What's the value of being able to convince loyal customers to walk down an aisle of the store where they don't usually go? It's not as easy to measure as ROI, but grocers, specialty retailers and discounters know the challenge well. And if a technology can get them such a return, the investment is certainly worth something. Even for small chains.
Remke Supermarkets, with seven stores in the metropolitan Cincinnati area, does a total of 65,000 transactions every week. It counts more than 80,000 area residents as regular customers, measured by their activity in a Preferred Customer Card loyalty program. Each store averages 45,000 square feet.
In the supermarket business, even loyal customers don't ever put all their eggs in one basket. The trick for Remke is to get them to put more of their dollars in the Preferred Customer Card basket.
"Our aim was to get loyal customers to buy in departments where they don't normally go," says Pat Iasillo, director of customer relationship marketing at Remke Markets Inc. The company launched the PCC program in 1996, linking the card to a direct mail newsletter. Over time Remke learned how to trim the newsletter subscription base to create efficient returns. As of this writing, the circular goes to the top 30 percent of the Remke customer base by spend. Years of working on loyalty have shown that the customers who spend the most are the most likely to spend more through incentives.
Remke's solution was entirely home grown.
Coming up with great marketing ideas wasn't as big a problem as managing the ideas once they were launched. Information coming off the corporate POS was rich, but it took an IT person to fetch it and set it up for analysis beyond name and address. Iasillo says if he needed to find out who purchased laundry detergent in a six-month period, he had to call on IS. And they were usually busy with other things. "We missed many strategic marketing opportunities because we couldn't get our hands on the data," he says.
Iasillo says a foundation had to be built. "The first thing we needed was a good database management program and that proved to be Allegiance from Triversity," he says. "We started sending marketing offers to specific customers. You don't shop deli so we offer you a dollar off at deli and see if that moves you up the aisle." That started two years ago and has proven to be a big lever against one of the biggest enemies of food retail: store hopping. Working with the Allegiance application, Remke has identified shoppers in a variety of ways. For example a light, medium or heavy shopper of a particular brand can be identified by the program. A spreadsheet is made up associating customers with the particular products. The data is then sent to First Marketing Printing in Florida, which prints the Remke newsletter that sends unique offers to each customer. "We bar code the offers so when a customer uses it we know it," says Iasillo.
With the Triversity application in his arsenal, Iasillo hopes to increase the value of the program over the next 18 months. In grocery, he confirms, there's never an area where customers are perfectly loyal. For instance half of the top 30 percent of the shoppers at Remke don't buy detergent there.
With a Masters in business from Xavier University in Ohio, he has been with the company for more than two decades. He has worked in a variety of industries, and in his off-hours has played in barbershop quartets. "You develop a sense of where your best bets are over the years, what songs strike a familiar chord with the audience," Iasillo says. "And you can sense that same thing with customers."
But it isn't only art. Remke focuses on the top 30 percent of its customers to keep promotional costs down. Historically and logically they are the ones most likely to respond to a marketing campaign. Each week, Remke sends out a mailing through a "door store" operation that costs 3.5 cents per newsletter to deliver. "Allegiance is a simple tool that lets me ask for everyone who lives in a zipcode and carrier code," Iasillo says. "I can add a dimension and get very rich information. So, if our best customers index high on a slow mover, I don't take it off the shelf."
To get the highest return on marketing Iasillo says the data has to be integrated. One new tool in the Triversity bag of tricks -- Promo Coach -- helps achieve that goal. "Promo Coach looks at the whole picture," says Iasillo. "Normally if I wanted to promote a refrigerated gel snack, I would simply look at who buys refrigerated gel snacks. That's a narrow audience. With Promo Coach I look across a market basket and measure everything in the basket. I look at who buys the gel snack, what else they have in the basket and then go to the other people who buy those other things."
Remke, one of the industry's premier marketers of neighborhood grocery, is now adding pharmacies to its stores. Getting to know their customers so well has taught them that there are new businesses to bring into the store. With Kroger and other major grocers in their backyard, they have to pull out all the stops to compete.
"Kroger can do full page ads, advertise on TV and run on the radio," Iasillo says. "We have to find smarter ways to market. I feel sorry for Kroger. They have to market against Wal-Mart."
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