March 21, 2007
Custom Tailored Coupons
Consumers can now walk into one of 115 Price Chopper stores in six states and receive up to eight coupons based on their personal shopping habits by simply inserting the chain’s rewards card into an iSaveToday machine.
“Providing our customers with valuable, targeted offers at the simple scan of their Price Chopper AdvantEdge Card adds unique incremental value to our loyalty card program while strategically expanding our marketing reach,” Mona Golub, vice president of public relations and consumer services at Price Chopper, told The Business Review (Albany, NY).
Individual offers can be tailored to customers as Price Chopper tracks their purchasing activity for the previous 64 weeks. Included in the analysis is the amount spent by shoppers and purchases by product category.
The system, according to the grocer, enables direct one-to-one communication with customers every time they visit a store to shop.
Discussion Questions: How do you view the strategy of tailoring offers to what consumers want and value rather than what suppliers and retailers are looking to sell? What would a system that truly enables a direct one-to-one communication with customers every time they visit a store mean for the retailer/supplier relationship?
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Issuing relevant, customized, targeted coupons is the right thing to do, and (full disclosure) one of the businesses in which I am heavily involved. As VP Retail for Catalina Marketing for a few years in the late 80s, one of my self-assigned missions was to eliminate irrelevancy in Checkout Coupons. The more times you offer pet-food purchasers a chance to buy a customized name tag for their pet’s collar, the more you teach them that the strip of coupons the cashier hands them has little value. So, they overlook the good coupons and just pitch the whole mess. The stories I could tell.
No-cost, at-the-shelf, high-value, relevant, targeted coupons is the next step. It’s a great way to refresh a stale frequent shopper program and put all that purchase data to work – finally.
This is a natural extension of the idea that you should sell what your customers want to buy, rather than what your merchants want to sell. Promoting what you want to sell has certain strategic benefits to the company. Promoting what your customer wants to buy is more likely to lead to larger baskets and increased customer loyalty. There is some risk at the leading edge that customers will be concerned about the level of knowledge about their personal shopping habits (though more understand this issue today than ever before). I think that concern will be overcome as the promotional experience becomes more personalized and productive for the consumer.
The idea, however, should be to extend this concept to some proactive marketing. Why not send an email telling that customer that they can get these items on promotion if they come in to the store during a certain period? Better yet, tell them you will pick and hold them for her if she simply clicks boxes telling the store which wants she wants. That way, she can swing buy and pick them up saving her time and still driving a sale without having to wait for her next visit.
Proactive marketing tailored to the customer rather than reactive marketing is more likely to drive increased sales opportunities.
Price Chopper gets it. This is a consumer dream: on-demand discounts tailored to shopping habits, not based on the whims of suppliers and retailers’ bottom line. Such a relationship makes it more challenging for Price Chopper, but puts the power of decision-making back in the hands of the consumer.
It may take awhile for the benefits to truly sink in, but Price Chopper now recognizes that the consumer should be in control of his or her own relationship with the retailer. As soon as the consumer completely realizes that they are not be constantly harassed with irrelevant product promo info, and they can control touch points, the rewards for Price Chopper will grow.
This is absolutely a win, win, win for everyone involved. (Except maybe Catalina Marketing who was one of the originators of the receipt coupons.) The consumer wins because they don’t have to weed through coupons for stuff they are not interested in buying. The manufacturer wins because the targeted consumers are already shopping for similar products so they know the consumer is interested in the category. And the retailer wins because they are offering a unique service that is attached to their loyalty card. What a great opportunity for everyone.
The receipt coupons are always a pain because you receive them on the way out the door. You’ve already bought 3 weeks supply of the non-promoted brand and don’t remember or save the coupon for your next visit. With this method you can receive the coupons on the way in and they act like an additional shopping list, sending you to sections of the store you may not have visited otherwise. Also, because you stopped at the kiosk, this is not your “run in and grab something” trip. You’re there to do some major shopping and the retailer has given you a targeted list of discounts to help you save money. That’s customer service.
This example by Price Chopper just illustrates the benefits of customer loyalty cards to both retailers and consumers.
A&P family banner store’s loyalty cards also reward customers with coupons after each sale for products the customer uses and needs, just like Ralphs.
Food Lion’s Bloom banner goes one step further with a 1 percent rebate program.
As the benefits of these loyalty cards continue to develop, this will give supermarket operators more weapons in their arsenal against the big guys like CVS which have mastered the benefits of the loyalty card to their advantage.
Whooopeeee–another way to give a price discount. And they call these loyalty programs? So has Price Chopper done away with their regular flyer, or is this on top of the base TPRs?
Kudos to Price Chopper for using their loyalty data to help the customer save money at their store on the things the customer wants to buy. This kind of targeted communication and personalized offer content is exactly where the value lies in loyalty programs–both for the customer and for the retailer.
The biggest challenge of this system will be sustaining sufficient offer content. A non-targeted program requires only a small number of CPG brands to “buy a coupon slot” in a standardized offer sheet. This program requires a much larger bank of offers to be available, because only a sub segment of customers will qualify for any individual offer.
I was both taken aback and impressed several years ago when I was presented a coupon printed at the cash register with my receipt for a shampoo specifically for blondes at Ralphs supermarket. This is a smart approach because the coupons are presented after the purchase is made, giving the consumer reason to come back.
It is a no-brainer that retailers should use the customer-specific POS data that they gather to create targeted offers, however, those offers should be the kind that encourage the consumer to spend incremental dollars. For example, if their average purchase is $35, provide an incentive to spend $50…or if they are buying generics, present a coupon for the gourmet versions of those products. Also, if their collective data show that people who purchase brie have a strong preference for a certain type of wine, offer the same wine to others who have purchased the brie only.
It was pretty quiet in the marketplace for long time after we launched our relevant, entrance-marketing solution in Albertsons (branded avenu by Albertson). Now that the solution is serving shoppers in over 600 SUPERVALU/Albertsons stores, it is refreshing to see others try to replicate our success. After all, imitation is the sincerest form of flattery.
It’s rewarding to see retailers, CPGs and the industry get excited about our company’s founding idea of combining shopper purchase data with offers at store entrance to reduce ad clutter for shoppers while improving both sales and promotion efficiency for manufacturers and retailers.
It goes well beyond giving discounts to loyal shoppers.
Reaching shoppers with relevant offers as they enter the store, “When their wallets are full and baskets are empty.” has been measured to produce the greatest sales gains for the lowest cost.
My perception is that this is an appropriate use of loyalty card information. US grocery chains, in my opinion, do not use loyalty card information in an optimal manner. Rewarding loyal customers with specific discounts appropriate to their shopping patterns is a good step.
However, it is NOT a promotion in the sense that normal couponing is used to drive volume toward a point in time, shift choices within a category, or influence unplanned behavior. Using these targeted offers as reward is not inappropriate. It is unlikely to generate significant volume.
I also agree with other comments about more impactful investments in rewarding high volume customers. Let’s be creative, retail community!
Personalized Marketing has myriad benefits over the traditional “hit or miss” platforms that have been used for decades. Albeit, there may be some “big brother” implications, but simply put, I would rather be presented with offers that are directed at my buying habits than be swamped with offers I would never use. If I prefer one brand over another, an offer of a discount on a lesser preferred brand is innocuous at best. Marketing dollars get better rates of return and the customer feels personally rewarded for their loyalty to a certain store. I’m aware of another company called Pay By Touch which, with Green Hills, has incorporated a similar program, and according to Aite Group, the results have been exponentially better than simply sending out mass mailings. I believe the report can be found on Aite’s website.
As noted by others, the concept of targeting offerings to preferred shoppers makes sense. However, it appears that this is a continuation of price discounting for “loyal shoppers.” While I am not opposed to this, I still believe that there are a number of non-price issues that retailers could solve for those repeat and high volume customers, e.g., a reservation time for check-out, special check out lines, double baggers for speed, a dedicated deli ordering system, a personal shopper, etc. Each of these examples needs to be viewed in terms of its costs and benefits. The point being is that we need to consider more than price discounts or frozen turkeys at Thanksgiving.
The airlines have not been a model for customer service, except for their premiere customers. These customers are offered special check-in lines, more spacious seating, upgrades, special reservation numbers, etc. The one thing they do not receive are discounted air fares.
Food retailers need to determine what real problems we can solve for our loyal customers.
The Price Chopper AdvantEdge card will propel higher redemption rates compared to receipt coupons given by cashiers. Is this smarter marketing? Yes. Is it customer-driven? Well, it’s definitely more convenient but it’s clear that the coupons are financed by CPG’s. It’s such a simple idea. Let’s see how long it takes every other loyalty-card supermarket to copy it. There’s no reason not to. Why not use this system as well as the cashier-generated coupons to encourage return trips?
The primary benefit of the coupon machines to date has been that they offer the incentives at the beginning of the shopping trip–as opposed to checkout coupon systems–and they are highly relevant to the current shopping trip because of the time and place they are offered. What they were lacking was relevance to a particular shopper. If this system is successful at adding that benefit, it seems like a winner.
The challenge in fully capturing the benefits of coupon-based promotions for consumers is finding the right shopping occasion in which to use them. Unless you are a habitual coupon-cutter, frankly these deals are tough to grab. Thus, the success of loyalty card programs with embedded discounts. This seems like a further extension, which should allow retailers and suppliers to increase the likelihood that a coupon will encourage purchase by targeting the right folks. Using technology in this way makes a lot of sense; ask Amazon.
This is exactly what retailers should have been doing all along, instead of inundating consumers with coupons that they will rarely use. I guess Price Chopper is at least taking CRM seriously. Customer-centric and customer-managed rewards programs have been leveraged very successfully in financial services (like the ThankYou Network from Citibank) and there is no reason why it should not increase loyalty and retention within the retail sector.
This helps make Price Chopper “the customer advocate,” which is always a good thing. New products, of course, still need promotion, and I’m sure Price Chopper is aware of that and will continue to respond accordingly. This should help move marketing more to the consumer (remember Efficient Consumer Response?) Price Chopper, BTW, is really a terrific retailer, and deserves a lot more acclaim than it gets.
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Issuing relevant, customized, targeted coupons is the right thing to do, and (full disclosure) one of the businesses in which I am heavily involved. As VP Retail for Catalina Marketing for a few years in the late 80s, one of my self-assigned missions was to eliminate irrelevancy in Checkout Coupons. The more times you offer pet-food purchasers a chance to buy a customized name tag for their pet’s collar, the more you teach them that the strip of coupons the cashier hands them has little value. So, they overlook the good coupons and just pitch the whole mess. The stories I could tell.
No-cost, at-the-shelf, high-value, relevant, targeted coupons is the next step. It’s a great way to refresh a stale frequent shopper program and put all that purchase data to work – finally.
This is a natural extension of the idea that you should sell what your customers want to buy, rather than what your merchants want to sell. Promoting what you want to sell has certain strategic benefits to the company. Promoting what your customer wants to buy is more likely to lead to larger baskets and increased customer loyalty. There is some risk at the leading edge that customers will be concerned about the level of knowledge about their personal shopping habits (though more understand this issue today than ever before). I think that concern will be overcome as the promotional experience becomes more personalized and productive for the consumer.
The idea, however, should be to extend this concept to some proactive marketing. Why not send an email telling that customer that they can get these items on promotion if they come in to the store during a certain period? Better yet, tell them you will pick and hold them for her if she simply clicks boxes telling the store which wants she wants. That way, she can swing buy and pick them up saving her time and still driving a sale without having to wait for her next visit.
Proactive marketing tailored to the customer rather than reactive marketing is more likely to drive increased sales opportunities.
Price Chopper gets it. This is a consumer dream: on-demand discounts tailored to shopping habits, not based on the whims of suppliers and retailers’ bottom line. Such a relationship makes it more challenging for Price Chopper, but puts the power of decision-making back in the hands of the consumer.
It may take awhile for the benefits to truly sink in, but Price Chopper now recognizes that the consumer should be in control of his or her own relationship with the retailer. As soon as the consumer completely realizes that they are not be constantly harassed with irrelevant product promo info, and they can control touch points, the rewards for Price Chopper will grow.
This is absolutely a win, win, win for everyone involved. (Except maybe Catalina Marketing who was one of the originators of the receipt coupons.) The consumer wins because they don’t have to weed through coupons for stuff they are not interested in buying. The manufacturer wins because the targeted consumers are already shopping for similar products so they know the consumer is interested in the category. And the retailer wins because they are offering a unique service that is attached to their loyalty card. What a great opportunity for everyone.
The receipt coupons are always a pain because you receive them on the way out the door. You’ve already bought 3 weeks supply of the non-promoted brand and don’t remember or save the coupon for your next visit. With this method you can receive the coupons on the way in and they act like an additional shopping list, sending you to sections of the store you may not have visited otherwise. Also, because you stopped at the kiosk, this is not your “run in and grab something” trip. You’re there to do some major shopping and the retailer has given you a targeted list of discounts to help you save money. That’s customer service.
This example by Price Chopper just illustrates the benefits of customer loyalty cards to both retailers and consumers.
A&P family banner store’s loyalty cards also reward customers with coupons after each sale for products the customer uses and needs, just like Ralphs.
Food Lion’s Bloom banner goes one step further with a 1 percent rebate program.
As the benefits of these loyalty cards continue to develop, this will give supermarket operators more weapons in their arsenal against the big guys like CVS which have mastered the benefits of the loyalty card to their advantage.
Whooopeeee–another way to give a price discount. And they call these loyalty programs? So has Price Chopper done away with their regular flyer, or is this on top of the base TPRs?
Kudos to Price Chopper for using their loyalty data to help the customer save money at their store on the things the customer wants to buy. This kind of targeted communication and personalized offer content is exactly where the value lies in loyalty programs–both for the customer and for the retailer.
The biggest challenge of this system will be sustaining sufficient offer content. A non-targeted program requires only a small number of CPG brands to “buy a coupon slot” in a standardized offer sheet. This program requires a much larger bank of offers to be available, because only a sub segment of customers will qualify for any individual offer.
I was both taken aback and impressed several years ago when I was presented a coupon printed at the cash register with my receipt for a shampoo specifically for blondes at Ralphs supermarket. This is a smart approach because the coupons are presented after the purchase is made, giving the consumer reason to come back.
It is a no-brainer that retailers should use the customer-specific POS data that they gather to create targeted offers, however, those offers should be the kind that encourage the consumer to spend incremental dollars. For example, if their average purchase is $35, provide an incentive to spend $50…or if they are buying generics, present a coupon for the gourmet versions of those products. Also, if their collective data show that people who purchase brie have a strong preference for a certain type of wine, offer the same wine to others who have purchased the brie only.
It was pretty quiet in the marketplace for long time after we launched our relevant, entrance-marketing solution in Albertsons (branded avenu by Albertson). Now that the solution is serving shoppers in over 600 SUPERVALU/Albertsons stores, it is refreshing to see others try to replicate our success. After all, imitation is the sincerest form of flattery.
It’s rewarding to see retailers, CPGs and the industry get excited about our company’s founding idea of combining shopper purchase data with offers at store entrance to reduce ad clutter for shoppers while improving both sales and promotion efficiency for manufacturers and retailers.
It goes well beyond giving discounts to loyal shoppers.
Reaching shoppers with relevant offers as they enter the store, “When their wallets are full and baskets are empty.” has been measured to produce the greatest sales gains for the lowest cost.
My perception is that this is an appropriate use of loyalty card information. US grocery chains, in my opinion, do not use loyalty card information in an optimal manner. Rewarding loyal customers with specific discounts appropriate to their shopping patterns is a good step.
However, it is NOT a promotion in the sense that normal couponing is used to drive volume toward a point in time, shift choices within a category, or influence unplanned behavior. Using these targeted offers as reward is not inappropriate. It is unlikely to generate significant volume.
I also agree with other comments about more impactful investments in rewarding high volume customers. Let’s be creative, retail community!
Personalized Marketing has myriad benefits over the traditional “hit or miss” platforms that have been used for decades. Albeit, there may be some “big brother” implications, but simply put, I would rather be presented with offers that are directed at my buying habits than be swamped with offers I would never use. If I prefer one brand over another, an offer of a discount on a lesser preferred brand is innocuous at best. Marketing dollars get better rates of return and the customer feels personally rewarded for their loyalty to a certain store. I’m aware of another company called Pay By Touch which, with Green Hills, has incorporated a similar program, and according to Aite Group, the results have been exponentially better than simply sending out mass mailings. I believe the report can be found on Aite’s website.
As noted by others, the concept of targeting offerings to preferred shoppers makes sense. However, it appears that this is a continuation of price discounting for “loyal shoppers.” While I am not opposed to this, I still believe that there are a number of non-price issues that retailers could solve for those repeat and high volume customers, e.g., a reservation time for check-out, special check out lines, double baggers for speed, a dedicated deli ordering system, a personal shopper, etc. Each of these examples needs to be viewed in terms of its costs and benefits. The point being is that we need to consider more than price discounts or frozen turkeys at Thanksgiving.
The airlines have not been a model for customer service, except for their premiere customers. These customers are offered special check-in lines, more spacious seating, upgrades, special reservation numbers, etc. The one thing they do not receive are discounted air fares.
Food retailers need to determine what real problems we can solve for our loyal customers.
The Price Chopper AdvantEdge card will propel higher redemption rates compared to receipt coupons given by cashiers. Is this smarter marketing? Yes. Is it customer-driven? Well, it’s definitely more convenient but it’s clear that the coupons are financed by CPG’s. It’s such a simple idea. Let’s see how long it takes every other loyalty-card supermarket to copy it. There’s no reason not to. Why not use this system as well as the cashier-generated coupons to encourage return trips?
The primary benefit of the coupon machines to date has been that they offer the incentives at the beginning of the shopping trip–as opposed to checkout coupon systems–and they are highly relevant to the current shopping trip because of the time and place they are offered. What they were lacking was relevance to a particular shopper. If this system is successful at adding that benefit, it seems like a winner.
The challenge in fully capturing the benefits of coupon-based promotions for consumers is finding the right shopping occasion in which to use them. Unless you are a habitual coupon-cutter, frankly these deals are tough to grab. Thus, the success of loyalty card programs with embedded discounts. This seems like a further extension, which should allow retailers and suppliers to increase the likelihood that a coupon will encourage purchase by targeting the right folks. Using technology in this way makes a lot of sense; ask Amazon.
This is exactly what retailers should have been doing all along, instead of inundating consumers with coupons that they will rarely use. I guess Price Chopper is at least taking CRM seriously. Customer-centric and customer-managed rewards programs have been leveraged very successfully in financial services (like the ThankYou Network from Citibank) and there is no reason why it should not increase loyalty and retention within the retail sector.
This helps make Price Chopper “the customer advocate,” which is always a good thing. New products, of course, still need promotion, and I’m sure Price Chopper is aware of that and will continue to respond accordingly. This should help move marketing more to the consumer (remember Efficient Consumer Response?) Price Chopper, BTW, is really a terrific retailer, and deserves a lot more acclaim than it gets.