The Gap Sprize - New Customer Loyalty Program

Return On Investment Formula Applied to Holiday Shopping

Nov 15, 2009

Shopping on a budget during the holidays can be difficult. Sprize is a customer loyalty rewards program launched by the Gap to help shoppers make the most of their money.

Return on Investment (ROI) is a term typically used by marketing teams to calculate the value and efficiency of a campaign. The rule is simple, if the estimated cost to launch the campaign is greater than the perceived benefits reaped, then it's ultimately not worth it. Knowing that most customers follow a similar logic when it comes to shopping, if the cost of the item is greater than the shopper's perceived value of it then it's just not worth it, the Gap launched the Sprize program to help ease buyer's remorse and give customers a good return on their initial shopping investments.

What is Sprize? Turning Shopping On Its Head!

The Gap's Sprize program is currently open to residents of Canada (excluding Quebec) with the pilot program having recently been launched in Vancouver, British Columbia at 10 Vancouver area Gap stores.

Shoppers can sign up for a free Sprize account at participating Gap stores for an opportunity to collect SprizeMoney. SprizeMoney is automatically accrued in a customer's account when a product they bought goes on sale within 45 days of the original purchase. The account is credited the difference between the price paid and the best sale price.

In a press release issued on November 5th, 2009 Marka Hansen, President of Gap Brand North America, says "We're taking away the frustration and worry over buying a product at full price, and then seeing the price drop soon afterwards." This is especially true for holiday shoppers who are trying to accommodate a tight or strict budget. It is incredibly frustrating to purchase gifts for loved ones at full price knowing that Boxing Day is just around the corner, and all those items are likely to go on sale within the month.

Shoppers needn't feel rushed to make a new purchase immediately after receiving SprizeMoney, the money is redeemable for a period of 1 year. The return on investment strategy comes into play here as well, with buyers being able to use their accrued Sprizemoney from past seasons to fund the latest season's wardrobe.

Customer Loyalty Programs and the Gap's ROI

The Sprize website explains how the program works, and then asks "Are we crazy?" This is surely a question that many Gap shoppers may have asked themselves when hearing about the launch of this program. The true question is, will the Sprize program truly "turn shopping on its head" and create a great ROI for the retailer? Or will this customer incentive ultimately encourage shoppers to spend less, but walk away with more?

This program is likely to be a great success for the Gap, and here's why; the launch of this program represents one of those cleverly marketed customer loyalty programs. The idea being that shoppers will return to the GAP often to see what they can get for their Sprizemoney and undoubtedly pick up a few more purchases than they had intended.

Customer Loyalty and Retention Improves ROI

With the launch of Sprize, the Gap has also created a valuable opportunity to turn a one-time Gap shopper into a returning customer by offering a real, good deal in a time where holiday shoppers are minding their pennies. Since signup is free there is no risk for the customer whatsoever. Thus, Gap will be making a return customer out of any new customer, while keeping loyal customers happy. Not to mention that even if someone isn't a recurring Gap customer, this program offers an opportunity for customers to use Gap stores as their gift-buying destination from the holiday season onwards as the program is also offered at Gap Body, GapKids, and babyGap.

If that isn't enough to turn a cynic into a believer, the Sprize program is also an ingenious way to raise sales on overstock items and clear out this season's stock to make room for next season's. Fewer leftover stock means more purchases overall and that's a terrific ROI for any retailer.

Where is Sprize Available?

Currently the Sprize program is being offered at these Gap stores in Vancouver, British Columbia:

The Future of Sprize

Sprize will not be limited to Vancouver area retail stores. The pilot program launched in Vancouver as a test to see how well it would perform. It is safe to say that any customer rewards program aimed at customer loyalty and retention is bound to succeed. Following the success of the Vancouver launches, the Sprize program will be offered in Gap stores across Canada and throughout the USA. Gap customers worldwide can keep track of Sprize announcements and developments on their Facebook fan page.

The copyright of the article The Gap Sprize - New Customer Loyalty Program in Consumer Education is owned by Melanie Hupert. Permission to republish The Gap Sprize - New Customer Loyalty Program in print or online must be granted by the author in writing.