Talbots: The Journey to Re-launch Classic Awards
Situation
Talbots launched Classic Awards, one of the first retail credit card loyalty programs in the U.S., in 2001 after extensive testing. The goals were to increase the Talbots Charge card base, as well as drive usage and sales. The structure was simple: Charge customers earned 1 point per dollar spent and received a $25 reward when they earned 500 points.
Although the classic women’s apparel retailer considered the program an ongoing success with an average 6 percent increase in sales annually and 91 percent redemption of rewards, Talbots asked CCG to review theClassic Awards program beginning in 2006. Not only was the retailer faced with increasingly competitive rewards programs from both bank and other retail private-label cards, but the portfolio size had also remained flat and penetration was beginning to show signs of decline.
CCG was also asked to determine if the refreshed Classic Awards should be launched in Talbots’ Canadian market, which had never participated in the Charge loyalty program.
Solution
After extensive research, CCG recommended that Talbots leverage the high awareness and participation in the existing Classic Awards program, but expand it to track, reward and ultimately drive the behavior of non-Charge customers. Our transactional analysis combined with primary research showed that there was a significant opportunity to better serve these core customers. But part of the challenge in expanding the program was ensuring that we continued to encourage use of the Talbots Charge, which is more profitable for the retailer.
CCG recommended that the refreshed Classic Awards be structured as an umbrella loyalty program comprised of three tiers based on member’s payment method and total spend. Members who pay with non-Talbots Charge methods participate in Classic Awards Red and earn .5 points