Case Study:
Loyalty Program Targeted Bonus Offer Reverses Negative Sales Trend
CLIENT
New Jersey's largest independent auto parts dealer
THE CHALLENGE
Our client wanted to stop a decline in sales in one of their product categories. Prior to the promotion, sales were running below the historical records.
KEY RESULTS
Declining sales were reversed with a 17.2% sales mix increase.
Background
Our client, Buy Wise Parts, is New Jersey’s largest independent distributor of auto parts. Their rewards program is a value-added component of their aftermarket service center support program.
Participants in the program earn points on all qualifying purchases.
The program features multiple reward tiers based on monthly purchase levels, so the more a participant purchases each month, the faster the points accumulate.
Additionally, a growth bonus is offered, providing a point multiplier on monthly sales growth that exceeds targets compared to the previous year.
Solution
To increase sales in a product category, Lift & Shift created a 2X multiplier offer on these purchases. This meant that, depending on the monthly reward tier attained, products from this category could be worth up to 6X the base level of points.
In the 90 days preceding the promotion, feature item sales were running below the historical levels of the previous year, accounting for 3.2% of the overall sales mix for program members.
Results
Sales Gains
During the promotional period, the declining trend was reversed, with reward-earning participant purchases showing a
sales mix increase of
17.2%.
Strong ROI Impact
Comparing the pre- and post-promotion participant purchase patterns, every $1 awarded in bonus points for all feature item purchases was tied to
$10.58 in additional sales
Results from this program show:
- Negative sales trends can be reversed through the effective use of bonus offers.
- Bonus offer tiers, based on participant purchase volumes, provide not only an everyday incentive to increase purchases but can also add to promotional impact.
- A properly structured bonus offer pays for itself through a positive ROI.