By Dale Wolf
Chances are your grocer offers you a loyalty card. They're everywhere. As near as we can track, the first loyalty program was launched in Dayton, Ohio -- just up the road from where I live. It was launched in October, 1995 by Dorothy Lane Markets.
Basically for members, the more you spend, the more you get. Like frequent flyer miles, they spread into the grocery trade like a wild fire.
And they don't seem to give the grocer much loyalty, and they don't seem to give the consumer much except the discount she would have gotten with "store specials" before the cards became so widespread.
Why then do retailers make the massive effort of databasing customer purchases if all they are doing is passing out price discounts. Sure they have theoretically now steered these discounts to their more profitable shoppers. That's not bad, but it still seems difficult to get the ROI from these expensive-to-administer loyalty programs.
The reason is that too few retailers have put the imagination into the programs to create a more perfect customer experience and to convert their shoppers from discount-seekers to store advocates.
They have failed to use the customer-specific data to tell the consumer she is recognized and uniquely served and personally appreciated.
The data, for example, should tell the retailer that Mrs. Jones has just added a dog to the family, or that Bill and Sue have a newborn infant or that Jack is a single guy who likes to entertain and fix gourmet meals for his friends.
The data should enable fine-grained customer clustering.
There could be a cluster of consumers who regularly purchase milk and bread ... but for four consecutive weeks have not purchased these staples. This cluster should immediately be put on alert as potentially now shopping at a different store. The retailer should instantly launch a "get the customer back" campaign.
The database should be tracking family inventory depletion and reminding (and rewarding) the customer that it is time to restock. The data could be tied to a menu ingredients database and push out some suggested new recipes for using the family staples.
The data could launch personalized pages on the shopper's customized store website.
The website could be further customized with the family's planned vacation so the retailer could notify the family where the nearest store will be at the vacation destination -- along with a reward when they arrive (free movie tickets at the nearest cinema).
Data is there for one purpose. To make the customer experience so positive that every regular customer will become an advocate for the store.
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