Targeted promotions aimed at specific groups like the military or students have been around for a while. But verifying that the customer is a legitimate member of the targeted group has always hampered their effectiveness because it wasn’t possible to do online. Just ask Lowe’s.
Lowe’s has made a strong commitment to recognizing the military for their service to the country. When the home improvement retailer launched their military discount program in 2010, busy store associates were responsible for verifying a customer’s military status at the point of sale. This sometimes created awkward exchanges between the associates and customers who wanted the discount, but couldn’t provide proof of their status.
To make their targeted promotion work, Lowe’s needed a better way to confirm that shoppers were eligible for it. SheerID, an online digital verification platform, provided the crucial missing link by instantly verifying customers’ military status. The solution dramatically improved the customer experience.
“We’ve seen complaints basically drop off the face of the map,” said Ryan Fagan, Director of Sales and Operations Planning for Lowe’s.
Now Lowe’s is using digital verification to tie their military discount to their loyalty program, which helps them engage more deeply with a customer segment that closely aligns with their core business.
Lowe’s found a way to effectively leverage targeted promotions, but the questions remains: can other companies follow suit?
More Precise Targeting Increases Personalization
It’s no secret that customers today want personalized experiences. Advances in marketing technology and customer intelligence now enable more precise and automated messaging. When brands use this to increase engagement, personalized marketing can transform the marketer/buyer relationship.
- 78% of internet users said personally relevant content from brands increases their purchase intent.
- 88% of U.S. marketers reported seeing measurable improvements due to personalization.
- Personalization can drive 5-8x ROI on marketing spend
But while targeting an online message has seen dramatic results, what about targeting a promotion?
Targeted Promotions Used to Face Big Obstacles
Historically it has been virtually impossible to target a specific group with online promotions because they were so easily shared that they weren’t really “targeted.” In other words, they weren’t protected. And even if there was some form of verification in place, the types of consumers who could be targeted were limited to those that could be most easily verified by the retailer.
Those obstacles no longer stand in the way of creating lucrative targeted promotions. There’s a new approach that addresses these concerns and delivers results: gated offers.
Gated Offers Are Powerful Targeted Promotions
Gated offers are promotions designed to target members of a particular group based on their occupation, life stage or affiliation, such as teachers, students, seniors, or the military. They work because they rely on digital verification to confirm a person’s eligibility before the offer can be redeemed.
Gated offers are more deeply moving than campaigns driven by other targeting criteria because they:
- Tap into a deep sense of belonging to a “tribe” that make members of the segment feel special.
- Reward shoppers for who they are, which motivates conversions and inspires loyalty.
- Foster a connection with target segments that strongly distinguishes a brand from its competitors – not only in the eyes of the groups’ members, but also among those who support them.
Gated offers are a highly effective form of targeted promotions because they have great appeal. Their exclusivity cuts through the noise and inspires customers to embrace them. According to our consumer survey:
- 94% of shoppers would take advantage of a gated offer.
- 91% would share one with friends and family.
- More than two-thirds say they carry more weight than traditional promotions.
Successful Brands Use Gated Offers as Targeted Promotions
According to Fagan, targeting the military with gated offers has helped Lowe’s increase customer satisfaction and generate deeper brand loyalty. It’s also opened new avenues for personalization by allowing Lowe’s to create experiences that recognize customers as members of a true community
“We’ve had the great pleasure of starting to generate data-driven, personalized journeys with targeted offers,” he said. “We’re able to talk to a community of people differently from how we usually position customers on their home improvement journey.”
This approach was particularly effective because the segment was naturally aligned with Lowe’s brand identity. Active military and veterans already had the look and feel of the company’s core 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.”
Other retailers have benefited from gated offer, too.
Target used gated offers to power their nationwide teacher discount program, and it couldn’t have come at a better time. According to our latest teacher survey, teachers this year spent an average of $652 dollars of their own money on classroom supplies, instructional materials and professional development – a whopping 39% increase over last year. It’s no surprise that our survey also revealed that 83% of teachers said they’d choose a retailer that offered a teacher discount over one that didn’t.
Urban Outfitters successfully landed a summer promotion to college students, boosting early back-to-school sales with a limited-time gated offer they amplified across multiple channels.
SheerID’s 5-Step Plan for Creating Targeted Promotions with Gated Offers
While Lowe’s, Urban Outfitters and Target have their own way of leveraging gated offers, the one thing they have in common is they all use SheerID’s Digital Verification Platform to verify shoppers’ eligibility. This essential step makes it easy for their audiences to redeem the offers, and ensures that the targeted promotions are truly exclusive.
Other brands can replicate these companies’ success by following SheerID’s 5-Point Plan:
1. Align Your Ideal Buyer with an “Eligible” Segment.
Determine the traits and demographic variables of your target audience, then map them to a verifiable segment, such as college students, military, teachers or by age group (e.g. seniors). Then decide on your goals — are they customer acquisition, retention or both?
2. Create a Gated Offer in Recognition of Buyer Eligibility.
Structure your gated offer to map to your goals, but be sure it preserves the impact of the invitation by making the customer feel welcome, empowered, and a part of something special. Supporting your offer with related advocacy programs will deepen your connection with buyers and bolster your program’s authenticity.
3. Invite Customers to Enjoy the Offer.
It’s important to remain genuine and consistent with your overall brand identity, while also using language that speaks directly to your targeted customers in ways that will resonate. Once you’ve created your offer, make it easy to find by featuring it on your website and across multiple marketing channels.
4. Verify Buyer Credentials to Mitigate Misuse and Demonstrate Offer Integrity.
Our customer audit revealed that discount abuse can be as high as 35%. Digital verification is a critical step to ensure your targeted promotion remains exclusive to its intended audience. Digital verification should use first-party data maintained by an authoritative data source and be able to verify your customers’ credentials instantly and within your brand experience.
5. Begin a New Kind of Customer Relationship.
While you may wish to drive acquisition with a targeted promotion gated offer for a one-time discount, the opportunities really take off when gated offers are part of your ongoing promotions. Evergreen offers continuously build loyalty while maintaining awareness and keeping your brand top of mind with high-value customers.
Want to Learn More About This New Approach to Targeted Promotions?
Download our Definitive Guide to Gated Offers for everything you need to know about acquiring and retaining loyal customers with gated offers.