Archive for CRM

Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

Resource: Daily News

Walgreens Drives Customer Engagement through Personalized Marketing

By: Jim Tierney, Loyalty360   BACK TO RESULTS

Walgreens has a powerful loyalty program, Balance Rewards, which has a membership hovering around 130 million.Reaching that lofty status, from a membership perspective, didn’t happen over night.  Mindy Heintskill, Senior Director of Loyalty and Vendor Collaboration, Walgreens told attendees during her Tuesday session, “Driving Customer Engagement and Sales Growth through Personalized Marketing,” at the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, that she started at the company around the time the Balance Rewards loyalty program launched in September 2012.“We’re getting great engagement in the loyalty program,” Heintskill said.

Why did Walgreens start Balance Rewards?  “We wanted to thank our customers and gain customer knowledge and customer behavioral data,” Heintskill said. “It’s important for us to focus on retaining best customers. Data is very important. Walgreens doesn’t make any assortment decisions without looking at customer data. We had the opportunity to be more personalized. We have a commitment to testing. What we’re doing now is very traditional. We have all kinds of tests going on through different forms and different channels. You can’t be customer-centric on your own.”

Source: Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

 

MH-Comments.  The headline is somewhat buried in this article.  Ms. Heintskill is not only responsible for shopper loyalty, but also “vendor collaboration”.  Too many retailers have not transitioned their vendor partnerships from pure trade support to actually providing targeted content for their loyalty programs.  

This commitment by Walgreens is significant and will bode well for the continued success of their program.

Mobile, Mobile, Mobile

During a recent panel discussion* on the topic of digital coupons, I asked Ajay Amlani, General Manager and Founder of You Technology what his three top areas of priority in terms of increasing the efficacy and volume of digital coupons and content in the coming year.

His answer, without hesitation was adamantly

Mobile, Mobile and Mobile!

He went on to assert that the overwhelming penetration of smart phone ownership and increasing usage during the shopping journey should be enough provocation for anyone with a proactive marketing strategy to include a healthy dose of budget towards reaching shoppers via their mobile device somewhere within their shopping process.
 

Devising a cogent mobile strategy presents an array of choices mobileandtraditionaland complexities that are unknowns to even some of the most experienced marketers. Arguably, before retailers and brands get into specifics on mobile (smart phone) marketing, it should dovetail into a more traditional, comprehensive marketing strategy and a broader Omni-Channel Strategy as the neighboring graphic depicts.
 

While retailers are becoming increasing more comfortable with budgeting and executing Omni-Channel initiatives they are often done as tests or ad hoc. In turn these forays into new media are not strategically linked with more traditional merchandising and marketing programs.
 

So is it the case with Mobile Marketing. The following are quick points of consideration when building a mobile strategy.
 

  • A good place to start the process is to view mobile as a distinct medium to the shopper with the same stature of print, television, radio and outdoor. With an increasing number of shoppers using their smart phones to access circulars, deals, coupons, comparative pricing, and product availability, mobile deserves its own line item in the budget.
  • Secondly, gain an understanding of what is different about mobile vis-à-vis the other forms of communication. Establish the measurable elements associated with mobile and determine accordingly how success is measured. Clicks, Views, Open Rates and other new metrics are vital to understanding the basic level of engagement. If mobile marketing employs SMS texting,  email blasts or banner web advertising, benchmark successful engagement metrics in each of those elements. Be knowledgeable of what constitutes best of breed performance among your key competitors and retail channel.
  • Additionally, keep in mind that of all the Omni-Channel media, mobile is clearly the most pervasive as can serve as a connective tool to all the other facets of a marketing program or campaign. Consequently be prepared to measure impact of mobile communicated programs on sales, customer count, transaction size, category penetration and other traditional metrics. Without eventually correlating the impact of mobile programs with the metrics share holders and senior management value, even successful mobile programs can go unappreciated.
  • Finally, I think it wise to use mobile engagement as a means to better understand your shopper base. With each mobile engagement, be positioned to use the results of the engagement as a means to segment your shoppers. Knowing which shoppers and shopper profiles display a high propensity to engage via mobile is extremely valuable information as plans are made for future mobile outreach.

* From Panel Discussion at the Association for Coupon Professionals Conference, April 16, 2015 in San Antonio, TX

Price Chopper Launches New Coupon/Loyalty Program …from Loyalty360.org

Price Chopper Launches New Coupon/Loyalty Program

By: Jim Tierney, Loyalty360

BACK TO RESULTS

Price Chopper’s new coupon/loyalty program launched as a result of matching customer expectations, according to Glen Bradley, Vice President Marketing Analytics, Price Chopper Supermarkets.The chain operates 135 stores in New York, Massachusetts, Vermont, Connecticut, Pennsylvania, and New Hampshire and is fueled by an extended family of more than 22,000 teammates who collectively own more than 47% of the company’s privately held stock, making it one of the nation’s largest privately held corporations that is predominantly employee-owned.

Customer engagement and brand loyalty are two guiding lights at Price Chopper.Bradley said Price Chopper launched its original AdvantEdge E-coupon program to meet the needs of its customers “who are always looking for new ways to save money on groceries.  Google Zavers, who had provided back end support for our e-coupon program notified us in mid-2014 that they would be exiting the business. We took this opportunity to redesign our program with our new partner, Inmar, so that we can provide a new and improved program with enhanced features for our customers.”Bradley explained that the AdvantEdge e-coupon program allows customers to load digital coupons to their AdvantEdge loyalty cards and redeem coupons without the hassle of handling paper.

Previously, shoppers could only digitally load up to 99 coupons on their AdvantEdge card at a time, but the new program through Inmar allows more.  Customers now have access to over 150 digital coupons and can also use the Price Chopper website to search for products and will see corresponding offers for favorite products.“We have an extensive list of coupons on both national brand and our own Price Chopper brand products available in an easy-to-use interface on both PriceChopper.com and our Price Chopper Apps for iPhone and Android,” Bradley said. “We will be adding new features soon- things that were not possible with our previous technology partner.

Price Chopper plans to rename its 135 stores Market 32.“The AdvantEdge e-coupon program fits perfectly into our branding initiative as we seek to provide exceptional value to our customers through technology and service,” Bradley said.

Source: Price Chopper Launches New Coupon/Loyalty Program | Loyalty360.org

 

It is the retailer who will bring relevance and content to these new digital coupon programs.  Without their offers, in-store support and integration with other marketing and merchandising programs, digital coupons will remain a very small portion of the overall number of coupons redeemed in the marketplace.  Congrats to Price Chopper, (Market32) for taking the bull by the horns!  

Mark Heckman

Can Loyalty Marketing Finally Fulfill Its Promise?

It has been well over twenty years since the first “electronic” card based loyalty programs entered the retail scene. Supermarkets led the way, given their propensity to offer coupons and deals, coupled with seeing their customers more once a week. Loyalty programs seemed to be a good fit for their business model. Furthermore, most supermarket retailers understood that about 20% of their shoppers were delivering about 80% of their sales. For many, it made good economic sense to focus on building further rapport with the most valuable shoppers and promote less often or differently to those outside that group.

From the early fanfare of these programs, it wasn’t long before the reality set in. Retailers discovered that creating a separate marketing strategy with offer banks full of meaningful, special deals for targeted shoppers was problematic. With the limited technology of the day, it was often too expensive to target shoppers. CPG brands, while appreciating the concept of targeting, were of little help with content given they often held different targeting objectives than their retail customers.

 

firehose1For those and other reasons most card-marketing retailers, quickly gave up on building relationships with their top shoppers despite having mounds of customer data to smartly do so. Frustrated and mired in the day-to-day struggle for “comp sales” and gross margin growth, they simply reverted to using the card as a new prerequisite for shoppers to get the deals they were already getting before the program launched.

Shoppers for the most part played along. However, over time these programs became very milquetoast and provided little or no point of advantage for retailers. With rare exceptions, the early promise of loyalty marketing went unfulfilled. Consequently, a number of good retailers have abandoned their programs, while other successful retailers felt vindicated by staying away from electronic card marketing.

Fast forward to present day.

Shopping technology is exploding. Shopping Apps are abundant. Some would even argue apps are too abundant and present so many options and functions that shoppers are overwhelmed with choice. Apps with “geo-fencing” capabilities like Shop Kick (www.shopkick) and Ping4 (www.ping4.com) alert shoppers when they are in geographic proximity of the store. Still other Apps, like Aisle 411 (www.aisle411.com) use iBeacon® or similar technology to sense the shopper is in a particular area or standing in front of a certain display in the store. Still, others are focusing on the collection of deals across many stores. Couple that with every major retailer having their own proprietary app, each with their own version of loyalty points or rewards.

New technology adaptation is also changing the shopper and their expectations. Upwards of seventy percent of shoppers now carry a smart phone with them while they shop. Some are even using it to help them find items, download coupons and explore nutritional content. On an increasing basis, shoppers are deciding where they shop based upon the presence of shopping technology. Said another way, retailers must innovate and adapt popular technologies or risk losing market share and shopper relevance.

Techno-Loyalty is here to stay.

Pad-signal copyIn my view, loyalty programs must be communicated and executed through technology to remain relevant. Shoppers want automation, simplicity and consolidation of the many offers and rewards from each retailer, both on-line and in the physical store. Consequently, while loyalty cards live on, they are gradually giving way to shopping apps, wireless chips and other technologies that identify the shopper both on-line and in the store.

Further, options are emerging for shoppers to manage their own loyalty. Shopping sites such as Retail-Me-Not, (www.retailmenot.com) , All You, (www.allyou.com) , Savings.com (www.savings.com) and a host of others have aggregated offers from multiple retailers for the shopper to access in one consolidated place. While these sites are growing in popularity they often lack full retailer participation, meaning they work independently from the retailer’s own website or shopping app. This separation often requires the savvy shopper to visit both websites to insure they have the complete offering from each retailer.

In an effort to create the ultimate level of consolidation, solutions like LOC Loc Card(www.locenterprisesllc.com) enlists the retailers to participate both in-store and on-line to extend the reach of their current loyalty program, by creating a consolidated on-line “shopping mall” where shoppers can access the full compliment of their favorite retailer’s offers and rewards, on one website. In-store, the LOC card or app either replaces or augments the retailer’s own mechanism of shopper identification.   Shoppers naturally love the idea, while retailers, who are deeply vested in their own websites apps, appear to be gradually understanding shoppers will ultimate dictate the manner and place in which they interface with the retailer.

Looking Forward, the Retailer Must Take a Holistic View of the Shopper

The future is now defined as “next week or next month”, not “next year or the next five years”. The rapid development of shopping technology has accelerated the shopper’s expectations and has put the onus directly on retailers to elevate their loyalty game. The first step in that process is to first acknowledgement that each retailer, no matter how big, is just one piece of the shopper’s loyalty environment, not the alpha and the omega of the shopper’s needs as many have viewed it in the past.

Concurrently, technology companies understand that working with (not around) the retailer is optimal, as it provides the most holistic shopper solution. On the other hand, if retailers remain guarded and over protective of their programs ignoring the increasingly loud voices of their customers to become more holistic in their approach to building relationships, even their best efforts of offering stand-alone loyalty will miss the mark with the shopper.

After two decades of struggle, technology has finally arrived to deliver on the promised returns of loyalty marketing. It is now up to the retailer to either embrace a new model of holistic, technology-based loyalty or run the risk of being rendered irrelevant, even to their most loyal shoppers.

 

Three Key Messages from Savvy Shoppers

 

changesBy Travis Lewis…………

This year’s Inmar Forum brought a host of top speakers to Winston-Salem, including Andreas Weigend (formerly

the chief data scientist at Amazon), Peter Fader from the Wharton School, John Phillips with PepsiCo, Matt Gymer

of Novant Health and many, many others. But as insightful and informative as these and the other expert presenters

were, the most impactful sharing at the conference may have come from the eight “everyday folks” who

participated in a panel discussion exploring shopper attitudes toward promotions, the in-store experience and the

retailers and brands trying to engage with them.

The collective commentary from the panelists was candid, at times colorful and very, very telling. Here are some the key messages we heard from this diverse group of consumers:

Technology is critical to shoppers’ efforts, but traditional sources have not been abandoned.

The panel members, who ranged in age from 19 to 71, all spoke to their use of the internet to search for product information and availability, make price comparisons and find coupons and other savings opportunities. A multi-source search for savings was common practice among the Forum panelists who spoke of using retailer and manufacturer websites, apps and coupon blogs when looking for coupons and discount opportunities. However, while smartphones and apps were the preference of some consumers, newspapers, Sunday circulars and direct mail were all acknowledged as having real value and a definite place in the pre-trip planning process.

Engagement must be relevant, genuinely facilitate the shopping effort and deliver real value.

The collective message from this group of cost-conscious, self-described “savvy shoppers” was that outreach from marketers had to align with their demonstrated wants and needs. Random or “hard sell” techniques were not effective in moving them to trial or purchase. If they had an interest, the panelists would voluntarily engage with a retailer or brand – but, with the expectation that the “return engagement” would deliver information and offers of immediate, obvious value.

Social media also plays a part in the panelists’ shopping experience, as several in the group expressed a willingness to “like” a product or brand on Facebook in order to receive promotions. Twitter posts were also identified as influential, but more so when broadcast as informative enticements rather than direct advertisements.

Quality customer service trumps convenience in building shopper loyalty and driving repeat business.

Whatever their particular level of engagement, the panelists were consistent in their expectations of quality service – both in-store and online. Ready availability of product information, easily accessible and personally delivered offers, direct and prompt customer service, assurance of product quality and ease of return where all cited as reasons the panelists remained loyal to both retailers and brands.

The panelists also said that they would travel further to those retailers who provided superior customer service, especially when it came to retail pharmacy. Those panelists speaking to their experience in this area voiced that personal attention, close consultation with the pharmacist and the availability of information relative to medication and patient care were the primary decision drivers – having much greater influence than either cost or convenience.

While the panel did not comprise a scientific sampling, the comments from the group did represent, as our Chairman and CEO David Mounts said, “first-person verification” of previous research by Inmar Analytics showing increased use of technology by shoppers along the path to purchase as well as the desire among shoppers for more personal, relevant engagement from retailers (grocery stores, pharmacies and mass merchandisers) and brands (both food and non-food CPGs).

Hearing directly from end-users has always been a particularly powerful information-gathering experience. It’s a reminder that there is always something more to be learned from – and about – the customer.

Travis Lewis is President of Inmar Promotion Network. More information: www.inmar.com.

via Home.

Many Consumers Say Marketers’ Mobile Alerts Aren’t Useful or Relevant

Many Consumers Say Marketers’ Mobile Alerts Aren’t Useful or Relevant.

When technology outpaces content and strategy, alerts and other automated consumer messages can become more of a negative distraction, than a positive disruption.

Think before you hit “send” is an acxiom from which we can all benefit!

 

So Many Retailers, So Little Time……

 

Like many of you, I have become a very accomplished “speed deleter” of un-targeted and irrelevant retailer email.  I believe my record is a hundred and seven deleted emails in twenty-five seconds.  Too lazy to actually unsubscribe to the author of the email, I rationalize staying connected by believing that they may actually send me something of value someday.  I wait.

En mass “email speed deletion” may be this consumer’s way of cutting a an email marketer off in mid sentence, but with more merchants doing un-targeted email blasts, the lower the open rates will become for everyone. While email has become a preferred alternative of more expensive direct mail, its efficiency is waning as more join the fray.

Alternatives are emerging.  Blogger-fed websites and the more established coupon distribution sites are beginning to build a following with shoppers who seek deals and content as they plan their next shopping trip.  These sites have a distinct advantage over the email distribution method.  First and foremost the shopper is motivated to come to the site, looking for deals.  The more relevant the offers and the retailer’s are to the shopper, the better the traffic and the results will be for that site.

All You, Retail-Me-Not and Savings.com are three such sites that are gaining traction by creating enough content from enough retailers to make the visit to the site worthwhile for the shopper.

They are on the right track.  

However, they still suffer from being disconnected from the total shopping experience.  Many of these sites have mere passive relationships with the retailer content they post on the site.  While coupon codes, shopping lists and circular content are available, a shopper cannot fully engage with each retailer by checking on their point totals for continuity programs, or drill down into their loyalty clubs and personal preferences.  For that content, the shopper must go back to the retailer’s own site in turn making the shopper’s life more complicated, not less.

One answer appears to lie in the creation of comprehensive central content aggregation site, one in which the list of participating retailers satisfy key requisites for shopper-centric loyalty.  I see them as follows:

1. Content: The retailers must understand the enhanced reach they will receive by “actively” posting both targeted and mass content on an additional central shopper/loyalty site for shoppers and use the site as a means to allow full integration into points, personal profiles, and past performance. While they maintain their own sites, this new central site provides the shopper a new, additional option for engaging the retailer.

2.  Community: This central site must represent the major players in each of the Shopping Communities built, meaning one or more major supermarket, mass retailer, chain drug, sporting goods, home improvement, electronic superstore, and an array of smaller complimenting loyalty retailers.  Consumer Research tell us that Shoppers wildly support the concept of a single site with overwhelming numbers of intended engagement if such thing every existed.

3.  Consistency:  This central site must strive to grow its community of retailers in both number and volume of content, by promoting a dialogue with its shoppers and retailers, meeting their evolving needs. Shoppers and the components of loyalty are extremely dynamic and if retailers are going to actively participate, they must see the platform as one of consistent growth and progressive thinking.

4. Centricity:  Big retailers will not engage any new commonly-shared platform with other retailers unless the central site and its engagement platform embrace the importance of maintaining the retailer’s control of their brand equities and their shopper database.  Both are table stakes for participation. Attempting to lure big retailers to the site without recognizing their requirements and strategies, will not succeed, no matter how loud the clambering from the shopper.

Final Thoughts on the Subject

Creating a comprehensive, central shopping/loyalty site will not happen without investment in both systems and strategy.  Actively sharing content from multiple retailers ultimately means a Single Shopper ID for each shopper that links to shopper back to each of the retailers on the site.  “Innovators” are in the marketplace and focused on just this concept.  Like many “Big Ideas”, a comprehensive central shopping/loyalty site is much easier to image than to execute, but if memory serves me correctly, I believe that’s what some said about scanning UPC Codes back in the seventies!!

 

mh

 

 

 

 

 

 

Do Our Customers Value Our Current Loyalty Programs as Much as We Do?

Loyalty Programs – Walk in Your Customer’s Shoes

Pre-posted with Permission by author, Jack Kennamer

March 2014

When it comes to loyalty programs, we know what we love and what we’d change if we could.  We love the deals, offers, and rewards. What we hate is being aked for personal information, filling out registration forms, having to go to websites and create yet another account.Juggling shopper

We know what it feels like giving a complete stranger our e-mail, phone number, address and more; or being asked to recite this sensitive information in front of a line of complete strangers. All of this hassle just to receive yet another loyalty card to add to our ever-growing stack or adding another mobile app we’ll probably never use more than once. We have all been there, and most the time we just say “no thanks”.

If, by some chance we do sign up, we are then faced with the aftermath of joining…e-mails, tons of them, day and night with no rhyme or reason.

For those of us in the retail business, as soon as we leave work we become a customer with the merchants we shop.  We all deal with these exact same issues day in and day out. I don’t think we’d find a consumer out there that loves the current “linear” loyalty system of today.  Just Ask. So, why not make it as easy as possible for consumers to enroll and participate?

What if we, as consumers could go into any merchant offering a loyalty program and enroll with the swipe of a single card, or the scan of a single app?  Just one! Not a deck of loyalty cards or a smartphone full of apps. Would that make us more likely to participate? No forms, no personal questions, no websites to hunt for to enroll in, just a single swipe! Of course it would!

And what if we, as a consumer, knew that our personal information was safe and secure, wouldn’t that make it easier and safer and less of a concern to join a merchant’s loyalty program?  We all know the answer – it is an emphatic YES!

What if we knew that our e-mail box was not going to explode when we joined and offers would come to us in way that makes them useable and specific to who we are? Would that make it easier to join?  Of course it would!

Amazon “Prime”….a “Prime” Example for Others?

Shopper loyalty is being redefined everyday.  New mobile applications and other new shopper touch points are raising shopper expectations and also raising the bar on what it takes to secure some semblance of loyalty from an empowered shopper.  With that challenge as a backdrop, the value proposition of many of the long-standing loyalty programs are becoming insipid and less engaging as time wears on and the number of cards shoppers carry increase.

One infrequent, but yet interesting approach to adding some punch to lackluster loyalty programs involves the creation of a “pay for benefit” club that is a “premium tier” of loyalty.  Not an unheard of concept, especially to those of us that shop Costco or Sam’s Club.  But in the context of most retailer’s loyalty programs, paying for benefits remains a rare occurrence.

It should be obvious to all that the key to being able to charge the shopper for any service or commodity is to create a viable value proposition.  Consequently, if retailers are considering a “premium tier” to their loyalty program, a commitment needs to be made in terms of investment into incremental benefits that are worthwhile to the shopper to warrant a fee.

Not a complicated concept.  So why aren’t many retailers pursuing this strategy?

BigYSilverSavingsClubLet’s start first with examining a few retailers that have ventured into premium, fee-based tier of  their loyalty program.   New England supermarket chain, Big Y and Amazon are two retailers that have explored this concept with some success.

Big Y stepped out a few years ago with one of the very few pay for benefit cards in the traditional supermarkets space.  For a $20 annual fee, Silver Savings Club members receive benefits such as;

 

 

The “Silver Savings Club” has endured. I interpret that as it must being providing both Big Y and its members value. Sams, Costco and other pay-for-benefit clubs have proved that the model works.  But we have not seen many of the other major retailers offer a pay-per-view upgrade edition of their loyalty programs.   Often the problem lies in the potential investment the retailer must offer to warrant a $25-$100 annual subscription fee.  My guess is that many retailers are not ready to make that commitment, nor invest in the human resources to management an elite loyalty program.

amazon prime2The Amazon.com model, adroitly named  “Amazon Prime” offers free two-day shipping, free movies, and eBooks as their major features for a $79 annual fee.  Early reviews are positive.  The premise makes good business sense.  By providing an upgrade for moderate to heavy Amazon users, the “Prime”  shopper feels vested in the process with their annual fee.  The return on investment is easy for the shopper to calculate and for those that find the Amazon Prime benefits appealing the investment is a good one.

 

I believe Big Y and Amazon have paved the way for “fast followers” to launch their own elite programs.  While it requires thought, investment, and on-going commitment, such programs can provide retailers a much needed boast in their loyalty program participation.  Done correctly, the subscription fee coupled with the incremental revenue generated from this “elite engagement” should self-fund the effort, but more importantly prove to be a solid step forward for retailers looking for “new news” for their programs that need a shot in the arm….or other extremities!

 

mh

 

Building Loyalty at Kroger …with Digital Overlays

I love the “digital overlay” concept.  It makes so much sense to me to drive digital coupon adaption by linking these new savings options with more traditional promotions.  It is not a surprise to me that Kroger is leading the way, employing brands and promotions with these digital overlays.  Details below;

“ConAgra has also effectively employed programs with digital overlays. For example, a January 2013 meal-solutions program sent an email blast to Kroger’s loyalty card shoppers with load-to-card coupons and incorporated a customized landing page at ReadySetEat.com. “Growing business with Kroger’s loyal shoppers is our priority too,” says Yurovski. “The programs that focus on loyal Kroger shoppers and our brand shoppers return higher ROI than those that target the competition’s [shoppers].”In each of these efforts, Kroger relied on its email database from global market research firm dunnhumby the retailer owns half of dunnhumby USA to identify and reward Kroger’s most loyal shoppers. The company’s ongoing partnership with Kroger has long set the industry standard for effective targeted marketing. “Over the past few years, dunnhumby has raised the bar with increased emphasis on post-program analysis, including following the shopper’s purchase behavior beyond a single mailer and introducing targeted digital communications,” says Catapult’s Cross.”

via Retail Intimacy, Part 3: Building Loyalty at Kroger | Path to Purchase Institute, the leaders in shopper marketing.

The Death of Big Paper…or Not?

Safeway’s CEO, Steve Burd touted just last week that their new and expanded CRM program “Just for U” is now reaching  55% of Safeway’s shopper base and doing extremely well.  So well, he claims that perhaps, just perhaps by the end of this year, Safeway could actually stop printing a weekly circular and rely solely on the reach of “Just for U” to communicate its marketing programs and offers.  It begs the question, “Are finally starting to see the “end days” of Big Paper”?

Weekly CircularsI refer to the weekly circular and the FSI as “Big Paper”  due to the fact paper and printing comprised almost half of my entire annual advertising budget as a retail marketing and advertising VP.  Image the savings or better yet, the re-purposing of these resources if we could eliminate the weekly circular?   But I’ve heard all of this before.  In fact pundits and prognosticators have long predicted the demise of the dreaded, inefficient weekly circular ad.

So what’s different this time.  True, Safeway and their key competitor, Kroger seem to be on track to transition much of their promotional marketing content away from mass and to targeted, digital media.  That’s significant and new.  What is not new is that the rest of the playing field is either invested in EDLP programs, without access to a customer database, or is just too small to command the necessary brand content away from their the broad reach of their mass programs to the much smaller reach of their fledgling digital properties.   In addition, Valassis and News America are in no hurry to stop their FSI presses.  FSI’s are proverbial cash cows and they will not go down without a fight.

Then there is the issue of targeting.  Aside from the costs savings of communicating digital versus paper, the most compelling reason to go digital is the ability to fluidly target and vary both content and pricing all the way down to the individual shopper.  But to be able to effectively accomplish targeting, retailers need to address some very formidable obstacles which include;

1.  Flexible targeting & modeling software capable of  working fluidly across retail channels and customer touch points to include, email, social, POS, SMS, and proprietary Applications.

2.  Intellectual property to effectively build targeting strategies that almost necessarily will involve CPG brands and their strategies.

3.  A huge offer bank of content as best of class targeting infers that not everyone will see all the offers, just those relevant to them.

4. Highly active and updated email, SMS, and Social Media customer lists.

5.  Connectivity between the targeted, digital communications and in-store messaging and signage.  The majority of purchase decisions are still made in-store and close to the shelf and brands still covet the brand equity afforded them by traditional paper media. Digital needs this support to be truly effective.

Kroger and Safeway proudly tout they have accomplished much of the aforementioned list. For them, the death of Big Paper may be on the horizon.  For many other retailers, much work is left to do before the Rain Forests are saved and the printing presses grind to a final stop.

 

Giant Eagle Ends Foodperks and Adds Gas Discount | Retail & Financial content from Supermarket News

Giant Eagle Ends Foodperks and Adds Gas Discount | Retail & Financial content from Supermarket News.

There is an important take-away for every retailer who engages in continuity and loyalty programs.  Even the best programs have a shelf-life.  Over time, even the most effective consumer offerings can lose their punch and appeal to the shopper.  Moreover, their existence over a period of time, becomes more of an entitlement than a benefit, thus producing increasing costs for the retailer without the benefit of the necessary incremental behavior needed to create a positive ROI.

Before starting any campaign or program, have an exit strategy that provides a smooth way of ending or changing the program without alienating the shoppers who have participated.

 

 

How Much are Your Customers Really Worth?

Much as been written about the monetary value of each customer.  What are they worth and how much should I invest in each one to retain them and grow their share of requirements are logical follow up questions to be answered.  Theories and white papers have chronicled some very compelling reasons to understand “customer value”.   But despite these revelations,  many retailers simply do not measure their business by individual shopper metrics, but rather the more traditional sales, customer count and aggregate profitability.   So when you ask one of these retailers how much their customers, and more specifically, their best customers are worth to their business, you get a blank stare.

I agree that ultimately customer value metrics must be linked to the more traditional metrics of accountants rely on to measure the business.  Wall Street is not going to change their yardsticks of success overnight.  But it is also no accident that retailer leaders like Dave Dillon of Kroger and Steven Burd of Safeway are quick to credit their customer relationship initiatives as the single most important driver of their financial success.  One must assume that leaders with their level of business acumen are not just guessing about the nexus between traditional metrics and customer-specific metrics.  What do they know that others do not?

  • First, they likely know what the value of each of the key shopper segments represents to their business.  With their massive databases loaded with customer shopping history, they know precisely what each key shopper segment brings to their enterprise and how important the retention of these shoppers is to a vibrate business.  There are a number of techniques to calculate the value of the shopper, but at its most rudimentary level, annualizing the amount of spending and resulting profit each shopper segment represents is a great start.
  • Secondly, because of their ability to understand the value of the shopper, it is not difficult to extrapolate this “monetization” to the capital assets necessary to deliver the necessary targeting and content needed to maintain or improve upon shopper value.  With this approach, capital investments can be made in the context of cogent ROI models, putting smiles on the faces of both marketers and accountants.
  • And finally, armed with shopper value data, these retailers can and have made intelligent decisions on the best and most efficient way to spend limited marketing dollars.  As retailers advance their shopper evaluation process we are beginning to see fewer dollars spent on mass communications such as weekly circulars, television and radio, and more dollars being focused on targeted media such as SMS texting, email programs, and periodic direct mail.
While there is nothing new or truly exciting about any of the aforementioned steps, other than it all begins with understanding the value of each customer that comes through the retailer’s door or logs on to the retailer’s website.  Despite good progress, still, far too few retailers are unable to answer the question, “How much are my customers worth?”

 

 

 

 

Operation “Wallet Recovery”

I’ve heard it said many times by more than one supermarket retailer that they believe they have a very loyal shopper following.  Many of these same retailers are shocked when they discover that they are only supplying about half of these shopper’s grocery needs.  In fact, I have tracked the “wallet share” of several retailers with strong “loyalty” programs  only to watch a precipitous drop in their share of shopper requirements over the past five years, especially among their very best shoppers.

Yes, despite the best efforts of some very good retailers, they are losing their grip on their best shoppers. Certainly some this attrition is unavoidable.  New competitors  from other retailer channels are taking a bite out of the supermarket pie.  On-line retailers, Amazon for sure, are now selling shelf stable center store products on-line to a growing audience.  Big boxes and specialty retailers are taking significant share on both the “price” and the “fresh” pieces of the business.  Finally, with the lingering recessionary environment, shoppers have drastically expanded their “consideration set” for all their sources of grocery items as they have adapted a renewed “cost-containment” mentality.

Yet, growing the business for many supermarket chains is still possible, all the bleak aforementioned realities withstanding.  However, to be successful at winning back lost shopper share requires a plan that should include the following steps;

  • The first step in operation “wallet recovery” is understanding where the leaks are occurring and how big they actually are.  Both primary and secondary research will be needed in this step, but basic stuff, nothing terribly sophisticated needed to create this learning.
  • The second step is developing a strategy to recover this lost business, given the limited resources you have to do so.  This means not chasing every shopper, every dollar in every category.  It requires customer data, analysis and actionable strategies.
  •  Thirdly, the retailer must understand that winning back their shoppers share of wallet is an ongoing, never-ending process that must optimize limited resources and involve merchandising, marketing, merchandising and even human resources.  Consequently, great focus and commitment is required.

Customer loyalty is not dead, but it has changed.  It more elusive and less sustainable.  Successful loyalty marketing now requires new strategies and a focused, committed approach.  More to come on this topic.

 

 

 

 

Brand Equity Begins and Ends with Your Associates

Bricks and Mortar companies that spend millions on consumer research and multi-millions on in-store technology are wasting much of those capital assets if they first do not invest in human capital.

Yes that’s right.  Just when you think kiosks and self-checkouts are sub-planting the need for human beings in retail store fronts across the nation,  don’t forget that many of your customers still value human interaction.  Somehow, someway, these attention-starved customers will find one of your employees to talk to, even though locating them is becoming as rare as a sighting a Republican in Massachusetts.

Despite wave after wave of new technology, digital customer touch points, and e-commerce, your sales associates are still in charge of your brand’s image.  

Their demeanor, their ability to solve the customer’s problems, and the speed in which they do so, still means more to most customers than all the shopping apps and digital signs you can offer them.  Oh, and by the way, when the technology doesn’t work, it is the sales associate who must either fix the technology or work around it.

Further evidence of my contention abounds.  Note today that the corporate title of “Customer Experience” is beginning to work its way into the corporate organizational charts.  I would suppose the title implies this individual’s performance is measured in standard metrics such as customer satisfaction, repeat visits, willingness to recommend, etc.  So if customer experience has emerged as a significant C-suite role, there must be a connection to sales performance, one that should supersede the continuous quest to trim labor expense out of said customer experience.  Speaking from years of in-store management experience, the biggest single asset or detriment to the “customer experience” is the performance of your in-store associates.

Conversley, you will not get an argument from me that there are labor savings and efficiencies to be had in most any retail operation.  However, when associate training, benefits, hours, and full-time status are continually slashed to “remain competitive”, there is a real risk of also slashing your customer’s reason for coming back to your store with the same knife. In today’s technology driven environment, where there is often little to separate one retailer from the next on product, price, and place, it is human capital, ironically, that can emerge as a real strategic asset, if it is regarded as such.

If retailers consider training, associate incentives, recognition, and the resulting “customer experience” an investment in competitive advantage, perhaps it will be viewed in a different light the next time budget cuts are mandated.  Remember, your associates  may be one of the last important attributes of your business you can truly own!