April 20, 2017
5 minute read
Online greetings card supplier Moonpig launched in 2000 and just seven years later dominated the industry with sales equating to 90% of the online greetings card market. With a turnover of £61 million in 2016 the company has continued to thrive. Now, in an online first they have launched an innovative customer loyalty scheme to encourage repeat custom and reward consumers. We’ve taken a look at what they’re doing:
Moonpig Rewards was launched on 31 October 2016 and is thought to be the first digital stamp card scheme for an online store. Essentially the scheme works in the same way as popular coffee shop cards do, where each basket transaction, with no minimum spend required, made through Moonpig earns the customer a stamp. Once they have six stamps they’ll be sent a voucher code and will be given three months to exchange for a free standard sized personalised greetings card, leading to a potential 11.8% rate of redemption. Once redeemed the stamps reset and customers can continue to another six and so on.
Customers signing up for Moonpig Rewards are automatically signed up for a Moonpig account, essential to be able to make a purchase. Members are then signed up for the newsletter which is delivered daily and showcases new cards and gift ranges, new product launches and reminders and ideas for upcoming events such as Easter and Christmas.
While only in its infancy at the moment, Moonpig say they intend to develop Moonpig Rewards swiftly – evolving with customer experience and engagement at the forefront. One of the things they are believed to be looking at is allowing customers to receive additional stamps for engaging with social channels, adding reminders or downloading the app.
Having been in operation for over 15 years Moonpig have encouraged customer loyalty in a variety of ways prior to the launch of Moonpig Rewards. For example, one of the most popular features on their website is the customer’s personalised calendar which sends email alerts about special occasions, such as reminding people to buy a card for Mum or Dad’s birthday. Unique to the customer who will have inputted their own special dates, the reminders include a link direct to site with recommended cards and gifts for purchase according to who the recipient is going to be. The Moonpig app also facilitates integration with Facebook contacts or personal online address books so that contact details can easily be linked in with alerts.
Furthermore, Moonpig also offer a prepay credit option where customers can deposit money into their account for use in the future. By doing so customers are rewarded with a gift of 25% free credit – for example if you put £20 of prepay credit in then you have £5 added on.
A range of additional extras are offered to the most loyal customers who are dubbed ‘Moonpig Addicts’. Customers who shop most often with the brand can apply online to become an ‘addict’ and Moonpig then pick who is selected in order to maintain exclusivity.
In October 2016, just before the Moonpig Reward launch, Moonpig Addicts were invited in for an after-hours party at Moonpig HQ to find out all about the scheme. This annual party is exclusive to Moonpig Addicts, while the use of the hashtag #moonpigaddicts gains Moonpig extended reach and promotes this treat across social media. Guests at the party are rewarded for their loyalty with food, drinks and entertainment including beer tasting, chocolate tasting and a flower arranging course – all from the people who supply goods to Moonpig. The rest of the year Moonpig Addicts are rewarded by receiving the latest news before anyone else, having their say on new ideas and products and rewarded with freebies and exclusive offers.
This exclusivity and preferential treatment uses Pareto’s 80:20 rule, believing that 80% of their profits comes from just 20% of their customers. By giving this core set of high spending customers a VIP experience they increase brand loyalty and future spend potential.
Things have been difficult for the greetings card industry in recent years. Synonymous brands such as Hallmark slashed workforce numbers in half between 2010 and 2015 due to falling sales. This has led to a number of innovations to ensure customer loyalty now and in the future. While Moonpig are currently leading the way with their reward scheme, other online greetings card suppliers are yet to follow suit. Paperchase is a notable high street competitor who have been running a successful loyalty scheme since 2015.
The Treat Me card boasts that it is not about points but about perks. Customers pick up a card in store but then need to register their personal details on the Paperchase website in order to fully activate the card. Immediate rewards include a £5 gift on your birthday, a one-off 15% discount for the next purchase made, free click and collect and free upgrade to next day delivery for qualifying minimum spends. Further rewards are given throughout the year, rewards which are designed to be personalised to the customer, based upon their purchase history which has been logged through usage of the card.
While these immediate, one-off offers may provide the incentive to sign up, the uncertainty as to what else a Treat Me customer will receive means that Paperchase do little to retain their customer loyalty, which is something which we think Moonpig Rewards is doing more successfully.
Moonpig Rewards are a great example of how businesses are looking to do something a bit different in order to encourage and maintain customer loyalty. However, it hasn’t saved them from recent negative publicity. Social media lit up on Mother’s Day with numerous complaints from customers about late delivery and poor quality of flowers. Customer satisfaction is essential for customer loyalty, especially as social media can spread negative perceptions and damage a brands reputation. In response, a public apology has been issued and Moonpig has taken to social media to assist the affected customers and offer compensation.
Going forward here are a few ways that we think Moonpig could improve their customer loyalty schemes:
The Moonpig Addicts scheme is not very well advertised, and could even be considered hidden on their website. While this perhaps mirrors the exclusivity of the scheme, the perks are unclear. Furthermore, the qualifying criteria are not obvious and as such it does not give much incentive for people to attempt to become a “Moonpig Addict”.
At present customers have to sign up for a Moonpig account and then have to sign up for the rewards scheme. This double opt-in acts as a barrier and doesn’t do much to drive acquisition. Our recommendation would be for Moonpig to look into integrating Addicts and Rewards into the site more clearly, and to improve upon customer journey.
We’ve looked at some of the other ways that companies are re-imagining loyalty in our blog post on the Future of Customer Loyalty. From this we can see that through their loyalty schemes, Moonpig are utilising a number of the key future trends around personalisation, and aspirational and experiential rewards. However there are still a number of trends which could be addressed, for example getting Addicts more involved in co-creation.
If you want to be innovative and come up with some great ways of maintaining customer loyalty then get in touch with us today to find out how we can help you.
Photograph: copyrighted to Moonpig.com