How you launch a loyalty programme with success

VITA is Norway’s biggest perfumery, beauty and health shop offline as well as online. They have recently launched a loyalty programme and after eighteen months they have 700.000 members and still counting.

Torkel Johannessen is the Head of Ecommerce and Omnichannel and Alf Johndal is the Head of Club Vita and Online Sales and Marketing Manager. Between the two of them, they have 30 years of ecommerce, retail and sales experience.

Present yourselves and the company

Torkel Johannessen: I am the Head of Ecommerce and Omnichannel, which means I am overseeing all digital and ecommerce activities in Norway and Sweden. I have 15 years of pure online experience, I have worked for several years at match.com, Yahoo, I have start-up experience, I have done consulting, and I have been Head of Digital Development for Egmont Magazines Nordic before I joined VITA in 2014.

Alf Johndal: I am the head of Club VITA, the loyalty programme, and besides that I am the online sales and marketing manager. I have a 15-year retail background. I have been a part of the online community for a while too and managed Clas Ohlsons Norwegian ecommerce operations who won an award in 2013 as the best ecommerce site in Norway.

VITA is a privately owned retailer and the largest cosmetic retailer in Norway with a market share of 30%. We sell exclusive and regular perfumeries and beauty products. In numbers, we have 214 stores, 1000 store staff, 35 years of operations and 1,2 billion NOKR in last year revenue.

2,5 years ago VITA made a strategic decision to focus on online sales.

Walk me through your technical setup

18 months ago we launched Club VITA, our loyalty programme, and we have already acquired 700.000 members. We are standing with one leg in the ecommerce camp and one leg in the loyalty programme camp. We try to harvest the effect in both of those areas, so we are extensively building a bridge between those two camps.

We are running on Magento. We have Trollweb as our service provider and are running a lot of projects with them, trying to create a true omnichannel experience. Convert Group handles UX and website design and we use Vianett and TargetEveryOne for mobile communication. We have Microsoft Dynamics as our ERP system. Axia is our EDI system.

What is your most important marketing channel?

We have a small digital team, and rely on agencies for helping us with some of the channels. We focus primarily on acquisition marketing, not boards or banners. If we do that, it is for retargeting.

The primary channels for us are AdWords and email marketing. SEO is of course also important, and we have spent a lot of time on tripling the SEO traffic to the site. We also see a lot of direct domain coming to our site.

We follow the standard campaign structure of the company. The VITA classic concept is very campaign driven, and we have new campaigns all the time.

Every three weeks we launch new campaigns, and we distribute them broadly to TV, radio, flyers and the online part tag along to those campaigns. The campaigns are planned six months ahead. We have an extensive offline marketing team with various functions focusing on the retail side, and we then duplicate the online campaigns.

»We follow the standard campaign structure of the company. The VITA retail concept is very campaign driven, and we have new campaigns all the time.«

Torkel Johannesen, Head of Ecommerce and Omnichannel, VITA

What is your hardest marketing channel in terms of ROI?

That is banners and boards, i.e. buying directly from media players. We are pretty much giving that up and see significantly better returns from network buying, retargeting and programmatic. With a very established brand, there is little effect derived from building pure brand awareness through our online marketing.

What do you outsource?

Compared to our size, our online marketing team is not that big. We are mainly outsourcing AdWords and SEO — we are using the same agency, Inevo, for both of those tasks. They set up the account and manage the campaigns. We found it hard to find that form of extensive experience in-house. It is hard for an internal expert to stay on top of the newest trends and functionalities too.

If we want to make changes to the website we call Trollweb or Convert for UX and design.

Tell me more about your omnichannel strategy

I (Torkel Johannesen) am responsible for Omnichannel on a strategic, but on a day to day basis everybody in the organization is in charge of driving omnichannel — from the CEO to the store personnel. At the end of the day we are agnostic as to where we generate the sale, in the online store or through our extensive store network.

We are launching an app and do a lot of other things to link everything together in the best and most natural way as possible. What is important is that the customer engages with VITA.

»On a day to day basis everybody in the organization is in charge of driving omnichannel — from the CEO to the store personnel. At the end of the day we are agnostic as to where we generate the sale, in the online store or through our extensive store network.«

Torkel Johannessen, Head of Ecommerce and Omnichannel, VITA

How does the customer club support that?

The store personnel are meeting the customers every day and are therefore a significant part of the customer experience. Through Club VITA, we have managed to get a closer grip on that part, which was a part of the goal. We follow every single employee, how they recruit members to the club and how they support the online part of VITA.

We don’t see it as if we are moving the sales away from the physical retail store. We know that a lot of our traffic is research traffic, and then the customer buys offline. The online store is much more important than just sales — it works as a brochure too.

»We don’t see it as if we are moving the sales away from the physical retail store. We know that a lot of our traffic is research traffic.«

Torkel Johannessen, Head of Ecommerce and Omnichannel, VITA

You need to share findings and educate on why we are doing this and how it impacts the company. The second factor is competitiveness. Sales personnel are usually competitive and want to compete — and that positive sense of competition is certainly aiding us.

We have our database where all data is stored, and we try to make sense of the findings we do and implement personalized emails and messages. On a weekly basis, we segment on hundreds of different data. Our end goal is that no two newsletters should be identical.

»Sales personnel are usually competitive and want to compete — and that positive sense of competition is certainly aiding us.«

Torkel Johannessen, Head of Ecommerce and Omnichannel, VITA

It all comes down to motivated and educated store personell. They see the customers and understand what is happening to the market. When we give them the opportunity to recruit loyal members, they can communicate with them directly and invite them to VIP events. We have given them their own channel to communicate with the customer — and it is a huge benefit to them.

The individual store can send messages to their customers whenever they have something to invite them to, and we manage the campaigns.

We are also handling all Facebook activates here, and we control the messages the stores want to send out, to maintain a high quality.

How and what do you track?

From an ecommerce perspective, you can and should track everything. You should have a firm grasp on the conversion funnel and understand it entirely.

In the physical stores, we are adapting to a lot of the terminology we have been using for tracking — we implement heat cameras, focus on conversion optimization and so forth, which enables us to have a firmer grasp on the store networks and helps store managers to optimize their stores.

»You can and should track everything. You should have a firm grasp on the conversion funnel and understand it entirely.«

Torkel Johannessen, Head of Ecommerce and Omnichannel, VITA

What is your best advice for anyone who wants to implement an omnichannel strategy?

The most fundamental thing is the understanding and buy-in from the top level down. Company owners, the board, and management group must be involved from the outset. There must be a clear sense of the investment in man hours, time and cost. It is not just something you delegate to the marketing department. Then you are bound to fail.

Tell me more about Club VITA

The goal is to increase basket sizes in stores and to increase the frequency of buys — and creating loyalty of course.

We do the content creation in-house. We send out newsletters weekly, and we do a lot of tailored content based on interests and categories. We also go down to the product level, and we are trying to create them based on your buying history, and the next level of refinement will be predictive buys.

We segment on demographics (age, interests, and town) and our concept level — if you are VITA Classic or VITA Exclusive member.

»We send out newsletters weekly, and we do a lot of tailored content based on interests and categories.«

Alf Johndal, Head of Club VITA, VITA

The sign-up process is simple — we get the phone number and email address and then we get you to fill out a more detailed profile afterwards. When we ask, it is simple questions like town and interests. We use Analytics to investigate what you are buying and thereby creating a fuller profile on you.

It is a huge job to really personalise everything, which we are in the middle of. The content will proceed to get more and more tailored.

To create the personal experience you need to add a lot of big data sources — we have around six data sources which we try to bundle together and get more advanced data. The more data sources you add, the more complicated the process is going to get.

»The more data sources you add, the more complicated the process is going to get.«

Alf Johndal, Head of Club VITA, VITA

What is the coolest thing you have done?

We are currently engaged in a project with ESV Digital, where we create deep algorithmic traffic on our marketing channels to more fundamentally understand where the traffic is coming from, where we can differentiate from the first and last click, figuring out where we get the traffic from.

ESV provides us with a dashboard that gives us deeper information than google analytics on an algorithmic level. We can see that Google and Facebook are reporting correctly but that affiliates generally claims ownership to more transactions than what is the real case.

Starting out with algorithmic analysis has given us a new level of understanding of our conversion funnel, and provided real tangible and actionable insight.

What do you see as a big mistake?

It is a failure when a small team takes on too much work simultaneously. We are eager to do everything at once, but sometimes you have to be more conservative and say no to projects.

From a customer perspective they engage with your ecommerce site — but our time is often tied up in improvement projects with longer horizons. We have certainly learned that you need to have someone constantly adjusting your site, making sure top sellers are on top and that you aren’t out of stock. We have had some out-of-stock hurdles because of that.

Give us your best ecommerce advice

Have a clear grasp on the conversion funnel and make sure you do activities on all levels simultaneously. Don’t just optimize your check-out or focus on inbound traffic. You should understand how it all ties in with the conversion funnel and prioritize your efforts based on what gives the best effect

Keep it simple — understand your customers.

Have a keen eye on merchandising. Focus on the products and the trends out there.