LOYALTY PROGRAM GARNERS 80% SIGN-UP RATE AT FOODTOWN

DAN ALAIMO / Additional reporting: CHRISTINE BLANK

NEW ORLEANS -- A year ago, PSK Supermarkets, dba Foodtown, Mount Vernon, N.Y., had no loyalty program or any kind of a shopper card. But following the launch of such a program last summer in eight of its 11 stores, the chain has signed up about 80% of the customers in those stores, said Noah Katz, vice president, speaking at the ninth annual Conference on Global Electronic Marketing, also known as GEMCON, last month.

This extraordinary success was due to comprehensive planning, an aggressive introduction at store level, actively involving employees and a tie-in with a new iteration of relatively ancient brand name in loyalty programs: S&H Greenpoints, Manchester, N.H.

"Our goal for the rollout was pretty simple," said Katz. "The supermarket business is about taking care of customers. We rolled this system out to use the technology to better take care of our customers. At the same time, we wanted to use the technology to help change our company's culture and make it more customer centered."

PSK partnered with NCR Corp., Dayton, Ohio, and xiNETix, Fort Lauderdale, Fla., he said.

PSK rolled out the S&H Greenpoints program in November. "The more you shop at the store, the more points you get," said Daniel Katz, also a vice president at PSK, in a separate interview. "You are automatically incented to be more loyal."

As a result of the program, "our sales have been up in the double-digits, along with substantial increases in gross profit," said Daniel Katz. He attributed part of this success to consumer awareness of S&H. "Over 60% of our customers knew about the brand," he said.

To introduce the program, "We had a lot of store-level pep rallies," said Noah Katz. Noah, Daniel and their father, Sydney Katz, all went out to the stores. "We had a lot of meetings and got our whole company psyched up about this program and that is part of the reason that we were successful," he said.

In the program, customers get 10 points for every dollar they spend, have the option of redeeming points for catalog merchandise, which they can get from a web site as well as through traditional means, or for free and discounted merchandise at the store. "We are finding that about half the people redeem their points right in the store and half are going for the merchandise in the catalog," said Noah Katz.