Raley’s Unconventional Take on Shopper Loyalty

Raley’s was already worthy of retailer envy because of its affiliation with the prestigious marketing firm DunnhumbyUSA for a loyalty program.

That 6-month-old initiative, called “Something Extra,” enabled personalized customer offers based on consumer purchase histories and individual preferences.

But Raley’s wanted more. So it recently went further by partnering with BzzAgent, the social marketing unit of Dunnhumby, to layer in powerful components involving sampling and social media.

That put the 128-unit chain, based in West Sacramento, Calif., on the leading edge of loyalty program experimentation and makes it worth a closer look.

The newest element, called “Something Extra Try-It,” is being referred to as an “online advocacy program,” as reported by SN recently. Loyalty program customers who register for Try-It and complete surveys can receive free new product samples based on their previous purchase habits.

Recent examples included seasonal products tied to Easter, and specific items like soups, said Malcolm Faulds, senior vice president,  BzzAgent, and head of global marketing for Dunnhumby.

So far the focus has been on private label, but the effort will now layer in national brands as well.

Customers who participate are encouraged to spread opinions about these products, both through face-to-face exchanges and via Facebook, Twitter and other social media outlets.

“Social marketing is important for Raley’s and this program helps us identify our best customers online and reward them with experiences they’ll want to share with their friends in social media and in person,” said David Palmer, Raley’s vice president, marketing and customer relationships, in a company statement.

Read more: Raley's Encourages Online Consumer Advocacy

Here are some of the most interesting aspects of the Raley’s strategy:

• It puts customers to work for the retailer, which is a remarkable thing if you think about it. Shoppers aren’t just asked to spread opinions in return for free products, they’re actually scored on things like quality of content submitted and how actively they participate. Low scores make it less likely they’ll be asked to participate in the future.

• It links social media more closely with customer loyalty data so that the people doing the social media advocacy are the most relevant group.

• This is an unusual case because Dunnhumby, which has a deep relationship with Kroger, is partnering with another U.S. grocer. However, Raley’s doesn’t overlap with Kroger markets.

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• It represents a new investment direction for Raley’s. The retailer said it has diverted budgeted dollars from other traditional paid media to fund Try-It. That point evokes the recent comments of Safeway’s Steve Burd, chairman and CEO, who said the California-based chain may discontinue print ads in the U.S. by year-end because of the success of its Just for U marketing platform.

You might say the jury is still out on the effectiveness of this nontraditional approach from Raley’s. But here’s a reason to think the ultimate verdict will be success. Something similar was tried in the middle of last year. Kroger and U.K.-based Tesco partnered with BzzAgent to recruit Millennials willing to comment on new products in blogs and social media. Tesco’s efforts focused on the premium ice cream line called ChokaBlok, and the results were conclusive: A double-digit sales increase and a strong ROI that was similar to results of targeted direct response vehicles.

That’s the kind of outcome that makes it likely we’ll see more efforts along these lines.

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