Many grocers today collect and leverage customer data to build one-to-one relationships with their customers. These one-to-one relationships are developed over time as data is used to provide relevant messages and promotional offers through the customer’s preferred communication channel. The result for the retailer is increased shopper frequency, basket size, and breadth of shop, which lead to improved customer loyalty and increases to sales and profitability.
The basis for leveraging this data is through loyalty programs in which customers identify themselves at the time of transaction to receive discounts or collect points for use toward subsequent purchases. The higher the loyalty program’s participation level (as measured in customers, transactions, and sales), the greater the impact the grocer can have on purchase behavior. In fact, Kroger and Ahold, benefit from over 90% participation rates.
Obvious, right? It is, but it’s not just large-scale retailers that can benefit from loyalty programs.
Questioning traditional enrollment methods
A grocer approached us recently to create a strategic plan for its loyalty marketing. Recognizing the value of high participation rates, the grocer is searching for the most timely and efficient means of enrolling customers in the new program. Traditional enrollment methods involve the customer filling out an enrollment form instore. When the program is launched, enrollment volume will be high and traditional processing slow.
This is the approach we recommended to streamline the enrollment process and have minimal impact on checkout and customer service lines:
- At the close of each transaction, a message would be printed on the receipt that invites customers to enroll in the loyalty program online.
- The message would include a promotional incentive for customers to enroll (save $5 on your next purchase after enrolling, for example).
- The system would generate temporary identification codes for each customer to use when enrolling.
- Customers would then visit the grocer’s loyalty customer portal – a white label application integrated into the grocer’s website – enter their temporary identification code, new username and password, cell phone number, additional contact information, and any other “descriptive” data (demographics, interests, and preferences) that would be useful to the grocer in communicating with its customers one-to-one.
Upon successful enrollment, the promotional offer would be activated immediately. Customers would be reminded of the promotional offer through their preferred channel and instructed to identify themselves the next time they shop by providing their cell phone number at the point of sale.
This approach enables large and mid-sized grocers to process enrollments for new loyalty programs with minimal impact on checkout and customer service lines, as well as avoiding the cost of introducing physical loyalty cards. It also enables the shopper to identify themselves via their cell phone (which many prefer over adding yet another card to their wallet).
As purchase history is accumulated, the grocer then benefits from the platform’s analytics, segmentation, targeting, and campaign management modules to identify, plan, and execute personalized marketing programs designed to increase shopper frequency, basket size, breadth of shop and customer loyalty.
If you found this blog interesting, now read ‘Get Personal: A perspective on marketing in the grocery, convenience, healthcare and pet specialty sectors’