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Lots of reaction to last Friday’s interview with Rick Ferguson, editorial director for COLLOQUY and, about the subject of loyalty marketing. Some excerpts…

MNB user Dan Raftery of Prime Consulting Group wrote:

“Ferguson hit several nails squarely on their heads. Examples of successful frequent shopper programs outside the grocery industry abound (airlines, hotels, department stores, even Content Guy's favorites - donut shops). They have two things in common. First, they all involve rewards for frequency. Second, they invest heavily in consumer marketing across a wide range of events/programs.

“One action they often take is to reach out to lost customers with enticements to return or simply to learn why they left. This is called recency, in the CRM world.

“So, frequency and recency are key metrics. And they are available in all supermarket card programs. Have been forever. The reluctance to use available data is not simply an operational mindset (I'd argue that companies that operate airplanes are heavily focused on operations too, regardless of how they appear to perform). It’s also related to the industry's reliance on suppliers to be the primary marketers rather than develop the capability in-house.

“Which brings us to the Catch-22 of privacy fears. The retailers hold the data that the suppliers' marketing resources could use, but suppliers can't be given access to it because that could be construed as an invasion of privacy.

“Since there are always exceptions to the rule, hopefully MNB user Ken Robb will chime in here. He had a great gig at Dick's Supermarkets for a while where he actually did many of the things that us pesky consultants have been harping about for years.”


Walter Wahlfeldt, another member of the MNB community, wrote:

“My wife shops occasionally at the Polo store in downtown Chicago. Before Christmas, they sent a coupon worth $50 to spend at the store to “thank her for being a regular customer.” She was not required to buy anything else, simply spend the coupon a she wanted. Obviously, we are talking about grocers not Ralph Lauren, but the theory is the same. Grocers can track total spending with a loyalty card and give rewards when set limits are reached. I know it would motivate me far more than the feeling I get at Dominick’s when I forget my card and the teller simply swipes hers at checkout. That makes me feel like the current “loyalty” card is an annoying joke.”

MNB user Richard A. Cognetti Jr., wrote:

“Loyalty programs will never get better in the US because of the margin risk to start true incentive laden kickbacks. If a retailer is going to give rebates, or any other incentive “back” to the loyal consumer, the first thing accounting is going to want to know is where are you going to make up the lost margin. They will not be satisfied with hearing that we are going to “build” relationships because you can’t predict the success or failure.

“American retailers are focused on not losing rather than winning. I remember when my Wegman’s card was good for 10% off their brand. Now, it’s just good on an item with a sign in front of it. If I like Ragu spaghetti sauce, and I buy it every month at my grocery store, don’t force me to buy Emeril this week and Hunts next week, reward me for my loyalty to Ragu!”

And other MNB user wrote:

“The interview with Rick Ferguson was a very timely and appropriate coverage of a topic that has the industry scratching its head trying to understand what it did "wrong." I look forward to the subsequent interview portions being shared with MNB readers. Nice Job!”

Thanks. Part two of this interview series will run later this week…stay tuned!

Continued discussion of the Miller Lite mud wrestling ad…MNB user Don Sutton wrote:

“I may be out in left field, of course, but I suspect that had the mud wrestlers been clad in 1-piece, cover up everything bathing suits there would be just about as much backlash. There is a large number of folks who find it okay to cast guys in the buffoon role, but somebody trying to parody this by switching the sexes in that role will invariably raise the hue and cry. I've heard a lot of guys talking about how some people react when the shoe is on the other foot.

“As one guy said: "where is all this anger when dads are portrayed as slobbering, beer guzzling jerks? Is that what they want their sons to see on TV as role models? Are they really worried about their kids, or just saying it's only okay to make fun of men, forget the effect of that message on kids?"

“I also suspect that the good folks at Miller knew all that was going to come boiling out and sat back to watch the one-sided critics give them far more publicity than they could have gotten if they'd spent twice the ad budget money.

“And they're laughing all the way to the bank.

“Then again, I could be wrong.”

MNB user Tina Engberg wrote:

“I personally thought the mud-wrestling ad was very funny and called my husband in from his dishwashing in the kitchen to see it. While we are not consumers of beer of this sort (we are home-brewers and purchase craft beers), I would consider making a purchase of such a beer for my beer-butt chicken recipe, or for the less adventurous drinkers we have over for a party.”

Not exactly the resounding endorsement Miller probably was looking for, but what the hell…

And MNB user Rich Glass added:

“One more note on this....the original version I first saw of this has the two mud wrestling woman saying "Let's Make Out" at the very end. I saw it twice, then obviously it's been pulled from future airings. If people are upset about the current version, I can imagine what they would say about the original version.”

Actually, we’ve heard that the “let’s make out” version was for cable only…but have to admit that we think this version probably goes over the line.

Responding to last week’s story about McDonald’s maintaining an emphasis on value meals as well as focusing on new venues, one MNB user wrote:

“Changing the menu won't help. I go there for a hamburger and fries, it's good. The problem with McDonald's is, they're dirty and nasty! The help could care less if you come in there. They have no customer service!!!!!!”

Fair point.

On the subject of Kmart’s new store closings, one MNB user wrote:

“It doesn't make a whole lot of difference what stores Kmart closes because in two years they'll all be closed!”

And you folks think we’re cynical!

We wrote last week about two Safeway stores in California that are testing a shopping cart that uses infrared tracking to track customer’s shopping habits by asking them to swipe their frequent shopper cards, recording what they buy, and then offering them deals and suggestions based on recent purchases. MNB user Robert Reynolds, who lives near one of the stores, offers a first hand look at the carts:

“The system is cumbersome for shoppers -- requires shoppers to affix a laptop sized device to shopping carts on store entry to get the information. Limits access and easy reach into basket.

“Then, it is silent as you shop the store. Offers come up on the screen but if the shopper is not looking they will miss them.

“Screens are not very bright. Thus, visual clues are not easily seen. Very passive. Not intrusive enough.

“Technologically, it seems to work well. It knows what I buy regularly and tells me what to look for in each aisle -- From Shopper card data.

“But almost nobody seems to be using it.”

Thanks, Bob…
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