CVS – Improving an Already Winning Loyalty Formula
New updates to CVS App and ExtraCare rewards
Recently, we wrote about CVS’ deep entrenchment into both mobile optimization and into the hearts and (wallets) of customers. There’s little doubt that these tech-oriented actions and overarching attention to relevant loyalty strategies have propelled the brand’s recent financial successes and have paved the way for future growth and development. And as it turns out, this development is already well into the making as CVS looks to enhance its already successful ExtraCare rewards program.
CVS has recently announced key updates to its ExtraCare rewards program. The fulcrum of these changes? A renewed focus on delivering simpler, faster, recurring rewards. Through an analysis of customer feedback in tandem with a surge in digital engagement, the program is embarking a radical shift in its reward payout scheme: the program will now give 2% back in ExtraBucks rewards after nearly every transaction, rather than being distributed on a quarterly basis.
It’s worth noting that over the course of the program’s 20-year history, the core 2% return-on-purchases model has remain unchanged. When a model has been static for so long, one might assume that it’s because of a certain perennial effectiveness. “If it’s not broken, don’t fix it”, as the old saying goes. But as savvy marketers have come to know, many times the only thing that’s broken is an attitude that clings precariously to the past.
Old CVS loyalty model didn’t capitalize on instant gratification
The value of a reward for the customer is the material gain in resources that can help them live better lives, fulfill new experiences, or even meet basic needs. But what is the value of rewards for brands? It is the transfer of equity stemming from positive feelings for these rewards to the core brand itself. This intimate connection is most effective when the purchase behavior is inextricably connected to the action of receiving a reward. However, the old CVS model severed this connection — many purchases were made long before the reward was received, and the psychological impact of associating the brand with the reward was diluted.
CVS has changed all that. Now, ExtraBucks® Rewards will show up in the CVS App, on CVS.com, and on digital and paper receipts, moments after a purchase. And in a further act of hyper-personalized strategy, a new “birthday benefit” is being made available to members: $3 in ExtraBucks® gifted on the month of your birthday. This tactic aims to incentivize data collection and further entrench digital engagement, as the rewards will be delivered across email, SMS text message, and the CVS App.
“Our customers are at the heart of everything we do. We’ve evolved our ExtraCare program following an in-depth assessment that revealed what members love most about the program,” positions Michele Driscoll, VP Customer Engagement, Loyalty and Personalization, CVS Health. “They appreciate the value their membership provides, and they told us they want more flexibility in how they access and use their rewards.”
Other key program updates include:
- Special freebies offered exclusively in the CVS App beginning in late June and extending through July. ExtraCare® members will find a new free gift each week in the app, ranging from better-for-you snacks to health and beauty products.
- An upgraded CVS App user experience, allowing members to view, track, and send all their earnings and personalized deals directly to their ExtraCare® card.
- Reward utilization options enabling use upon next store visit or banking for later spending within 90 days of each respective issuance.
- A renewed focus on the CVS App to optimize ExtraCare® experience; members can choose to receive coupon reminders and special offers via ExtraCare SMS text messages, including surprise-and-delight deals tailored to their interests.