June 11, 2008
Case Study

How to Grow an Email List From Nothing to 2 Million Loyal Fans in 2 Years (Hint: Give Them Something They Enjoy)

SUMMARY: Birthday clubs are a proven traffic driver for many brick-and-mortar stores, but does the tactic work as well online? Well, that depends on your incentive.

See how one retailer launched and grew a loyalty club into 2 million happy subscribers who keep coming back for more. Includes clickthrough and coupon download rates that are simply delicious.
Most companies have a bare-bones email marketing staff. In fact, 71% of B-to-C email staffs have three employees or fewer, according to MarketingSherpa’s 2008 Email Marketing Benchmark Guide. That’s why we weren’t surprised to hear that Cori Mozilo, Interactive Marketing Manager, Cold Stone Creamery, had only one counterpart when they set out to launch their email program two years ago.

Even with a skeleton crew of just two -- Mozilo and Heather Dorr, Director Interactive, -- they wanted to see if they could get retail-store foot traffic from their newsletter subscribers. Mozilo knew traditional offline tactics might help her cope with the small staff size, but they weren’t sure which tactics would work best.

“We needed a program that rewarded customers and, at the same time, was a real, live marketing vehicle,” she says. “We wanted it to be email-based, building a connection between online and the stores.”

The company’s product line of ice cream, cakes and other desserts seemed perfect for an incentive program. But she wondered if they could launch this type of program on a daily basis as part of their normal handling of regular email efforts.

Mozilo and her Dorr created an online birthday club, a concept they knew had worked well historically offline. “Since everyone has a birthday, it seemed fairly easy to target. Because there would eventually be birthdays every day as we built our database, we wanted to see if it could create a stream of endless, continuous marketing.”

Here are the six steps they followed:

-> Step #1. Design birthday email

First, they put together a simple but colorful email layout that chiefly used the image of ice cream cone against a purple background.

Other elements:
o Headline in large type: “It’s Time To Celebrate!”
o Six lines of copy in smaller type that explained the offer
o Three hyperlinks in the copy
o Small images of a girl and a woman blowing out birthday candles in the lower-left-hand corner

-> Step #2. Create landing page

Those who clicked the link in the email were taken to a landing page that listed more details about the club and an opportunity to sign up for other promotions. The copy read:

“This is your opportunity to treat yourself or someone you love to the sweet, tempting taste of a Cold Stone Creation. As a Birthday Club member you will also receive special offers and promotions from Cold Stone throughout the year. Click “Register” below to join the Birthday Club now!”

Also on the landing page was a link to the registration page, which required viewers to state they were 13 or older. Those 12 and younger were requested to have a parent or guardian provide an email address. The parent then received a confirmation email detailing how they could create an account and sign up their child for the birthday offer -- keeping within federal child-protection laws.

They also created a FAQ page for visitors with questions.

-> Step #3. Promote club prominently on homepage

From the very first day, Mozilo and Dorr advertised the birthday club front and center above the fold on their homepage. The ad used the same image of an ice cream cone with a birthday candle.

Next to it appeared the hyperlinked copy: “Receive FREE Ice Cream on Your Birthday!” Viewers who clicked on it were taken to the landing page for registration.

-> Step #4. Push birthday club at registration

Other avenues also were placed on the Website for birthday-club captures, such as the “My Cold Stone” accounts promoted in the top navigation bar.

First and foremost, viewers who clicked on that link were asked to provide:
o Email address (used as login)
o Password
o First name
o ZIP Code
o Favorite store location

Mozilo and Dorr wanted their subscribers to have choices. They could sign up for either the birthday email or regular promos or both, or neither -- if they just wanted the account.

Here’s how they worded the offers:
o Checkbox for “Special offers and news from Cold Stone Creamery”
o Checkbox for “A coupon for free ice cream on my birthday”
o Entry box for the birthday info (mm/dd/yyyy) for those who selected the coupon
o Gender clarification check buttons

They also distributed business-card-sized promo pieces to the stores. Customers could take one at the counter to remind them to later visit the site and sign up to receive the emails.

-> Step #5. Notify upcoming members when birthday nears

Every three days, Mozilo used a search function in their database to dig out the upcoming birthdays. They kept the subject line simple and direct: (only 39 characters):

“Happy Birthday from Cold Stone Creamery”

Copy in the email reminded members that the coupon expired one week after their birthday

“We dedicated one customer service staffer, who was not part of the interactive marketing team, to the birthday club. We wanted to make sure that subscribers got their free ice cream.”

-> Step #6. Protect against coupon abuse

Mozilo didn’t want coupon abusers to victimize their franchisees, so they tracked whether the coupons were printed more than once. If it was, the system invalidated the coupon code and made the subscriber call to reactivate it. In this case, the member received an email with the toll-free number to talk to a birthday club specialist.
Go figure. It seems that everyone likes free ice cream on their birthdays. All of the steps taken to make the birthday club emails attractive, functional and abuse-free produced an outstanding response. Almost 2 million birthday club members have signed up -- already 400,000 more than their regular subscriber list. This translates into 45% of recipients downloading and printing the coupons.

“We didn’t expect the list growth to be as explosive as it was,” Mozilo says. “I mean, we are only two years in.”

Here’s how two other rates compare to their other email campaigns:
o Open rates are 62.5% higher
o Clickthroughs are a whopping 350% higher

Mozilo wasn’t at liberty to reveal store redemption rates, but it’s worth noting that she expected some backlash from franchisees about consumers coming into the stores with the freebie coupon and not buying anything else. Instead, the opposite has happened.

“We just did a franchisee survey. We got an overwhelmingly positive response. They feel it’s a positive marketing campaign that drives people into there stores. And the ice cream-parlor experience is one where people don’t come in by themselves. So, while we might be giving away one ice cream, we have been gaining one or two to offset the cost.”

As for any strain the program has put on their staffing, Mozilo says her team dedicates 10 hours a week -- sending emails, list maintenance, scrubbing, etc. A specialist, hired after launching the program, now works full time on the program.

And what about email costs? “We are talking about a tenth of a penny per subscriber to send them. It has become a part of our customer relationship management strategy,” Mozilo says. “We feel that we are a premium product and we wanted to reward people to establish brand loyalty. We feel this [initiative] has done that and then some.”

Useful links related to this article

Creative samples from Cold Stone Creamery:

ExactTarget - Cold Stone Creamery’s email service provider:

Target Scope - created design elements for the emails:

Cold Stone Creamery:

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