Wednesday, February 15, 2006

A Closer Look at PBT Loyalty Program

They say Loyalty Programs work only on those customers who were already loyal. The reason is that they're so generic, and one program doesn't really stand out from the other.

I have no personal loyalty to any specific grocery store. They all have food. I'm more loyal to "brands" than I am to stores. I can get "OM Bacon" at any grocery store. I don't have to go to a specific one. Therefore, would I be more likely to go to the store that has a sale on OM bacon? Like most, I think I would.

I do happen to know from my own personal experience, that loyalty programs can backfire. When a Rainbow Foods started their Rain-bow Card program, they showed two pricing schedules in the store. One with the card and one without. This made me feel that if I didn't want to go through the hassle of carrying a card with me, I was going to be punished by paying more, not rewarded by paying less. If they never introduced the card, I never would have felt that way. So I stopped shopping there. I'm not going to pay $5 for OM bacon when a "loyalty card holder" only pays 3.00. I would pay $5 if everyone else did as well. So it backfired. Instead of creating a loyal customer, they completely eliminated one.

I also don't feel I'm alone when I say that I don't like to go to the service desk and grab a "weekly ad savings" brochure, then have to take the time to search for coupons on items I want to buy. When I find them, I don't like having to mark them, or rip them out of the flyer, and organize them so that they don't fall out of the cart while I'm shopping. I don't like having to wait for people who hand out coupons to cashiers one at a time by tearing them out at checkout time, and I don't like having to go through the whole process and feel somewhat "cheapened" because I used a coupon in the first place. Maybe it's just me, but I don't think so.

Well consider if, on the other hand, if I could walk into a specific store, go to a kiosk, identify myself and get a printout of discounts based on "what I buy" not what the "store buys in bulk", OM Bacon for example is $3 instead of $5 because I bought it for $5 two weeks in a row. What if it was on one sheet and already organized, and I didn't have to cut anything out. (like a receipt from a cash register, with bar code discounts for easy, fast checkout, unlike coupons) What if it automatically matched up to what was bought so I don't get a $1.00 discount on Breyers Ice Cream if I didn't buy it, but I do get the $2.00 discount on OM Bacon because I did.

That's a scenario under which I would become loyal to that store. (Really because of the kiosk, but the result is the same for the store) This is the future of loyalty...personalized marketing. What if my printout offered me "OM Hot Dogs" at a discount, because I like "OM bacon"? I wouldn't be offened in the least because it's still my choice, but I do have an "relational" option I didn't have before the service. I'm not going to buy "generic" bacon because I like OM bacon. If I can save money buying things I would buy anyway, and it's made that easy, why wouldn't I do it? I would.

This, in essence is what Pay by Touch's new Personalized Loyalty Program is all about. I get a "personalized" weekly ad savings printout that only includes items I buy, and I simply hand it to the cashier at checkout for a quick scan and receive my "personalized" discount.

This collaboration with Green Hills Grocer and Pay by Touch recently won the prestigious Supermarket News 2006 Technology Excellence Award.

Let's take a closer look at this innovative program with some copy from their website:

With Pay By Touch Personalized Promotions, truly individualized, high-impact marketing is finally possible. Our targeting engine tracks each individual shopper's purchase history and serves up relevant offers from a finger-accessed kiosk right inside your store.

At checkout, discounts are automatically rewarded without the need for cards or key fobs. As a grocery store owner, you avoid the high printing and distribution expenses of traditional mass marketing solutions, since Personalized Marketing reaches each shopper - relevantly - and at a fraction of the cost of flyers and FSIs. Waste is virtually eliminated because offers are presented based on what a shopper buys most.

Shoppers can even choose to have each offer conveyed to them over a cell phone, to a Web site, or via email, as well as through the Pay By Touch kiosk placed inside of your store

Click Picture for Larger Image or Download Adobe Acrobat PDF Pay by Touch Brochure below