Inside This Issue - News
Walgreens has high expectations for new loyalty plan
September 24th, 2012
DEERFIELD, Ill. – Walgreen Co. has launched Balance Rewards, a customer loyalty program that the company says could become the largest in the United States. All Walgreens and Duane Reade stores are participating in the program.
According to Adam Holyk, divisional vice president of loyalty and insights for Walgreens, the program is distinguished by three major facets: It leverages technological innovation to make it as customer-friendly as possible; it features a strong wellness positioning; and it is structured around rewards, not discounts.
The prelaunch online enrollment period extended from September 6 to September 15, during which time customers who joined had a chance to enter Walgreens’ 10 Million Point Giveaway. Customers who referred friends and family members who joined the program earned additional entries into the sweepstakes. Ten grand prize winners who received 1 million points each were randomly selected from the entry pool.
According to Walgreens, more than 1 million customers had signed up for the program during the online-only enrollment period between September 6 and September 15.
“Our loyalty program is distinctive,” said Graham Atkinson, senior vice president and chief experience officer. “Balance Rewards offers easy enrollment, instant points and endless rewards as well as ways to get, stay and live well at Walgreens. This comprehensive rewards program is one of Walgreens’ largest and most important programs in company history. As part of our strategic vision to become America’s first choice for health and daily living, Balance Rewards is the latest innovation in Walgreens’ long heritage.”
While Walgreens is the last of the three largest drug chains in the United States to launch a loyalty program, executives are confident that Balance Rewards has the potential to become the largest loyalty program in the country.
While he did not state a membership target number, Holyk pointed out during an interview that Walgreens has well over 100 million customers entering its 7,900-plus stores annually and suggested that other highly successful rewards programs, such as Shoppers Drug Mart’s Shoppers Optimum Rewards program, which boasts a third of Canada’s population as members, provide a meaningful reference point for Walgreens’ ultimate goals. Before joining Walgreens, in fact, Holyk led analytics and loyalty groups at both Shoppers Drug Mart and Loblaw Cos. in Canada.
A vital goal in designing Balance Rewards was to use technology to make joining and using the program as easy and convenient as possible for customers.
“The guiding principle was to design the program around the customer,” Holyk said. “This resonates well with our history of innovation and the transformation of our store network with our Well Experience prototype.
“The Well Experience concept really started with the customer: How could we develop and design the right store environment for the customer? We took a very similar approach with loyalty.”
One important result was the multichannel access the program affords and the ease of enrollment. Customers can join online at walgreens.com/balance or, with Walgreens’ mobile app, they can join with a one-click download from a mobile device. They can also enroll by scanning the program QR code found on signs in stores.
“Alternatively, customers can walk into a Walgreens store, input their information with the pinpad at the checkout; the database does the look-up and records the enrollment: The customer is done,” Holyk explains.
Once they have joined Balance Rewards, members can also instantly earn and redeem points through multiple channels. They can use their phone number, the 2-D barcode on their mobile phone, or their physical membership card to access the program, while members of AARP can also use their AARP cards.
During the online enrollment period the Balance Rewards mobile card was issued as part of Walgreens’ mobile app, which is available for free and offers several major benefits specific to the program. For instance, members can scan their mobile devices at the checkout to earn points and redeem rewards without using the membership card. In addition, they can review their purchasing and points activity as well as special member savings with their mobile device.
Another distinctive feature of the program, according to Holyk, is the fact that members earn points for activities that help them stay well, such as participating in Walk With Walgreens, receiving immunizations and, where state laws allow, obtaining prescriptions. In addition, Holyk says, the company is looking at different promotions at the front end to encourage selection of healthful products and behaviors.
Potentially most valuable, perhaps, for pharmacy patients is the fact that membership gives them exclusive access to Walgreens online pharmacy chat service, 24 hours a day, seven days a week and 365 days a year. The chat provides access to a licensed Walgreens pharmacist.
Holyk emphasized as well the importance of the program’s focus on rewards rather than discounts. “I think this is a differentiator,” he said. “Our intent was not to launch a discount program. We explicitly made the choice to enable people to collect points. The whole idea of rewards is really important as we try to make an emotional connection; we think that’s more powerful than discounts.”
Tied to that goal is the program’s generous approach to expiration: Members are only required to earn or redeem points via a purchase once within six months. Moreover, points are worth more as a member accumulates more: Whereas 5,000 points earn a reward of $5, 30,000 points are worth $35. Points cannot be redeemed for cash, but they can be applied to most front-end products, with certain exceptions.
The marketing campaign supporting the launch of Balance Rewards kicked off September 6 on digital channels including YouTube, Twitter and Facebook, while the national launch on September 16 was accompanied by Walgreens’ largest and most highly integrated marketing campaign, including television and in-store marketing that utilizes what Holyk described as unique, new marketing collateral in store.
While the timing of the launch of Balance Rewards and the reentry of Walgreens into the Express Scripts Inc. network this month are coincidental, executives are hopeful that the program will help lure back customers who abandoned the chain during the impasse.