Hawthorne's Pizza Uses Digital Coupon Solution to Grow SalesJanuary 28, 2013 By Joe Keenan
PROBLEM: Hawthorne's Pizza, a five-store chain in Charlotte, NC, wanted to grow its business through new customer acquisition as well as increasing the spend of customers already frequenting its restaurants.
SOLUTION: Partnered with a digital coupon/offer solution provider that works with banks to target relevant offers to consumers via their online bank statements. The offers are based on consumers' purchase histories.
RESULTS: Since launching the program in June, Hawthorne's Pizza has been tracking double-digit sales growth, a percentage of which the company attributes to its new digital coupon program.
Always willing to test new marketing tools, Hawthorne's Pizza's Director of Marketing Matthew Vincent was intrigued when he was contacted by Bank of America's (BoA) development team last spring about its new customer cash back deals program. The program, which is managed by Cardlytics, enables merchants to target BoA customers with deals when they log into their online bank account. The deals are customized to customers based on their purchase history.
Here's how the program works: Merchants tailor offers to specific customer segments. In the case of Hawthorne's Pizza, there are three segments: consumers who have never used their BoA card in one of its restaurants; infrequent customers, defined as those who have used their BoA card at Hawthorne's six times or less in the last year; and regular customers, those who have used their BoA card at Hawthorne's more than six times over the past three months to six months. After logging into their online bank account (the service is also available on mobile devices), consumers click on the offers they're interested in. Those offers are then automatically loaded onto their card. They then shop at the participating merchants, with the cash back reward automatically credited to their account. The merchants pay Cardlytics based on the sales lift these offers drive above a statistically valid control group (Cardlytics then pays the banks a small revenue share as well).
The retailers involved in the program don't have to make any changes to their processes (e.g., point-of-sale integration), which was a key selling point for Hawthorne's Pizza. In fact, they don't even know the customers that are being driven to their stores because of the offers; the transaction data never leaves the bank. Retailers participating in the program are only privy to aggregate-level sales and performance data.