Driving Loyalty Program Management for a leading Pharmacy retailer


  • CASE STUDIES
  • September 24th, 2020
  •   5649 Views

With the increasing competition and the changing market, one of the biggest challenges that retailers are facing today is customer retention. It is imperative for retailers to capitalize on personalized promotions using data-driven techniques to improve customer engagement and boost conversion rates.

Hence, implementing an effective loyalty program has become imperative for businesses.
Mu Sigma helped one of the largest Fortune 500 pharmacy retailers to optimize their loyalty program using advanced analytics, while providing 360⁰ support.

The Problem


A leading pharmacy retailer partnered with Mu Sigma to evaluate the success of the pilot version of its Loyalty Program and accordingly, make a business case for rollout.

The Fortune 500 pharmacy retailer had launched the pilot version of its Loyalty Program in 3 Markets, ~130 stores.

The Mu Sigma Approach


We adopted a four-part programmatic approach to help evaluate the short-term (pilot) success as well as the long-term (rollout) value of the program.

1. Stated problem representation
Define hypotheses to validate business expectations with data-driven analysis

2. Latent problem(s) mapping
Map problem network to identify latent problems with broader impact across business objectives

3. Execution roadmap
Deliver quick wins through an agile wave-wise execution of problems while also addressing long term needs

4. Long-term capability building
•   Leverage the Loyalty data to provide a new lens into decision making through strategic proof of concepts
•   Enable data-driven experimentation to evaluate variants of program design for rollout
•   Supplement the retailer’s enterprise data sources with a 360-degree customer data mart

The Impact


Mu Sigma supported the chainwide rollout of the retailer’s Loyalty program with several refinements such as:
•   Integration with other Rx programs
•   Removal of base points
•   Outreach for non- members

Further, the improved loyalty campaign helped the client in enabling:

•   Positive business case with a 6% increase in member spend
•   5% revenue lift post rollout
•   60% increase in campaign response rate
•   Decrease in marketing spend by $44M
•   Decrease in operating costs by $150M