RedEnvelope Tests Loyalty Program

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RedEnvelope Inc., a multichannel specialty gift retailer, rolled out the first phase of its loyalty program last week designed to drive repeat purchase behavior and reward customers for their business.


The RedBox Rewards program is still in a trial period and not yet broadly available, the San Francisco company said.


However, it is "the first systematic program that we have put into place that recognizes and rewards customers for the business they do," said Gary Korotzer, RedEnvelope's vice president of marketing.


RedEnvelope sent e-mails to specific sets of customers before the program launched, promoting it and asking whether they wished to enroll. They could click through a link in the e-mail to join the program.


The program is free, and straightforward: For every $200 a customer spends on the site, she receives a $20 RedEnvelope rewards certificate by e-mail that can be used to purchase any RedEnvelope product or service.


"They can use the gift certificates right away, they can save them and they can even give them to friends and family," Korotzer said.


The program was targeted to new customers, higher-value customers and others that RedEnvelope hopes to drive repeat purchases from, he said. Korotzer did not say how many people enrolled or how many e-mail messages were sent.


"The program was sent to a relatively small number of customers in this trial phase," he said. RedEnvelope has 2 million names in its customer file.


If the program meets its business goals in terms of enrollment and other factors, "we may consider broadening ... the program," he said. However, "we have no specific time frame. But I would suspect that we would expand it."


To manage the program, RedEnvelope selected Loyalty Lab's Customer Relationship Manager Suite. Loyalty Lab, San Francisco, is an on-demand retail loyalty and customer management solutions provider.


Loyalty Lab's flagship Customer Relationship Manager Suite lets retailers create and manage loyalty programs, e-mail campaigns and promotional offers from a single desktop. Clients include The Sharper Image, Smith & Hawken, Wine.com and Relax the Back.


The program's simplicity is key to its success, Korotzer said.


"Consumers don't really have to do much," he said. "They just come in and do their normal shopping. We track everything for them." In addition, customers easily access their progress via an online accounts center.


Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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