STEVENS POINT, Wis. -- Copps Corp. here will launch a campaign to double its frequent shopper membership base and introduce some innovative program rewards such as exclusive checklanes for cardholders.
The retailer-wholesaler will launch a major frequent shopper promotion next month in all 18 corporate stores, with a goal of enlisting 70%-80% of its customers.
"We're starting a complete relaunch of the program," John Weckerly, vice president of marketing, told SN. "We're going to attempt to double the number of people we have signed up." Copps estimates it has about 30%-40% of its customers currently enrolled.
Copps said it hopes to achieve "critical mass" of about 70% enrollment before offering a variety of exclusive benefits to frequent shoppers with the highest loyalty and spending rates.
"We're going to build a wall around our best customers," Weckerly said. "We want to create a situation where it would be unthinkable for one of them to ever do their primary shopping at any store besides Copps."
While the chain has not decided which rewards to offer, one strong possibility includes designating checkout lanes to be used exclusively by cardholders.
Other program benefits under consideration include cash rebates that could be issued several different ways. "We can deliver them a gift certificate right at the time of purchase or could do it via direct mail," he said.
Copps may also arrange for store managers to be alerted when a shopper's spending has crossed certain thresholds so they may personally thank the customer in the checklane before
leaving the store.
Weckerly acknowledged such rewards may have a negative impact on customers who don't qualify for the preferential treatment. "There is a good chance we will alienate some customers and lose them. This is probably going to be the most difficult change for us to overcome."
But such customers "are by definition not especially loyal, intend to shop us only for discounted items, [their] transaction size is small and [they] cost us money and profit," Weckerly said during a presentation at the Food Marketing Institute show here last month.
Copps has already compiled frequent shopper purchasing data to determine which customers are most valuable. Based on data from about 1.7 million purchases made by frequent shopper members over a 28-week period, the company identified three groups of "best customers" to be targeted:
· Prime: Consumers who visited the store at least 20 of the 28 weeks and spent on average more than $50 each visit.
· Spenders: Consumers who spent more than $1,500 at Copps over the time period.
· High-Frequency: Shoppers who visited a store more than once weekly and spent more than $20 per visit.
"These top three groups account for less than 30% of our cardholders but account for 62% of cardholder dollar sales," Weckerly said. By contrast, "marginal" consumers, who visit infrequently and make small purchases, represent 33% of the chain's cardholders but less than 7% of sales, he said.
"As a result of the data Copps decided to acknowledge and reward our best customers," Weckerly said. As an initial step, the retailer late last month mailed thank-you letters and $5 discount certificates to all customers in the three groups.
Weckerly said that before Copps can develop the program further, it must be sure a great majority of its customers are enrolled in its frequent shopper program.
"Until we get to at least 60% and preferably 70% membership, there will still be a little reluctance to shut off some of those customers who mean less to [us]," Weckerly said. "There's still a pretty intense pressure to keep up a shotgun approach to marketing."
Once critical mass is attained, however, the retailer will be able to greatly streamline its marketing. "By creating this foundation of core customers we plan to mitigate the uncertainty of business planning," he added. Copps' ultimate goal is to regularly yield 50% of store sales and 75% of its profits from its cardmembers.
The retailer's frequent shopper program is based on a system from Advanced Promotion Technologies, Pompano Beach, Fla.
"The heart of our system is an interactive terminal located at every checkout," he said. "It can deliver coupons and instant cash discounts, provide recipes, show a video promotion, take a marketing survey, generate sweepstakes and provide a convenient way to pay for [debit and credit] purchases."