In 2025, CPG teams face a retention problem that ad spend can’t fix. This case study shows how one mid-market brand used Inchstone Rewards to reduce churn by improving repeat purchase habits across retail and direct channels. You’ll see the strategy, the setup, the numbers, and the operational lessons—plus what to copy and what to avoid. Ready to learn what actually moved the needle?
CPG churn reduction: The business problem and baseline metrics
The brand in this case study—an established better-for-you snack company sold through major retailers and a growing DTC store—hit a familiar ceiling: customer acquisition remained strong, but repeat purchase rates softened as competition intensified. The team saw churn in two places:
- DTC churn: customers bought once, then lapsed, especially after promo-driven first orders.
- Retail churn: shoppers switched between similar brands during routine trips, driven by price changes and shelf visibility.
Before changing anything, the brand agreed on a shared measurement framework. This mattered because loyalty initiatives often fail when teams report different “wins” (email clicks vs. true repurchase). The group established a baseline across:
- Repeat purchase rate (DTC): percentage of first-time buyers who purchased again within 90 days.
- Time-to-second-purchase: median days between first and second orders.
- Customer churn rate: percentage of customers who did not repurchase within a defined window (the brand used 120 days for DTC and 10–12 weeks for retail panel matching).
- Gross margin impact: incremental discounts, reward costs, and redemption rates.
They also audited how customers experienced the brand: the post-purchase email journey was generic, on-pack messaging did not guide what to do next, and retail shoppers had no reason to identify themselves after buying. Leadership’s goal was clear: lower churn without training customers to wait for discounts.
Customer loyalty program for CPG: Why the brand chose Inchstone Rewards
The team evaluated options including deeper subscription incentives, heavier couponing, and a traditional points program. They chose Inchstone Rewards for three reasons that aligned with CPG realities:
- Behavior-first rewards: Inchstone allowed rewards tied to actions that predict retention—second purchase, product trial, reviewing, referrals—rather than only spend.
- Cross-channel identification: the platform supported receipt-based earning and lightweight identity capture, making retail engagement possible without forcing app downloads.
- Controls for profitability: the brand could set reward caps, restrict redemptions by SKU/category, and offer non-discount perks (early access, bundles, limited drops).
The retention hypothesis was practical: if the brand could (1) shorten time-to-second-purchase and (2) increase multi-SKU trial early, it would lift repeat rates and reduce churn. Inchstone’s rule engine made it easier to test that hypothesis with controlled incentives instead of blanket discounting.
To follow EEAT best practices, the brand documented assumptions, tracked changes in a single dashboard shared with finance, and pre-defined what would count as success: a measurable reduction in churn with stable or improved gross margin contribution per customer cohort.
Rewards strategy design: How Inchstone Rewards mapped incentives to behavior
The brand built a loyalty experience around four customer moments that commonly determine whether a CPG buyer becomes a repeater. The program was intentionally simple: earn, redeem, and level up—without confusing math or hard-to-reach thresholds.
1) The second purchase accelerator
Churn risk was highest after the first order, so the biggest early lever was speed. The program granted a meaningful points bonus if customers made a second purchase within 30 days. For retail, the offer triggered after a verified receipt upload.
2) Multi-SKU trial (“build the pantry”)
Instead of rewarding raw spend, the brand rewarded variety. Customers earned extra points for buying from a second and third product line. This reduced reliance on a single hero SKU and increased the chances the shopper would find a “must-have” item that anchored future baskets.
3) Social proof without fake urgency
Reviews were incentivized with a small points reward, but only after verified purchase and a minimum time delay so customers could actually try the product. This generated higher-quality feedback and lowered return/refund friction for DTC.
4) Referral rewards designed for CPG economics
Referrals offered a modest reward to both parties, but the program only issued the referrer reward after the new customer’s second purchase. That one change improved ROI because it prioritized durable acquisition over one-time deal seekers.
To avoid turning loyalty into perpetual discounting, the brand introduced non-monetary benefits at higher tiers: early access to new flavors, limited-edition bundles, and “members-only” restock notifications. These benefits cost less than discounts and reinforced brand preference.
Finally, the team addressed the most common follow-up question: Will customers actually bother? They reduced friction by embedding loyalty enrollment into post-purchase pages and email confirmations, then reinforced it on-pack with a clear call to action: “Scan or upload your receipt to earn.”
Retail + DTC retention: Implementation, data flow, and operational setup
Execution made the difference. The brand treated Inchstone as a retention system, not a marketing widget. They implemented in three workstreams:
A) Identity and attribution across channels
- DTC: customers were recognized via email and account login; points posted automatically after purchase events.
- Retail: customers earned by uploading receipts. Inchstone validated retailer, date, and qualifying items. Where SKU-level detail wasn’t available, the brand used eligible retailer lists and product-specific bonus codes included on-pack.
B) Lifecycle messaging tied to loyalty milestones
Instead of generic “10% off” emails, the brand built a sequence around behaviors:
- Day 2: “You earned points—here’s how to use them.”
- Day 14: “Try a second line for a bonus.”
- Day 24: “Second purchase bonus ends soon” (no countdown gimmicks, just a clear window).
- Post-redemption: “You’re close to the next tier—here’s what you unlock.”
C) Finance and compliance guardrails
The finance team required predictable exposure. The brand set:
- Monthly reward liability caps (points issued vs. redeemed targets).
- Category-level redemption rules to protect margin on low-margin SKUs.
- Fraud checks for duplicate receipts and suspicious referral patterns.
Because the program involved customer data and receipts, the brand also updated privacy language and clarified how receipt information would be used. This improved trust and reduced customer service escalations.
Churn analytics for loyalty: Results, learnings, and what changed
Over the first two quarters after launch, the brand saw measurable improvements in the specific behaviors they targeted. The leadership team cared most about churn reduction and payback, so results were reviewed by cohort (pre-launch vs. post-launch) and by channel.
Key outcomes
- Lower DTC churn: churn within the 120-day window dropped by 18% in post-launch cohorts, driven primarily by faster second purchases.
- Higher repeat purchase rate: 90-day repeat rate increased by 14% among loyalty-enrolled customers compared with non-enrolled customers in the same period.
- Shorter time-to-second-purchase: median time-to-second-purchase improved by 11 days, aligning with the program’s early-bonus design.
- Retail identification growth: receipt-based enrollments created a new owned audience segment that became the top-performing group for new product launches.
What worked (and why)
First, the second-purchase accelerator delivered because it matched the moment of highest churn risk. It turned “I’ll buy again sometime” into a clear next step with a time-bound incentive. Second, the multi-SKU trial bonus reduced dependence on one item and increased overall satisfaction—customers found more reasons to repurchase.
What didn’t work at first
The brand initially offered a large redemption discount as the default reward. Redemptions spiked, but margin suffered and some customers delayed purchases to redeem. The team corrected course by making experiential perks and product bundles the default, reserving discounts for specific segments (for example, customers approaching lapse).
How the team ensured results were credible
- They compared cohorts before and after launch and monitored mix shifts (so results weren’t attributed to a single promotion).
- They separated enrollment lift from retention lift by tracking behavior changes after enrollment.
- They audited customer service contacts for reward confusion and refined messaging to reduce support load.
The biggest operational learning was that loyalty is a product. The brand assigned an owner responsible for rules, economics, and experiments, rather than treating it as a one-time campaign.
CPG retention best practices: Playbook you can apply with Inchstone Rewards
If you want similar churn reduction, the brand’s playbook can be replicated without copying the exact incentives.
Start with one retention goal and one leading indicator
- Goal: reduce churn in a defined window.
- Indicator: time-to-second-purchase or second-purchase rate.
Use rewards to shape behavior, not to subsidize spend
- Reward second purchase timing, product-line trial, and reviews.
- Keep spend-based points modest to avoid “discount dependence.”
Design for retail reality
- Make receipt upload simple and fast.
- Use on-pack prompts that clearly explain the value exchange.
- Offer a reward that feels immediate (points confirmation) even if redemption comes later.
Protect economics from day one
- Set caps and restrictions before scaling.
- Prefer bundles, early access, and limited perks over broad discounts.
- Delay referral payouts until the referred customer shows repeat intent.
Answer the questions customers ask silently
- “How do I earn?” Show three actions on the landing page, not twelve.
- “Is it worth it?” Display the first redeemable reward threshold and how quickly typical customers reach it.
- “What happens if I buy in-store?” Explain receipt earning in one sentence and link to it from every email.
Done well, Inchstone becomes the system that connects brand preference, data, and repeat purchase—without relying on constant promotions.
FAQs: Inchstone Rewards and lowering churn for CPG brands
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How does Inchstone Rewards help reduce churn for CPG?
It reduces churn by rewarding behaviors that predict repeat purchasing—especially the second purchase, multi-SKU trial, and referrals that convert into repeat customers—while capturing customer identity from both DTC and retail through receipt validation and enrollment flows.
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Does a loyalty program work if most sales are in retail?
Yes, if the program makes retail earning easy (receipt upload or scan) and gives a clear reason to identify. Retail-first CPG programs typically win by turning anonymous shoppers into an owned audience for launches, replenishment reminders, and targeted offers.
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What rewards lower churn without hurting margin?
Bundles, early access, limited editions, member-only restock alerts, and tier benefits often protect margin better than blanket discounts. If you use discounts, reserve them for high-risk churn segments or specific SKUs with sufficient margin.
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How quickly should you expect to see churn improvements?
Many brands see leading indicators move within weeks—like shorter time-to-second-purchase—while churn rate changes typically require a full repurchase window to measure. Define your churn window upfront so results are comparable.
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How do you prevent loyalty fraud with receipt uploads and referrals?
Use duplicate receipt detection, retailer/date validation, limits on daily submissions, and referral rules that pay out only after the referred customer completes a second purchase. Monitor anomalies like repeated high-value receipts or referral clusters tied to one device.
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What should you track to prove Inchstone Rewards is working?
Track churn in a defined window, repeat purchase rate, time-to-second-purchase, redemption rate, reward cost as a percentage of revenue, and cohort-based gross margin contribution. Separate retail and DTC trends, then unify reporting in a single view for leadership.
In 2025, this CPG brand lowered churn by treating loyalty as a retention engine, not a discount channel. Inchstone Rewards worked because it rewarded the actions that lead to repeat purchases, captured retail shoppers through receipts, and protected margin with smart controls. The main takeaway: build incentives around the second purchase and product trial, then measure by cohort and profitability.