A Tool to Shape Food Store Strategy
By Brian Woolf
Softback, published in January 1994
In 1993 I was invited by the Coca Cola Retailing Research Council to conduct a 6-month study of the embryonic loyalty card practices that were beginning to appear among US retailers.
At that time, loyalty point-of-sale technology was absent or primitive, so technological recommendations were limited. Promotions were still primarily via newspapers and mail (eg, postcards). Sophisticated technology didnt start appearing until about a decade later.
Assisted by a business colleague, Wanda Shive, we explored the different types of loyalty card programs across the US, from airline Frequent Flyer programs to punch paper-card, small-retailer loyalty programs. We looked at a UK food retailer with a 1% points cash-back program [and learned that the UK supermarket profit/sales margin was twice that of the US, so even if it worked in the UK it wouldnt be affordable in the US.] We spoke to a smart, independent Australian food retailer who issued points on customer spending and offered items in a glass case in each of his stores as point redemption items. We studied the inner working of one US food retailer whose loyalty program was modeled on an airline program; we discovered his cost structure was correspondingly sky-high. As we studied the wide array of goals, practices, and results, it clarified our focus: we sought to provide a framework for a simple-to-understand, low-cost flexible program that increased both customer loyalty and the retailers profitability.
We did. This downloadable report was the result.
Coca Cola which, over many years, had supported such initiatives for the food industry published 20,000 copies which were distributed to supermarkets for no cost throughout the US and also in Europe, Japan, and Australia. [Published copies were soon out-of-print.] The report provided a framework for retailers on what to think about when considering whether to introduce a loyalty program, what to measure, and ways to make it successful for both customers and retailers. There being nothing comparable at that time so this became the Food Retailers "Loyalty Bible."
After the launch of this 1994 Coca Cola report, I had the pleasure of speaking in many states as well as on other continents. Based upon the questions received, I realized there was a hunger for more information and examples of customer reports that would help measure progress and success. Thus, the genesis of two of the books featured in this section: Customer Specific Marketing (1996) and Loyalty Marketing: The Second Act (2001). Interest in them was widespread: one or both of them were translated into Japanese, French, Italian, and Spanish.
Another byproduct that came from this Coca-Cola-sponsored report was a series of articles addressing specific marketing and/or loyalty issues. They can be found on this website under the tab, Articles: Marketing & Loyalty.
Finally, to explain the free downloadable PDF-the Coca Cola's Business Solutions unit has taken and published in electronic (PDF) format a number of its annual Coca Cola Retailing Research Reports on different topics and offer them to retailers seeking to improve their businesses.
I hope you enjoy reading about some of thoughts and ideas that contributed a little to the modern Loyalty Marketing Revolution.
Brian Woolf is a global leader in loyalty marketing and has written three definitive works on the subject, Measured Marketing: A Tool to Shape Food Store Strategy, Customer Specific Marketing, and Loyalty Marketing: The Second Act. He devotes his time to helping retailers develop, critique and strengthen their loyalty programs.
The techniques and metrics Brian Woolf has developed have become guiding principles for those operating some of the world's most successful programs. He is the President of the Retail Strategy Center, and has consulted, and spoken at conferences, in the US, Europe, Japan, and Australasia.
Prior to his total commitment to loyalty marketing, his corporate roles included Deputy Managing Director of Progressive Enterprises, a major New Zealand retailer; and Chief Financial Officer of Food Lion, a leading US food retailer. He has an M.Com. (Economics) from the University of Auckland, New Zealand, and an MBA from the Harvard Business School.