GREENACRES, Wash. -- Tidyman's here is converting the cards in its frequent-shopper program from magnetic-strip to bar-coded key chain cards this week to ensure that its enrolled customers bring the card to receive discounts on purchased items.
The chain, which already tracks frequent-shopper members' purchase information for more targeted promotions, is emphasizing its loyalty program as the centerpiece of its marketing efforts.
"The bar-code card technology functions exactly like the magnetic-strip -- once the bar code is scanned, the customers will receive credit for the discounts they are entitled to during checkout," said Mike Davis, chief operating officer for Tidyman's.
He added, "Besides a bar code, the card is equipped with a key chain to ensure that customers will remember to carry their card at all times -- no card, no discounts."
Previously, the customer would insert the magnetic-strip card into a point-of-sale terminal which, in addition to accepting debit and credit cards for payment, keeps track of all customer-specific discounts and promotions the shopper is entitled to.
The terminal also provides a special receipt for all sale and promotional items that the customer received during the visit.
By using the bar-code technology, Tidyman's customers will now hand the card to checkers to be scanned at the POS and electronically receive their discounts. The terminal will continue to process debit and credit payments as well as print loyal-customer discount receipts.
Davis reports that a significant amount of Tidyman's weekly sales are comprised of loyalty-card transactions.
"At least 80% of our sales dollars are made by people using our loyalty card," he said. Tidyman's reached a high level of card sales by aggressively promoting awareness throughout the stores.
"We have seen the amount of card transaction sales rise from 40% to 80% within a six-month period," Davis explained.
In addition to signs promoting the program throughout the stores to raise the card sales level, "we offered bonuses to our associates to achieve a 76% transaction goal -- we asked them to be attentive and make sure the customers presented their loyalty cards," he said.
Davis told SN that 40,000 individual households use the card throughout the chain weekly, with an average order of $35.
"When we first launched the loyalty program, it was an addition to our marketing strategy -- not the centerpiece," Davis said. "Within the last nine months, however, we have focused on this as our primary marketing tool to target our best shoppers."
As loyalty cards are scanned at the POS, the shopper's demographic information and purchase history are transmitted and stored in an off-site database via a dedicated network maintained by Tidyman's third-party service provider, Advanced Promotion Technologies, Pompano Beach, Fla.
APT provides Tidyman's with a report, either in hard copy or electronically via modem, every 90 days, Davis said. The report shows the retailer's top shoppers, their average spending, new shoppers, lost shoppers, even product movement for specific promotions.
"This report enables us to look directly at our consumers' behavior and generate specific mailings and promotions to our best customers," he said.
When the program was launched four years ago, Tidyman's hit the obstacle of not using its customer data to its fullest potential.
"I think our biggest obstacle was not understanding why we were using a card program -- originally we treated it as a way to give our customers discounts, and it took some time for us to get out of that mind-set," said Davis.
Davis explained that the goal of Tidyman's loyalty program is to use it to make strides in increasing sales.
"Through a targeted use of our customer database, a couple of years down the road this loyalty program will allow us to transfer our customer information into a strategic marketing tool that will build loyalty while improving our sales and profitability."