalized greeting; member’s point total; header graphic; a few paragraphs of text highlighting a series of calendar events, like a fall football sweepstakes; six image links to reward products; images of Coke products redeemable for points; and a CAN-SPAM footer

Most of the content is personalized toward each member. For instance, those who express an interest in the outdoors might get a hiking header with codes for sandals or a telescope.

“[Members were] coming into the program and interacting with us, but we still sent them a blanket email that’s kind of boring,” Scarlett says. “There’s not really much point in doing that. As long as you’re communicating out, if you have the ability to make it relevant to that person receiving it, they’re more likely to click on it and interact with it and interact with your program because it is something they see value with.”

Here are the 5 strategies they followed:

-> Strategy #1. Optimize the message

Scarlett and her team started personalizing emails slowly. “You start with some basic, basic targeting and then say, ‘OK, I can tweak this element a little bit more. I’ve got this data. I can look at this element. I can look at this behavior and I can grow the program from there.’ You don’t start with a giant program. You can start small and move up slowly, which is exactly what we did.”

Emails are now based on:
o Basic demographic information (age, location, marital status, number of children, etc.)
o Number of points registered
o Reward products received
o Product codes entered
o Sweepstakes entered
o Website clicking activity (like reward category most visited)
o Interaction frequency
o Length of time in the program
o Other areas

One important distinction is the generational difference between customers.

“You know, the Gen Ys, the Millennials, the Baby Boomers, etc., and we also looked at women who have children because moms are a big target for Coke, as well as dads, of course,” she says. “We basically took a lot of those different elements, and every time we send out a communication now we’re using all of those different pieces and parts, not to mention that we also have a Spanish version that goes out as well.”

From there, they gave a similar targeting perspective to the website. This way, “when someone logs on, a variety of different elements adjust based on what we know about that account.”

-> Strategy #2. Optimize zealously

Scarlett and her team average 100-200 different emails for every blast. At times, the number can exceed 7,000.

“It’s all dynamically driven, so it’s not a completely different email,” she says. “You might have the same top of an email and the content inside might be a little bit different. The way [our] system is set up makes it very easy to send. We’re still optimizing. I don’t think we’ll ever stop optimizing.”

-> Strategy #3. Run email tests often

Scarlett and her team have also conducted a range of standard email tests to boost member interaction. “Not only time of day but day of week, subject line, types of messages we have above the fold. We’ve done a slew of testing in all of that, and we consistently use that information to try to refine and try to optimize [our email].”

-> Strategy #4. Offer special content

At times, members receive special content depending on their customer profiles. For instance, members may receive a coupon for Coke products for a regional distributor in their area – although emails are not set up to sell Coke products directly. Valuable members sometimes receive bonus points to keep them in the program.

-> Strategy #5. Measure activity rate

Scarlett and her team don’t try to independently analyze all customer actions –- such as entering product codes, redeeming them for points, browsing rewards, etc.. Instead, to gauge the program’s success, they have rolled these actions into one metric: activity rate.

“For us, within these sorts of communications and within the site, activity rate is a pretty important metric,” she says. “And we’ve seen it, since we started identifying what that rate was and the metrics that went into that was we’ve seen a good increase in our numbers not only logged onto the site but responding to our communications as well.”

Through their analysis, they’ve discovered that members scroll looking for specific topics that has resulted in increased program participation, including a 200% increase in site logins and 100% increase in PIN entries.

Useful links related to this article

Creative samples from My Coke Rewards’ program:

Past Sherpa articles -
How to Score Customer Loyalty: 7 Steps to Double Satisfaction Rating:

How to Rev Value for Loyalty Program - 4 Strategies from NASCAR:

Before & After Story - Email Redesign Increases Loyalty Plan Activation:

Yesmail - Coke's email service provider:

My Coke Rewards:

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