As a global leader in retail and wholesale pharmacy, the Walgreens Boots Alliance employs more than 440,000 people across 25 countries, but it is best known as the second largest pharmacy chain in the USA with approximately 78 percent of the U.S. population living within five miles of a Walgreens, Duane Reade or Walgreens-owned Rite Aid store. As a result, Walgreens USA enjoys approximately 8 million customers in its stores and online each day, and achieved revenues of US$136.866 billion in 2019.
With such a huge base of customers, and over ninety million active loyalty program members, it is exciting to learn that over 70 per cent of its revenue is generated by its Balance Rewards program, so in this article, we look at the structure and strategies that are driving its success with savvy US consumers.
The Walgreens app boasts a score of 4.8 out of five from over 2.6 million ratings!
Shopping in a “Non-Online” World
A key insight from Walgreens Chief Digital Marketing Office Deepika Pandey was published in a “Think with Google” article in 2017, as she explains their commercial approach and the commercial imperative to connect with customers digitally.
I also loved her clarity about the importance of delighting customers no matter what channel they choose to use, explaining that consumers no longer shop in an “online” or “offline” world—they shop in a “non-line world” – highlighting the importance of “exceptional customer experiences” that are simple and seamless no matter where or when customers choose to shop.
The Balance Rewards Loyalty Program
As shown in the video below, Balance Rewards is a points-based digital loyalty program, Their points currency is called “everyday points” and these are awarded based on consumer spend as well as bonus points for specific categories and behaviours.
- Members earn ten “everyday points” per dollar spent.
- 100 bonus points are earned for every prescription or vaccination.
- Points are awarded on production of a physical card, phone number or the mobile card within the Walgreens mobile app.
- Rewards start from 1,000 points requiring a $100 spend, giving a $1 discount on a later purchase – a 1% reward.
- 5,000 points are earned for every $50 spent on beauty products as part of the company’s “Beauty Enthusiast” concept – which is an innovative “program within a program’. This sector-specific program enables greater focus and segmentation for offers, coupons and rewards, while the 10% reward rate is undoubtably hugely compelling for this key demographic within this higher-margin category.
- A second sub-program operated within the main Balance Rewards program is called “Balance Rewards for healthy choices® (BRhc)” – a digital wellness program which currently has more than 850,000 active members nationwide. The free program allows members log their steps and self-monitor glucose and blood pressure, play games and earn points to save money on future Walgreens purchases. Over 3 million devices have been connected to date with members connecting through the Walgreens app or through fitness apps such as FitBit, Google Fit and Apple Health. This sub-program earned Walgreens the #13 spot on the annual Fortune magazine’s 2019 Change the World list, which highlights companies that leverage their businesses to drive profit and to create societal good.
Walgreens use simple 30 second animated videos to explain its loyalty program benefits.
Power of Personalisation
Some great insights on Walgreen’s loyalty strategy emerged in a 2017 retail conference, which was summarised in one word – personalisation, and some of the interesting ideas shared by Walgreens executives include:
- Data is used to create communications that customers “enjoy receiving” – no matter what their relationship is with Walgreens at that time.
- Every communication, whether it’s an invitation to join Balance Rewards, telling customers how close they are to a reward, or simply a post-redemption message is triggered by recent, relevant behaviour.
- Customers are sent “thank-you” messages every quarter (something we believe is often forgotten over time by purely commercially-led programs).
- Like top digital marketing experts, Walgreens uses internal member control groups and A/B tests extensively, with results from every test informing later campaigns for optimum results. These ensure that the loyalty team measures every detail such as timing, channel (email, direct mail, programmatic, coupons at the point of sale), the creative, the offer type and even the subject line message.
- As well as purchase patterns, Walgreens uses qualitative research to help them make their customer lives better and easier. One key insight from customers was that “they’re easily overwhelmed by the product choices available to them in stores” so the brand has now cleverly partnered with WebMD to create “Relief Advisor” – a simple tool where customers answer a couple of questions, and within seconds, the team recommend the products that best fit their specific needs. This digital partnership positions Walgreens and their partners as truly customer-centric expert advisors.
- In 2019, digital enhancements included the introduction of Alipay as a payment platform throughout Walgreens store network, targeting Chinese tourists who were increasingly travelling to the USA and Canada pre-Covid 19.
What’s Next for Walgreens?
Walgreens is clearly focusing on a singular goal of delighting customers through consistent and compelling experiences, supported by a digital platform that addresses customer needs in whatever channel they choose. This helpful approach and ongoing investment is one of the impressive qualities of a company that has already endured and thrived for more than a century including the Great Depression. With retailers focusing intensely on post-pandemic retail solutions, I’ve no doubt that Walgreens and its Balance Rewards program will continue to innovate, adapt and grow.
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialising in the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer, as well as Avios – the global points currency for some of the world’s top airlines. I am also a former judge for the Loyalty Magazine Awards.