K-VA-T'S HOME-VISIT CARD OFFER ROLLS ON

Julie Gallagher

ABINGDON, Va. -- In one of the longer-running loyalty-card programs in the industry, K-VA-T Food Stores here kicked off its sixth annual "$100,000 Treasure Hunt" contest yesterday, giving card holders the opportunity to win money for buying private-label products.

The promotion rewards 18 shoppers up to $10,000 each, based on the number of private-label goods found in their home during a surprise visit by K-VA-T's Treasure Hunt Prize team. Winners receive $200 for presenting their Food City ValuCard to team members. An additional $100 is awarded for each Food City corporate brand product found in the home, with $200 paid for each Food City Supreme Clean product found.

Each year, about two or three winners hit the $10,000 prize limit, Tom Hembree, senior vice president of marketing, K-VA-T, told SN. Last year's winners collectively received $129,500.

At a time when food retailers are looking for ways to add value to their loyalty programs, K-VA-T's Treasure Hunt program has consistently managed to appeal to shoppers while benefiting the chain's bottom line.

"The Treasure Hunt contest is one of our most unique and exciting promotions," said Steven Smith, chief executive officer and president, K-VA-T, in a statement. K-VA-T operates 90 Food City stores in Kentucky, Virginia and Tennessee.

"While it's hard to determine exactly what motivates any given customer to complete an application requesting a [loyalty] card, we do receive a lot of customer inquiries regarding the contest," Hembree said.

On the financial side, "we've seen an [exponential] increase in corporate brand sales each year during the promotion," Hembree said. "The success of the program greatly outweighs its cost, unlike some other promotions."

Inventorying products at a shopper's home, per se, is not unique, said Betsy Tucker, consultant, Retail Systems Consulting, Naples, Fla. "I have seen another grocer with a home visit and $100 reward per private-label item."

But the K-VA-T program's longevity does impress Tucker. "What's unique is that [K-VA-T] has structured the program as an exciting annual event and has consistently offered it on an annual basis for the last six years," she said.

The $100,000 Treasure Hunt contest is funded by K-VA-T's corporate-brand vendors, who purchase various incentive display packages, Hembree said. The remainder of the funding is provided internally.

PRIVATE-LABEL FOCUS

Shoppers earn chances in the Treasure Hunt drawing by purchasing three or more K-VA-T private-label items with their Food City ValuCard during the same shopping visit. The private label-brands include Food City, Food Club, Pet Club/Paws, Top Crest, Top Care, Valu Time, Dining In, Full Circle and World Classics corporate-brand products using. These items are marked with shelf-talkers in the aisles.

Customers can also enter the drawing by filling out a ValuCard sweepstakes entry card.

The names of shoppers who receive home visits are selected from a computer-generated drawing facilitated by sweepstakes software created by K-VA-T's staff of in-house programmers, Hembree said. The home-visit winners will be selected throughout the contest period, which ends Oct. 15, with home visit planned for Sept. 17 and Oct. 1 and 22.

"Only a limited number of homes can be visited in one day," Hembree said. "Selecting winners on several dates gives our customers an opportunity to see who won and to stock up on the brands for the next round of home visits."

If no one over 18 years old is home at the time of the surprise visit, the shopper automatically forfeits eligibility. On each of the three visit days, the prize team visits homes until six winners have been identified.

"After the initial shock, winners are thrilled and anxious to start inventorying their winning products and see how much cash they've won," Hembree said. "We begin covering the rules with the winner, answering questions and obtain their signature on our release form." Even empty containers will earn the shopper prize money as long as its label is still intact, according to Tammy Baumgardner, spokeswoman, K-VA-T

Winners receive prize winnings of up to $3,000 in cash before the prize team leaves the home. A check for the rest of the prize money is mailed to the winner's home the following week. For advertising purposes, K-VA-T videotapes the entire home visit and photographs all of the winners before leaving the home.

K-VA-T advertises its Treasure Hunt contest in its weekly circulars, on television, radio, in-store audio, signage and displays, and through bag stuffers.

K-VA-T manages the Treasure Hunt program using an in-house database system and the sweepstakes software. "Purchase data is loaded to our data warehouse and verified weekly," Hembree said. "Our sweepstakes is conducted after all data pertaining to the sweepstakes time frame has been loaded and verified."

The system requires K-VA-T to enter the particulars of the contest, including its beginning and ending dates, products that earn entries and number of potential winners that need to be selected, Hembree explained.