Kellogg Builds Loyalty Through Family Rewards
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Kellogg is gleaning lots of valuable consumer data and encouraging sales of multiple brands with a one-year-old portfolio-wide loyalty program called Kellogg’s Family Rewards. Family Rewards points are rewarded to purchasers of more than 90 percent of products falling under one of Kellogg’s brands, and then shoppers can use them to collect discounts and prizes.
"We get a significant positive sales lift out of Family Rewards," said Dan Keller, VP of customer-relationship management and loyalty for Kellogg, citing Nielsen data comparing program participants versus non-participants with similar attributes.
Even more important, "Many shoppers have moved from single to multiple categories and brands under Kellogg based on rewards points."
Kellogg’s 16-digit loyalty codes, unique to each package, signal product type, size and flavor of something an individual shopper has bought, in addition to where consumers purchased the items and the location of the store.
Those loyalty codes are tied to its "K Numbers," the company’s internal product codes, providing the company an understanding for the first time of exactly what people are purchasing.
"That gives us actual behavioral or transactional data," Mr. Keller said. "With the five million households registered for Family Rewards, we can do a much better job of targeting, to motivate the desired incremental behavior and provide differential outbound content to those people based on who they are and what we know about them."
For example, using Family Rewards data, Kellogg can identify households that are purchasing Special K cereal, but not other Special K products, and then extend offers for Special K breakfast snacks and bars.
Family Rewards insights can also help Kellogg sell other products to customers who already favor another. A consumer may register under the program that there are kids in the household and already purchase Rice Krispies and Eggo Waffles, but are choosing Nabisco cookies instead of Kellogg’s Keebler brand.
Kellogg sends out more than 10 million e-mails each week after identifying those most likely to be interested in new products and extending special offers such as double points under Family Rewards. Program members who might be most likely to express interest in line extensions may be given incentives to do so. E-mailing editorial content about healthy and nutritious eating can help gauge members’ interest in Kellogg’s cutting-edge better-for-you offerings.
At the chain level, Kellogg has used the program through Walmart to provide participants with a free rental from Redbox; through Target to get a $5 gift card for Kellogg online; and through purchases of Pop-Tarts at Family Dollar stores to qualify for Family Rewards bonus points.
What do you think of Kellogg’s Family Rewards program and vendors rewards programs in general? How valuable are they to the brand? What benefits fall to retailers?