PMA CONFERENCE

COLE CORBIN

WEST PALM BEACH, Fla. -- Bashas' Markets, Chandler, Ariz., is relying on its store-level interaction with customers, as well as the integration of the Internet, as two live wires that may spark the success of its customer-loyalty program.

"It is all about customer retention. We've made adjustments by making hard-based initiatives in stores."

This was the news Christie Frazier-Coleman, director of customer marketing for Bashas', presented during the Promotions Marketing Association Conference here Feb. 8.

Such initiatives include communication at the store level between the customer and the store's managers and cashiers, she explained.

"If a store manager or clerk does not communicate to the customer that they are eligible for a 5% discount, for example, then that program is for naught," Coleman said. "Store training is a big focus when dealing with customer-loyalty programs.

"The interaction required goes beyond the current frequent-shopper program. We want to deliver messages," she added. "Loyalty is recognition, personalization and meeting someone's needs. Having a card is just an added bonus."

In the future, Coleman predicts that loyalty programs will empower the Internet.

"Households with Internet access have nearly 50% more annual income than average American households [without an Internet connection]," said Coleman. "This should serve as an indicator to retailers about where some of their biggest spending customers are."

For example, Bashas' Internet-based home-delivery service ranks an average order as four times larger than the average order purchased at its retail stores.

"You have to rethink how you use marketing," when using the Internet, she said.

A clever use of marketing is key to attracting customers and building a loyal customer base. "The first step to a successful customer-loyalty program is to start collecting data," Coleman said.

"In the [program's] initial stages you learn about customer segments, and what those segments look like," she added. "Most stores have primary, secondary and occasional customers.

"Our most valuable group is the 30% of shoppers who equal 70% of our sales. This is what [the program] is all about," she said. "Then you start looking at the purchasing data of these customers to really begin a loyalty program," and reward the best customers based on their purchase history. Bashas' began its journey into the analysis of its best customers when it launched its frequent-shopper program in September, 1996. Another goal of the 96-store retailer "is to move the secondary customers into the primary group," she added.

To accomplish this goal, Coleman said that Bashas' had also begun home mailings, community programs and sub-clubs to enhance the loyalty program. Coleman declined to give specific examples during the presentation.