Loyal Nation
The topics changed from session to session, but the theme at this year’s Supermarket College conference was consistent: Loyalty marketing should be implemented creatively, aggressively, and effectively – or not at all.
Las Vegas’s 106-degree June heat kept conference attendees warm outdoors, while inside hundreds of grocery marketers from across the nation were hot on discussing ways to improve their frequent-shopper programs.
Simply having a loyalty program isn’t enough anymore, said marketers in attendance. Seventy percent of consumers now have a frequent-shopper card, and nearly 60 percent of households belong to two or more programs, according to ACNielsen, Schaumburg, IL. More than 10,000 U.S. stores run frequent-shopper programs, up nine percent from 1999, reports Retail Systems Consulting, Naples FL. That’s 33 percent of all supermarkets and nearly 40 percent of total sales.
Marketer attendees concurred that grocers need to employ non-traditional thinking to kick-start their programs. Some chains are segmenting loyalty efforts with sub-programs pitched to specific groups of customers. Elizabeth, NJ-based Shop Rite, for example, allows customers to earn Baby Bucks when they buy infant-related products. (The points can be redeemed for additional infant needs.)
Compton, CA-based Ralphs Grocery Co. runs regular sweepstakes that provide entries for Ralphs Club members every time they swipe their cards. A recent campaign gave away trips on American Airlines.
Other retailers are changing their entire marketing structure. For two-store grocer Dorothy Lane Markets, Dayton, OH, sales actually went up when it eliminated all print ads and instead developed a customer newsletter featuring store specials and related food and regional information. The eight-page publication is mailed to Lane’s top 25 percent of customers in several incarnations. (Price discounts are lower for some shoppers than others.)
GETTING TOUCHY, FEELY
When it comes to rewarding loyal customers, “Make sure it’s a tangible reward that stays in people’s minds,” says Al Lees, Jr., president of Lees Market in Westport, MA. Lees offers shoppers cooking and lifestyle classes. The single-store (50,000-sq. ft.) retailer also gives loyal customers access to Pet Palaces, enclosed parking lot areas where patrons can park and feel comfortable leaving Rover in the backseat. The store’s inside boasts children’s activity centers.
Dorothy Lane offers frequent shoppers discounts and deals at dance schools and art stores, which is a little different than the typical video coupons or dry cleaning freebies other grocers distribute. In 1998, Lane invited the top one-third of its customers to a private concert featuring Frankie Avalon, Fabian, and Bobby Rydell.
Foreign supermarkets are doing some interesting things as well, noted several conference speakers. Ireland’s 11-store Superquinn chain forgoes advertising to focus on a point-based SuperClub program offering one point for every pound spent. Points are redeemed for products and services printed in a quarterly catalog. But the program goes beyond typical awards and redemption methods to influence behavior as well as purchase.
For example, Superquinn last month offered double points every Wednesday and triple points during evening hours. SuperClub bonuses can be earned by patronizing 26 program partners including hotels, sporting goods stores, and cable companies. And the chain drives frequency through such bonus offers as 1,000 additional points for five consecutive weekly visits.
“You have to find a differentiating element and rotate everything around it,” says keynoter Brian Woolf, president of Retail Strategy Center, Inc., Greenville, SC. “[Superquinn is] making the points program central to its business.”
Superquinn has worked points into its entire customer-service structure, using them as both quality control and instant-apology tools. Signs around the store encourage shoppers to report “goofs” – any problem they see or experience – to receive 100 points. Upfront signage promises 200 points if customers have to wait too long at checkout.
In all, Superquinn uses the points program in 13 ways. More than 410,000 Irish households are members – representing more than one-fourth of the country’s total – and more than 700,000 cards are in circulation. On average, 12,000 rewards are redeemed each week. (At Christmas, the figure rises to almost 41,000.)
MAKE IT BIG
The two primary goals of card programs should be to increase visits and optimize sales yield, says Woolf. But effective card programs can keep customers loyal when they’re not even in the aisles.
Big Y Supermarket, Springfield, MA, has been called the “Crazy Eddie” of grocery marketing. The chain, which operates 41 stores in the Northeast, incorporates loyalty components into all facets of a “marketing madness” strategy that is central to its branding efforts. The chain earlier this year began rolling out a program in which shoppers earn Big Y-engraved custom coins that can be redeemed for rewards.
The retailer operates a homework help line through which children in grades kindergarten through 12 can call and ask questions that are answered by certified teachers. The service is available 4 p.m. to 7 p.m. Mondays through Thursdays while school is in session.
For the summer break, Big Y developed ties to about 85 local family destinations where customers could show their cards for discounts. The company also ran a co-marketing effort with packaged goods maker Land O’ Lakes giving away trips to stock car races. Another sweeps serves up backyard barbecues.
“Unless you’re committed to making loyalty marketing your religion, forget it,” warns Woolf.
Get on your knees and pray.
