Dorothy Lane Segments Top Spenders

CHRISTINA VEIDERS

DAYTON, Ohio — Norman Mayne, chief executive officer of the upscale Dorothy Lane Market here, told SN he lets history define the company's future.

That history is centered on customer spending levels, segmented to reward Dorothy Lane's best customers. The three-store independent has won industry acclaim for breaking from tradition by dropping its weekly promotional circular 12 years ago and introducing the Club DLM loyalty card program as the mechanism to reward customer spending.

One thing that hasn't changed in those 12 years, said Mayne, is the breakdown of percentage of customers' spending. According to Mayne, 30% of the customers represent 85% of sales, 10% produce 55% of sales, and just 1% produce 12% of sales. “That is the way it is in every grocery store in the world,” he said.

Mayne said he believes customer data can be over-analyzed by looking at too much demographic information. “We don't ask any of those demographic questions, because those questions are answered once consumers start buying from us.”

The formula is beautifully simple and effective. Consumer spending determines who Dorothy Lane's best customers are, and the amount they are rewarded. Those who spend more enjoy bigger discounts or rewards.

Club members are segmented into four spending levels, explained Amy Brinkmoeller, MIS director, who declined to give details about the dollar-amount criteria for each level. “Customers need to average at least $20 a week or more,” she said. One media report said top-level spenders buy more than $40,000 a year.

This month, the retailer is rewarding a percentage off store transactions to their best customers. Those who spend the most will get higher discounts on their transactions.

CUSTOMERS ‘WORTH A MINT’

The retailer is well known for its gifts to top-level spenders. Mayne and store directors have personally delivered flowers to customers as a thank-you. Other past examples of gifts include a three-box tower of Dorothy Lane signature items for nearly 300 top customers, who received a letter thanking them for their business; and mints to about 3,000 customers with a note “you're worth a mint to us.”

Besides overall spend, the retailer drills deeper into category spending and lifestyle, said Brinkmoeller. Special offers on a new organic line, for example, go to organic shoppers, and those who love artisan breads get other targeted offers.

About 65% of Dorothy Lane's shoppers are enrolled in the program, and about 88% of sales are card-based, SN has previously reported.

About 15,000 club members receive the Market Report newsletter that details new products available, includes recipes and offers coupons with significant savings. The newsletter is published in four different versions to coincide with customer spending levels.

“In-store, we want to treat everyone the same and have the same service experience,” Brinkmoeller said. “But we want to take it up a notch for our best customers.”