From its humble beginnings as a hardware store in a small North Carolina town, Lowe’s grew to become one of the largest home improvement retailers in the world. The company counts nearly 300K associates, encompassing 1,700+ home improvement and outlet stores in the U.S. With more than 16M customer transactions every week, the brand celebrated $86.4B in 2023.
Mark Johnson, CEO of Loyalty360, spoke with Amanda Bailey, VP of Customer Marketing and Loyalty at Lowe’s, about building a tiered approach in the brand’s MyLowe’s Rewards program, applying personalization within customer loyalty, and engaging millennial homeowners.
Read the full article on Loyalty360 here: https://loyalty360.org/content-gallery/in-depth-exclusives/lowe-s-home-improvement-a-tiered-rewards-program-designed-to-engage-diyers-and-attract-millennials
From its humble beginnings as a hardware store in a small North Carolina town, Lowe’s grew to become one of the largest home improvement retailers in the world. The company counts nearly 300K associates, encompassing 1,700+ home improvement and outlet stores in the U.S. With more than 16M customer transactions every week, the brand celebrated $86.4B in 2023.
Mark Johnson, CEO of Loyalty360, spoke with Amanda Bailey, VP of Customer Marketing and Loyalty at Lowe’s, about building a tiered approach in the brand’s MyLowe’s Rewards program, applying personalization within customer loyalty, and engaging millennial homeowners.
Read the full article on Loyalty360 here: https://loyalty360.org/content-gallery/in-depth-exclusives/lowe-s-home-improvement-a-tiered-rewards-program-designed-to-engage-diyers-and-attract-millennials
Good afternoon, good morning. This is Mark Johnson from Loyalty360. Hope everyone's happy, safe and well. Want to welcome you to another edition of our Leaders in Customer Loyalty series. In this series, we speak with leading brands about what they are hearing and seeing on the front lines of customer channel and brand loyalty. Today we have the pleasure of speaking with Amanda Bailey. She's a Vice President of Consumer Marketing, consumer marketing and loyalty at Lowe's. Thank you very much, amanda, for taking the time to talk with us today.
Speaker 2:All right. Thank you for having me, Mark. It's great to be here.
Speaker 1:Absolutely. First off, we like to start these on a more personal level. We get to know the individual we're speaking with, so we'd love to know a little bit more about yourself, your current role at Lowe's and maybe a fun fact or passion you may have outside of work when you get the opportunity to do something fun.
Speaker 2:Absolutely so. I am the vice president of customer marketing and loyalty at Lowe's, so I oversee all things related to how do we get to know our customers better so that's both our homeowner customers as well as our pro customers and how do we drive recognition of those customers and additional trips from those customers and learn more about them and then put that data to work through our customer marketing efforts. So that's a lot of how I spend my time across loyalty and, ultimately, in the spirit of driving more relevant relationships and experiences. On a personal note, outside of work, I really enjoy exercising and hiking, so just spent some time in spring break getting out with my kids and my dog hiking all different parts of you know the areas of North Carolina and Virginia and which is great, so I really enjoy that okay.
Speaker 1:Lowe's recently announced and launched a new my Lowe's reward program, which was created to engage its DY do-it-yourself customers. Can you share a little bit about the strategic design of the program and why Lowe's is focusing on the do-it-yourself consumer?
Speaker 2:Absolutely so.
Speaker 2:We developed the MyLowes rewards program really with the deep understanding of the homeowner customer or the DIY customer.
Speaker 2:They account for a significant portion of our business and it's really critical for us to continue driving relevance and engagement from these customers.
Speaker 2:And so this whole program was designed to drive traffic and repeat visits and really help our customers feel motivated to think of Lowe's for all of their home improvement needs, and that's big, big purchases like an appliance, all the way down to the very small things like the Tide Pods that they need and everyday household items. So this program is really designed to capture all of those trips, both big and small, and, you know, in doing that, gain additional insights and information about our homeowner or DIY customer, which we then use to customize our offerings to them and allow us to better meet their needs. And then the last piece of the design that I think is really important to highlight is that we did this in a way to really think about how do we drive omni shopping behaviors, thinking about the digital experience connected to the in-store experience which a lot of retailers are out there trying to crack the code on. But we really believe this is key to getting that ongoing relationship and stickiness with our customers.
Speaker 1:Absolutely. It's an interesting time right now when people, when brands, look at the opportunities for customers, understanding them online, offline privacy challenges as you know, different states look at privacy different and how you can access different data sets to create that engagement. It sounds like you're doing a very unique job. And how you can access different data sets to create that engagement. It sounds like you're doing a very unique job. When you look at the launch of the program, were there a couple of things that you expected when you launched the program that you didn't see, and maybe a challenge or two that you didn't expect that you saw when you launched the program?
Speaker 2:So I would say that the things, the couple of things that we knew were important when we launched the program were, first and foremost, our store associates are the heart of our company and so much of our business happens on the ground, in the field, in our store. So one of the things that we had to be really prepared to address and make sure was buttoned up was how we interacted and launched the program on the store level. So really getting our associates engaged in the program, helping them understand it in a very simple way and then, more importantly, getting them to get excited about it and use it. So we introduced an opportunity for all of our associates to get instant silver status, which is the second tier of the program, and we weren't sure how that was going to go. But we've been surprised, pleasantly surprised, and really excited about how much engagement we've been able to see from our associates. That's really driving the momentum and early successes we're seeing with the program.
Speaker 2:As far as some of the maybe more challenging things is, you know, as we were rolling, we started, we soft launched the program in January at only five stores and then, you know, had to kind of work our way up to our national launch in March to our stores nationwide and along those ways we learned a lot of things about barriers in the digital experience that we had to overcome and we were really able to move quickly with our digital and tech teams and store operations team to resolve those quickly so that we could be prepared for national launch. But it was something we had to keep an eye on and something we expected. But you never know what's going to come until it's in front of you and you hope you can solve it quickly, which we did, which was great.
Speaker 1:That's awesome and to your point, some of the challenges that you see regarding the launch of the program that's a pretty consistent thing we see when you do our research is having brands get their customers, but also there's front level employees that have to understand the value of the program and most people have at least an initial onboarding or training but kind of that ongoing training. How you continue to reinforce the value of the program and make it front and center is a big challenge, and having them ability to participate at a higher level allows them to understand a deeper understanding of the program. For sure. Having them ability to participate in at a higher level allows them to understand deeper understanding the program, for sure.
Speaker 2:Yes, absolutely. It's that kind of everyday usage that this experience is something they personally can use, and then the constant reinforcement in their day-to-day training and huddles with the store managers that have really been a great part of our success and ongoing momentum as we continue to learn and grow the program.
Speaker 1:How did you determine the three-tiered status, the three-tiered loyalty program, when you rolled it out? And either bronze key, silver key and gold key? How did you determine what was the best approach when you look at a tiered program?
Speaker 2:Yes, of course.
Speaker 2:So we were very intentional about having a tier-based program.
Speaker 2:We went back to our primary goal, which was to drive more footsteps but, more importantly, those incremental visits, so that additional trip from every single one of our active customers, which is kind of the North Star of the program.
Speaker 2:So to do that, we had to be intentional about looking at how do these DIY or homeowner customers spend today.
Speaker 2:You know, how much do they spend on average throughout the year, and how can we set our tiers of appropriate levels to drive that increased spend and additional trip, which was very important to how we designed it, also a kind of in the notion of tears, this, this notion of gamification. You know, some of the best loyalty programs out there and ones we've been inspired by, really have leaned into gamification, and so our introduction of a points-based reward system that allows you to earn points on spend as well as engaging with us and doing so at higher levels as you move up the tiers, so that you can earn Milo's money and basically use that to come back to Lowe's and shop at our stores, was one of the big components of the design. So we looked at what are our customers spending today and then what is that opportunity to motivate them at each of those thresholds along the way through more points that ultimately get them to earn Milo's money, and then more benefits the more they do with us? Okay?
Speaker 1:You mentioned gamification the more they do with us. Okay, you mentioned gamification. Experience rewards are all areas that brands are focused on. The experience rewarding education is a big area of interest within our brand community, but being able to do it right, to understand the customers and to use gamification in a way that creates, obviously, engagement and emotional loyalty, but also to potentially drive zero party data, can be very impactful as well. You know how are you using experience rewards at Lowe's?
Speaker 2:Sure. So we at Lowe's have had for a number of years we've hosted in-store events our DIY adult workshops, our kids workshops, which have been incredibly successful in terms of participation and engagement offering, so that we can really do things that are more, you know, relevant to our loyalty members, because we're learning more about them every day, not only what they're buying, but also what their interests are. So, you know, we know we have a lot of folks, which we do know, that love to garden. We can have a gardening workshop and we know that by doing that and for our members and we have a great opportunity to engage them and give them something really relevant and delightful when they come in and shop with us. So you know, this notion of experiential rewards, or just giving them reasons to come into our store, is kind of at the core of our program, and so you know, that whole idea of experiential is is is key and we're leaning into things we already do and making them that much better because of how much more we know our customers.
Speaker 1:Okay. So when you look at the the future for the program technology plays a big piece in kind of evolving experiences. We have a survey right now looking at the different component pieces of our customer multi-marketing stack and we have 26 different pieces Others have. It can vary, but when you look at the MyLo's Rewards program, you know, using in-app experiences and using technology, you know how does this enable you to create more personalized experiences for the customer.
Speaker 2:Of course. So, as I mentioned earlier, you know, mylo's Rewards is a fully integrated experience within our app, across our website and then in our stores. And you know, one of the challenges we've also been kind of focused on is how do we get more of those in-store shoppers to engage with us in our other channels of app and online. And so by having our members be able to track their points progress, get access to member-only offers in their digital wallet, they're telling us more about themselves, like I like to garden or I'm a new homeowner or I'm into decorating. We're getting that information and making it fun to capture that in the app experience so that they're more inclined to use that and get to know us better.
Speaker 2:I think the other big part of this is our loyalty. I'm sure you talk I know you talk a lot about loyalty marketing tech stacks and there's so many solutions out there. We talk I'm sure you talk, you know I know you talk a lot about, you know loyalty marketing tech stacks and you know there's so many solutions out there. We've built our loyalty ecosystem, you know, from the ground up here at Lowe's, and so you know we have a lot of infrastructure in place to really power this program and then continue building and optimizing it based on what we learn about our customers.
Speaker 1:Okay, well, that's interesting because one of the things that we're seeing right now, there are a number of brands kind of going into COVID who have built out centers of excellence internally, built the program, built the technology internally, but now there seems to be kind of a push to working more with outside consultants. They haven't been able to keep up the technology and platform. So it's great to hear that you have that commitment, because many brands are struggling right now with having the ability to get those dedicated resources to build the programs in the manner that we'd like to.
Speaker 2:Yeah, and it's fair and I think all brands and companies are probably challenged with different things, as we all are, and kind of the notion of our program intention for customers and internally is to keep it simple and build things that are going to create value for our customers and for the business. So when you do that and kind of keep that North Star, you know that does help to ground you, um, in that way excellent, and customers that are currently using the brand's advantage credit card are going to be transitioning to the my lowe's reward card.
Speaker 1:You know what are some of the advantages of the new card sure, yeah.
Speaker 2:So uh, the lowe's advantage card became the Milo's Rewards credit card with the launch, and all cardholders which existed before and still exist today save 5% every day at that point of sale. So with the credit card, you get 5% off instantly at point of sale, which is a differentiated proposition in the home improvement space. On that same transaction, there are also earning points that they can keep for future purchases, for Milo's money and earnings. And then, on top of that, all of our credit card holders unlock silver key status, which gets them earning points faster, and ultimately, free shipping and other advanced perks that we'll introduce at Silver. So we're reminding these customers every time they shop at Le's they get this instant value.
Speaker 1:They're earning rewards and getting more accelerated benefits for being a card member okay, when you look at preparing the card holders to uh, you know, get the new card, that uh, that's a big area of discussion as well, because we've seen over the last year, when our membership community, many brands have moved from one provider to another capital, fmbo, fmbo, to chase whomever, but that that communicated the new benefits of the program, communicating the new benefits of the card and then transitioning the card can be a challenge. How did you uh prepare and approach that now? Have you experienced any challenges in that regard?
Speaker 2:so we worked in lockstep with our provider. That didn't change in the transition, which was great. And so we've had a long time partnership with Synchrony and that had kind of kept us in lockstep as a partnership. And so in January all of the existing cardholders received a notification about this change. That would be happening in March and we kind of kept them updated along the way in each milestone and they knew that the cards would be rebranded, they would keep the the great value of five percent, and then the nice thing was we were giving them something even more on top of the great benefit that they enjoyed.
Speaker 2:Um, and then on top of that we had to be very mindful of not only the our customer care team but also the credit providers customer care team. Each they had extensive training and were prepared to address questions as we rolled out. So there's kind of not only the launch, the pre-launch moment, there's the launch moment and then there's multiple kind of touches with these customers even after the launch, to make sure we get them set up in their new card and on their way to earning rewards.
Speaker 1:Okay, Personalization is another area that's very important to those who run customer loyalty programs, as you know. How is Le's leveraging consumer insights and data to strengthen their personalization efforts and and how does lowe's anticipate kind of pivoting to meet customer experiences and preferences as as they change over time?
Speaker 2:so of course, we're contained. So so the I think the big thing that I always latch on to when you think about loyalty and why a loyalty program is so important in empowering personalization, is now our customers have a reason to tell us who they are when they shop. So you know, first and foremost, now they are identifying themselves when they come into our store by scanning their member IDs. So we're capturing so much more of you know what are they buying on that trip, when and where, and doing so also online. You know. Now you no longer want to check out as a guest because you're getting rewards by telling us who you are. So that in itself of just capturing even more of that transactional data is kind of part one.
Speaker 2:The second piece of it, which we talked about a little earlier, was this notion of collecting more zero party data, or data our customers are willing to tell us about themselves like I love to garden, because they know when they do that enables us to give them a better experience and something more relevant to them, and so that is a big kind of part of the program, and it's also part of the gamification strategy, like tell us more about yourself, we'll incentivize you for doing that, and then you know, on the other end of it, give you a more relevant experience, and so really leaning heavily into this and recognizing that loyalty really is the platform that enables us to do that, and you find that customers are more willing to give you that information that if you put it to good use, which we're very focused on doing- Absolutely.
Speaker 1:When you look at data and privacy regulations, a lot of change there. You know 10, 11, 12 states have privacy regulations and more are coming. You know how is Lowe's looking at day-to-day privacy and communicating transparency, because that could be a great way to foster and engender trust with the audience as well.
Speaker 2:Sure, well, of course, protecting customer information is a top priority for us, and we have some really stringent safeguards in place to protect our customers' information and make it clear to them what we're using that information for, and so the notion of loyalty and being transparent about the information you're giving us and then the customer seeing us use it to make their experience better is what we continue to be focused on use it to make their experience better is what we continue to be focused on.
Speaker 1:Okay, when you look at voice of the customer a very important way to design or enhance programs what role did voice of the customer play when redesigning or designing the my Lowe's Rewards program? Because, as we talked, as we prepared for this, you're one of the only ones in market right now that has kind of a do-it-yourself focused, uh, customer loyalty program, or most of the competitors are focused more on the contractors, right, the people that are, uh, you know, doing this for a living, and you're focused more than do-it-yourselfer yeah, absolutely so.
Speaker 2:Our primary design target for this program is the millennial homeowner, especially those with kids. I mean there's 82 million households out there and while we believe every single household and homeowner wants to come to Lowe's, we knew we had to focus. And so by having that focus and spending more time getting to know that customer, not only do we know they take they're at that phase of life where home improvement just naturally is part of their life from growing families, changing houses and they spend more on average than the average homeowner during this time but we also learned that they shop at multiple retailers to fulfill their home improvement needs. So they look to certain retailers for value, others for convenience, others for expertise. And you know, through our research and focus groups and discussions we learned that you know, if we were to provide something that would give you them value, convenience and expertise and consolidate that into a value proposition around home improvement, they'd be more compelled to bring all of their business to Lowe's.
Speaker 2:And that was a lot of what we learned in the development of the program. So we really focused on tailoring the benefits of I want a simple way to get value and rewards. I want to get free stuff. Everyone loves free stuff. So our free member gifts we're doing our first one in May coming up for all of our members. Get a free plant in May where they'll come in, which is exciting. The free workshops, free shipping and then continuing to kind of look into this millennial homeowner and understand what are their unique needs that we can keep optimizing against and giving them the right value.
Speaker 1:Okay, great, when you look at other programs out there from a customer loyalty perspective, are there programs that you admire, that you are loyal to, and what do you like about their offerings, and did some of those offerings enhance what you did with the my Loads Rewards program?
Speaker 2:Yes, absolutely so.
Speaker 2:You know, as someone in loyalty for a number of years, very obsessed with the whole notion of loyalty, and take a lot of inspiration from a lot of companies out there.
Speaker 2:We took some best practices from hospitality and my background in Hilton, you know and I think how they have been able to really double down on experience.
Speaker 2:To make the stay better and more personalized for the customer is inconvenient. The stay better and more personalized for the customer is inconvenient. We took a page from the likes of Sephora, where they've just done an incredible job with personalization and free gifting to get their stickiness from their customers to keep coming back and evolving the offering based on the customers that they have. And then the big retailers like Target, who recently did a big relaunch of their program, really leaning into their free program credit and now a paid model, which has been a great inspiration point. And then, with gamification, we're looking to folks like Starbucks, of course, that just have done a brilliant job really driving those incremental behaviors and different behaviors from customers through the use of these small micro challenges that get customers to engage differently. So all of these programs for you know, for them and others, have really unique ways they're engaging customers, and so a lot of our inspiration from some of those.
Speaker 1:Excellent. And last question what can Loyalty360 do to help you and your team with your customer loyalty efforts? You know what resources may you be looking for.
Speaker 2:Yeah. So I think on continued conversations like this with other leaders in similar positions, thinking about loyalty, thinking about how to engage their customers, is incredibly valuable just to get that insight and perspective from so many different companies tackling similar challenges. And then the other flip side of that is, you know, continuing to not only ask about the components and mechanics of the programs but the customers that we're all trying to reach, because, at the end of the day, we're all humans and have unique needs, and so constantly learning about the customers that we're all trying to reach Because, at the end of the day, we're all humans and have unique needs, and so constantly learning about the customers that brands are after and trying to drive loyalty with is something that is always really interesting and relevant to us.
Speaker 1:Ok, thank you very much. Very interesting perspective on customer loyalty and love how you guys have developed the program. Now we have the infamous and fun fire questions. We like to keep these to one word or short phrase answers, or I get in trouble with Nick and the content team and I'm always in trouble. Try not to so. First off, what is your favorite word? Passion, nice. What is your least favorite word?
Speaker 2:Actually, there's actually no reason for actually in the vocabulary. Think about it.
Speaker 1:Okay, what excites you?
Speaker 2:Honestly, when one of my kids scores a goal at soccer or wins a swim meet, that gets me excited every day.
Speaker 1:Soccer and swimming. We have a whole different discussion there. I have two kids doing one in college right now and I can tell you good and bad. So if you ever want a discussion, let me know. So what do you find tiresome?
Speaker 2:Sitting still, once I'm down, I'm down.
Speaker 1:What is your favorite do-it-yourself project that you've created?
Speaker 2:Building garden boxes in my house to kind of do our own. Our first vegetable garden.
Speaker 1:Okay, excellent. And what is your favorite book recommendations that you'd like to make to colleagues.
Speaker 2:One of my favorites is Radical Candor by Kim Scott.
Speaker 1:Yeah, good book. What profession other than the one you have now would you like to attempt?
Speaker 2:I thought about this news anchor or something in the detective space. Two different realms but both interesting.
Speaker 1:Okay, who inspired you to become the person you are today?
Speaker 2:My dad.
Speaker 1:Excellent, good answer. What do you typically think about at the end of the day?
Speaker 2:How there are not enough hours in a day. It's often crossing my mind.
Speaker 1:Great and last question how do you want to be remembered by your friends and family?
Speaker 2:Energizing and optimistic.
Speaker 1:Okay, that was awesome. Well, thank you very much for taking the time to have a conversation with me today, Amanda. It was great getting to know you a little bit and also to get to know more about the my Lowe's Reward Program. Yeah, very interesting. Thank you for taking the time to share with us today.
Speaker 2:All right, thanks for having me, mark, take care.
Speaker 1:Absolutely, and thank you everyone for taking the time to listen. Make sure you join us back for another edition of our Leaders in Customer Multi-Series and until then, have a wonderful day.