FREQUENT SHOPPER PROGRAM IN NEW PHASE AT GREGERSON'S

DENISE ZIMMERMAN

GADSDEN, Ala. -- The electronic frequent shopper program under way at Gregerson's Foods here has attained targeted sales volume levels, measured in both dollars and number of transactions.

Now that 85% of all transactions are conducted on the card, representing 70% to 75% of total sales, the chain is turning attention to developing other components of the Club Greg program, said Peter "Greg" Gregerson, president.

Targeted mailings to the best customers and a retail partnering program designed to add value to the card have taken center stage since card sales volume hit projected levels.

"It would be difficult to reach much higher than that [75% of total sales] because quite a few people are just buying a pack of cigarettes or gum and they don't want to dig out their card for that," he said. "So I think we're pretty well 'maxxed out' on that."

Gregerson's, which reduced traditional advertising expenditures 20% since the program's 1994 launch, expects to cut ad spending by another 15% once its targeted mailing program kicks into high gear.

"We're going to convert from [run-of-press] newspaper ads and inserts to strictly mailing," he said. "For the most part we will be mailing only to the top 70% of our customers."

Next month, the chain will launch a two-tiered program of

targeted mailings, Gregerson said. Using point-of-sale data to segment shoppers according to spending levels, the retailer will send a promotional mailing to its top 20% of customers and another mailing to the next 50%.

The 30% of shoppers at lowest spending levels -- less than $20 weekly -- will not receive mailings. However, in-store materials will encourage those shoppers to step up spending to receive the mailings.

"We're just going to spell it out. That's the way it is. You have to purchase a minimum of $20 a week to have the mailing delivered to your home," Gregerson said.

The chain will monitor the program's effectiveness based on redemption of coupons contained in the mailings. The top 20% tier of shoppers will receive a mailing with more substantial incentives, he noted.

Initially, top-tier customers will receive identical mailings, Gregerson said. However, the retailer is planning to develop a market basket analysis program in order to differentiate among that group of shoppers to market to them more effectively.

Mailings will feature advertising for area businesses that offer special services and discounts to cardholders.

"We are putting a real strong push on what we call 'Club Greg Partners,' " Gregerson said. The chain is signing up local businesses to provide a service or savings to Club Greg cardholders in exchange for inclusion in the mailings.

Last week, Gregerson's launched its most recent frequent shopper promotion, called "Ham It Up" and tied in with the Easter holiday.

Cardholders achieving predesignated spending levels over 12 weeks' time will receive a free ham; lower levels of spending will be rewarded with other incentives.