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September 2012

Loyalty Innovation in Retail, North America

The Initiative

In 2006, the book industry was continuing to change. A digital revolution was both inevitable and coming faster than almost anyone expected, and as Canada’s largest bookseller, Indigo had to respond. The strategy was two-part: Diversify product offering beyond books, and increase investment (time, resources and technology) in customer relationships.

Indigo launched plum rewards, a points-based program that allows members to collect points in-store and enjoy the best prices on books online. To build and sustain member engagement, plum rewards required compelling, relevant and unique benefits. The first principle of the program is to send meaningful messages at times that resonate, driven by members’ tenure and activity in the program.

The next principle is to inspire members to discover new titles and products with the MyRecommendations feature. MyRecommendations refers titles by using increasingly granular data from a customer’s past purchases combined with stated preferences and what other similar customers are buying. Plum rewards members can retrieve their personalized recommendations on demand by logging into their account through a portal available online and at in-store kiosks.

The third principle is to always look for ways to give members more. Recent examples include exclusive “Meet & Greets” with Shania Twain and seasonal product previews. Indigo has seen responses to contests increase by 50%, demonstrating members’ enthusiasm.

The final aspect of the program is to dial up the fun with new media platforms and entertaining ways to earn points. Indigo incorporated gaming into its social platform, generating more than 18,000 new Facebook fans and giving members the chance to earn points while having fun.

The Results

Indigo exceeded acquisition goals by 100%, with 4 million members within a year. “Welcome” emails are among the highest revenue-driving triggers, and a “happy birthday to you” email has open rates of up to 90%. The customized product recommendations exceed Indigo’s mass email communication open rates by 33%. Overall, plum members spend more, and demonstrate higher engagement levels.

Voice of the Voters:

  • “A very nicely designed strategy – experiential rewards and special events integral to the brand and the ‘dreams’ of members.”
  • “In an ear of electronic media and reading devices, the choices for sourcing reading material have grown – indigo found ways to engage customers and keep them loyalty to their brand.”
  • “Excellent use of experiential rewards and true once-in-a-lifetime opportunities. Indigo has truly implemented a best practice in customer engagement.”

COLLOQUY Interview with Indigo Books and Music