Kellogg’s Rewards Program Doesn’t Flake Out on Digital

Americans hold 3.3 billion loyalty memberships, according to Colloquy’s 2015 Loyalty Census; that’s 29 loyalty memberships per household. But if brands don’t make rewards programs an easy experience for customers to partake in, then they’ll be the ones losing points.

Consumer packaged goods (CPG) giant Kellogg learned firsthand what it takes to create a seamless rewards experience from both a consumer-facing and back-end perspective when it enhanced its Family Rewards program this past June.

Loyalty isn’t just something you snack on…

For Kellogg, loyalty is all about driving share of purchase in a particular category.

“We might have 35% share of a consumer’s or household’s requirement in cereal,” says Dan Keller, VP of database marketing for Kellogg, “but in that household, we may only have 5% share of their cookie purchases and maybe 7% share of their cracker purchases, where we’d like to get 20 or 30%…. We always like the household to bring home an extra package more than they would have purchased previously within their category requirements.”

And few customers experience more category crossover than the eight million members of Kellogg’s Family Rewards program.  

The Kellogg’s Family Rewards program first launched in June 2012. Members could earn points for purchasing Kellogg products by logging in to their Family Rewards program account and entering the 16-digit codes printed inside of product boxes. Participants could then cash in their points for coupons, gift cards, sweepstakes entries, or charity donations. 

Not only did the program provide Kellogg with a wealth of transactional information but it also rewarded customers for purchasing products they may not have otherwise realized were owned by the CPG company.

Unfortunately, the customer experience wasn’t as delectable as the company’s Cheez-It crackers or Pringles.

“There’s always been a bit of a struggle for consumers being able to read the codes, enter the codes, find the codes,” Keller says.

In August 2014 the company started brainstorming ways it could make its program more palatable. After surveying its customer database, Kellogg discovered that people were more likely to engage in or join the rewards program if it were easier to collect points, such as with a loyalty club card or receipt scanner.

The company then worked to enhance its rewards program by introducing new digital components to both the consumer-facing and back-end sides of its program. Doing this, Keller says, would hopefully boost engagement among its current rewards members, as well as encourage non-participating customers to join.

A double dose of digital

From a consumer-facing perspective, the digital elements are all about ease of use. Instead of forcing shoppers to dig through boxes of Fruit Loops or Corn Pops, Kellogg is now asking consumers to collect their points in one of two ways: First, shoppers can take a picture of their receipt and send it to Kellogg’s mobile site, desktop site, or via text. Second, if customers have a loyalty card for a participating retailer, they can simply enter the loyalty card number in their account on Kellogg’s website, which the company recently redesigned, and then present the card at checkout when purchasing their Kellogg’s items in-store.

However, the back-end and data collection side is far more complex. To facilitate all of this incoming purchase data from its website and texts, Kellogg built a new infrastructure called “bus.” Here’s how Keller says it works: When a customer scans a receipt, the scanned image goes to a receipt processor called Snipp. Once Snipp validates the receipt, the platform sends the participating product information back to the central “bus.” Once back in the “bus,” the data is collected by Kellogg’s rewards partner Aimia, which provides a platform that handles the points accounting. After the point amounts have been assigned, all of the data flows into Kellogg’s database, which is built by Epsilon. The customer is then able to view his reflected rewards balance on Kellogg’s website. 

If the customer decides to forgo the receipt scanning and instead simply enter a loyalty card number into Kellogg’s site, then the process is slightly different. In that case the loyalty card number flows through the “bus” to SavingStar’s platform where the loyalty card is validated. SavingStar then recognizes the participating products, passes them back through the “bus,”  and Aimia collects and assigns the points. Then the information is displayed on Kellogg’s website and stored in the Epsilon database.

An appetite for data

Kellogg can get right down to the nitty-gritty of what consumers purchased too.

“We’re able to pick up Kellogg purchases essentially down to the SKU level,” Keller says. “We know that the item you purchased [was] Special K, 10 oz, red berry—[that’s] what we would pick up [from] the receipt.”

The company is able to use this data to enhance its marketing. For instance, Kellogg can use the data gleaned from the rewards program to send targeted offers to consumers via email based on what and where they buy. “If we know that you shop at Meijer, we can tell you about Kellogg products at Meijer,” Keller explains.

Tasty results

Kellogg officially launched its enhanced rewards program on June 2, and promoted the initiative through several channels, including email, social, digital, and product packaging. The company is already seeing appetizing results. According to Keller, the brand saw “thousands” of people participating in the program within its first few days in-market.

These results are especially sweet considering the challenges Kellogg needed to overcome to completely revamp its rewards program in roughly 10 months. For one, the company wanted to get this initiative done quickly and had to balance working with many technology partners.

“The key is to have a really strong, solid project manager in the middle of it to keep everyone organized and a group of partners that all understand their role and understand that working together for the common good is a great way to go and [leads to] a great outcome,” Keller says.

Not only did Kellogg have to wrangle vendor alignment, but it also had to align teams internally—a challenge Keller says many marketers face. “It requires a fairly significant investment, [and] it requires a strong belief that the program will work,” he says. “Once you get it going, you need to have a way to accurately measure results and prove to [y]ourselves or prove to the company that it’s working. We’ve been able to do that and the return on investment that we’re making is incredibly positive; the enthusiasm for the program continues.”

Finally, Keller says that the company’s marketers knew that not all of Kellogg’s reward members would be excited about changing their behavior. They tried to remain sensitive to this by providing several resources—including video tutorials, website and email instructions, and call center support—to help less tech-savvy customers navigate this new digital world.

All in all, Keller says keeping the company’s end goals in mind helped the revamped rewards program snap, crackle, and pop its way to success.

“We, as a collective team, have stayed focused on getting this program launched in a timely fashion and continuing to focus on the member or the consumer and making it the absolute best possible experience for the member,” he says. “We’re recognizing and realizing that we’re asking a number of people who signed up for a program with the intent of entering codes to switch to new technology…. We’ve been totally cognizant of the significant amount of change that we’re asking our members to go through. So, every step along the way we’ve been working incredibly hard to make sure that we make that change as easy as possible for the consumers.”

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