February 03, 2010
Case Study

Direct Mail and SMS Combo Lifts Rewards Program Membership 5%: 5 Steps

SUMMARY: If you want to build a strong membership base for your customer loyalty or rewards program, you have to make it as easy as possible for customers to sign up.

See how a pizza restaurant chain used SMS, a contest and direct mail to get customers to register for their loyalty program. Total membership increased 5%, and the team saved enough money to roll into later campaigns.

Chris Bright, President, zpizza, and his marketing team have one major business goal: They want at least 1,000 heavy-use customers for each of their restaurant locations.

The team defines a heavy-use customer as someone who spends at least $50 per month at a restaurant and visits at least twice a month. The trouble is, it can be difficult to identify these customers.

So the team created its zTribe loyalty program to help identify regular customers and to reward them for their patronage. In order to continually attract new members (and identify more heavy-users), the team wanted to make signing up for zTribe as convenient as possible. They saw an opportunity in SMS messaging.

"SMS text right now seems to be the easiest way to get someone on board with a loyalty program," Bright says.


Bright and his team combined a cash prize, direct mail and SMS messaging to encourage customers to register for zTribe, and to introduce new products to the public.

Here are the five steps they followed:

Step #1. Build registration architecture

The team asks all customers signing up for zTribe to complete a survey. Rather than reinvent the wheel, they used the same survey for this effort.

The Web-based survey takes about five to six minutes to complete, Bright says, and asks visitors questions about their zpizza ordering habits and their contact information. The last frame of the survey asks visitors to opt into the team’s promotional email list.

Step #2. Design contest and direct mail piece

The team set up a $5,000 cash giveaway contest tied to a direct mail postcard.

Contestants entered by scratching a portion of the card and texting the revealed keyword and their email address to a provided mobile short code number. The team then emailed contestants to tell them if they had won, and to encourage them to register for zTribe.

Here are the key parts to the contest:

- Prize

The $5,000 grand prize was tied to a specific keyword on one of the postcards. If a person received the piece but did not enter the contest, the grand prize would not be awarded. The team also awarded lesser prizes such as small food items.

- Short code

The team needed a short, simple number for recipients to text in their keywords and email addresses.

Common Short Codes are leased from the Common Short Code Administration on a three-, six-, or 12-month basis. The fee is a non-refundable $1,000 per month for "select" codes and $500 per month for random codes. (For more information about the CSCA see links below).

- Postcard and keywords

The direct mail piece served several functions. First, the graphic-heavy front introduced three new products to recipients. The reverse side:
o Mentioned that restaurants were accepting donations for a nonprofit organization
o Provided two coupons
o Explained how to enter the $5,000 giveaway contest

The postcard featured a "scratch-off" section. When scratched, it revealed a keyword that the user would text to the short code to enter the contest. The team mostly used brand-related words such as "fresh," Bright says.

-> TIP: Although not employed for this campaign, you can segment your SMS keywords to track response by region.

Also, it is essential that the short code on the postcard is the exact code registered with the CSCA. Otherwise the number will not work for consumers, and could waste the entire cost of a direct mailing. Bright has seen this happen.

- Email

After contestants messaged their keyword and email address, the team sent a reply email telling them what they’d won, and encouraging them to sign up for the zTribe loyalty program.

Step #3. Disseminate postcards

The team mailed the cards in October 2009 to residents within two miles of each zpizza restaurant -- approximately 3,000 people per location. They also sent the cards to each restaurant to be handed out to customers as they ordered in the store.

Step #4. Promote

As with most of their marketing campaigns, the team mentioned this effort in two additional places:

- Homepage

They created a simple display image that told visitors they could visit their local zpizza location to receive a game piece. This was a static image that did not link to another page.

- Facebook

The team also mentioned the contest on their Facebook profile page, and included a product image.

Step #5. Monitor SMS entries

For the most part, the campaign went smoothly. However, an issue did surface related to the keyword they had selected for certain game pieces.

The team used a product name for one keyword, "zBread." After scratching, some customers thought they had won a free zBread and tried to redeem the card in stores without first texting to see what they’d won, per contest rules.

"That was a lesson learned," Bright says. "Don’t use product names in the scratch-off because they can create a lot of confusion."

"We were pleased with the results and with the lift in zTribe memberships," Bright says.

Compared to their normal zTribe registration rate, the rate during the six-week campaign grew by 17%. Total registrations increased 5%.

The team realized a 1.06% conversion rate from the mailing.

- No grand prize awarded

The overall cost of the campaign was kept down since no one redeemed the grand-prize winning postcard.

"We’ll be rolling that $5,000 into another campaign this year."

Useful links related to this article

Creative Samples from zpizza’s rewards program growth campaign

How to Build an SMS Alert Campaign: 6 Steps and Lessons Learned
Common Short Code Administration

Inmoment: Supplied SMS survey tool and surveying methodology


Improve Your Marketing

Join our thousands of weekly case study readers.

Enter your email below to receive MarketingSherpa news, updates, and promotions:

Note: Already a subscriber? Want to add a subscription?
Click Here to Manage Subscriptions