Being able to make exclusive offers to members of communities — true communities, like the military, first responders, and teachers — is a compelling route to long-term engagement and loyalty.
The concept of gated offers is nothing new; making discounts or other benefits available to qualified consumers. Lowe’s, for example, kicked off a program to provide 10 percent discounts to qualifying members of the military back in 2010. But as Ryan Fagan, director, sales and operations planning, told me, that meant putting an hourly-paid cashier in the metaphorical firing line.
“We were putting a store associate, not trained in identification checks, at a point of interaction with customers, to validate their identification; communicate why they did or did not meet the requirements; and ultimately become judge, jury, and executioner for providing a monetary benefit.” It didn’t go so well. “This was one of the most heavily complained about areas of the store,” said Fagan, “mainly because of inconsistencies. Some store managers gave the discount all day, every day to all active military, all veterans, all National Guard members. Some store managers held to a corporate policy that active members got all day, every day; veterans got three times a year on the major veteran holidays.”
The digital verification route
Leveraging the digital verification solution SheerID had two goals. “One, how do we take the cashier out of harm’s way, and have the highest fidelity verification process possible, with instant approval or denial?” SheerID provided a simple workflow, asking the active military member or veteran to provide just three specific pieces of identification.
Second: “To tie [these customers] into our loyalty program, so that we could provide them the financial benefit — but also start to personalize their journey and target back to them.” As to the first objective: “We’ve seen complaints basically drop off the face of the map; we don’t have complaints any more.” And the second: “We’ve had the great pleasure of starting to generate data-driven, personalized journeys with targeted offers.”
This is a game-changer, Fagan explained. “We’re able to talk to a community of people, differently from how we usually position customers on their home improvement journey.” Business as usual means: “You’re doing a re-model of your kitchen, or your appliance broke.” Building a journey which acknowledges customers as members of a true community (in this case, 26 million strong) is a big differentiator. And this community is a vital segment for Lowe’s.
“Lowe’s is an interesting retailer, in terms of the duopoly with have with Home Depot. We have a pretty well defined core customer segment, and the demographics of the armed forces fit it to a T, as well as any group could. You’re looking at a heavy, do-it-yourself skill-set. And they’re very coastal in nature, around bases, which is where our store counts fall into place.”
Active military and veterans already had the look and feel of core Lowe’s customer. “As we dug deeper into POS data,” said Fagan, “we saw them showing up highly in terms of trip counts. The average DIY buyer shops maybe six or seven times a year. This segment was over-indexing 2x in terms of trip counts.” But even so, 25 percent of the cohort came in just once, usually on a holiday associated with an additional savings offer, and didn’t return.”
The gated offer program is a route to persuading that sizable minority within the segment to re-engage, especially given that savings seemed to be a core driver for the initial visit. And with verification by SheerID, explained Fagan, “we can provide a more seamless experience. Once we verify a customer, we don’t ask them to verify again. The system-driven discount is automatically processed.” Fagan feels not only that the program helps provide “value to a customer segment we feel very passionate about.” It also helps Lowe’s be better than their “orange competitor” around convenience and efficiency. And yes, they’ve seen increased conversions since adopting the SheerID solution in March 2017.
Ryan talks about the program
There are more opportunities
But there are still opportunities being missed. “I don’t think we do a good enough job today,” admitted Fagan. “I’m going to be very transparent. We knew there would be a learning curve – getting current customers enrolled, tracking new customers. We are just getting to the place where we can really start to differentiate that omnichannel experience.”
It’s been easy to do something online. When verified customers log in, Lowe’s displays dog tags: “To showcase we know who you are.” It’s harder at store level, although associates will now thank active and veteran military customers for their service
“We today don’t do enough to showcase that we’re a top hiring company for veterans, and understand the customers journey better as they come into the store, For us, that’s the next generation evolve. The first hurdle was getting our veteran customers comfortable with us retaining their information. Part of SheerID’s value offering is that we make a decision based on the data — then they purge it. All we’re saving in terms of PII is that you were either verified or not. The hard part but really fun part is making a really differentiated experience out of that.”
I checked in with SheerID’s CMO Sai Koppala on the privacy issue. In the Lowe’s use case, all the customer needs to offer to be verified is first name, last name, date of birth, and branch of service. The only information retained is confirmation they were verified. How does SheerID go about that? Customers give explicit consent, said Koppala, when they volunteer to be verified. “What happens is that the end user is essentially raising their hand to take advantage of a gated offer, saying yes, verify me.” The consent gives SheerID access to authoritative sources of information; and not just for the military of course – they search college enrollment records to verify students, for example.
Indeed, while many of their clients — like Lowe’s, or Target with back-to-school gated offers for teachers — are seeking to engage with communities, many others are gating offers for students, with the intention of seeding early affinity with the brand.
The scope for gated offers is wide, Koppala said, but the strategy primarily solves for market noise. “Everyone’s in the same channels,” he said. “The channels are getting more and more expensive, and there’s so much noise. How do you rise above it? That’s where gated offers come in.” By blowing a bugle call to the right segment.
As with Lowe’s, said Koppala, “where the brand knows who their target audience is, that’s when the brand can make these exclusive offers. They are seeing tremendous benefits by doing so.”