Hi All.
Just a couple of things in the run up to Christmas…
In this email
A. Christmas Promotions
B. January Promotions
C. Loyalty Offers for Margin Growth and Margin Protection
D. Average Loyalty Shopper Spend and Average loyalty Shopper Visits
E. Loyalty Yield
F. Terminal Upgrades'
A, Christmas Promotions
It's important to take the time now to sit down and plan your Christmas promotions and get them onto a leaflet and into every bag as soon as possible if you haven't done so already. Our recommendation is that you run the promotion at high points value so that any redemptions you get are not costing you as much.
An example could be Full Turkey and Boned and Rolled Ham Normal price €75. Now available for €39 with 2500 points as its probably likely that only a small amount of your customers can qualify for these rewards anyway. So it allows you to say a big thank you to those that do qualify.
I would also run with a range of 4 to 5 other rewards for a minimum of 200 points and aim up to 1750. But if you can do this on added value products or bundled products so much the better i.e. products that can't be directly price compared with the competition. Example Silver Hamper €24.95 plus 1000 points, Hamper Bronze - €19.95 plus 500 points.
I would recommend that you do this products on a cost plus say 10% to 20% margin and then charge whatever points at this stage you feel people will pay example product cost – 3.25 add 20% = €3.90 – so for €3.90 with 200 points you get product X.
My aim with this style of promotion is 1, to get your customers to use up larger amounts of points. 2, It's the one time of the year where they will go for hampers or bundled products. And finally 3, it moves them away from the more costly (re margin) items e.g. 4 chicken fillets for €1 with 250 points. At least on the hamper or bundle products you should be getting a minimum of 10% if not more.
Note: Its essential that you get these onto a leaflet and perhaps on one side of the leaflet they could mark an X beside the bundle they are going for, to give you a bit of notice and the act of completing the form makes it sound good and increases redemptions. Also don't be afraid to use terms like limited to one claim per customer or Limited Offer to the first 50 responses. I would run with this type of promotion from next week.
B, January Promotions
Whilst you are getting your printer to do the leaflets for the promotion above I would get him to do your January into February Reward offer as well. For this I recommend a list of up to 15 products. This is because January is sale time and they expect a list of items. Remember your loyalty customers want to buy from you so give them plenty of choice to use up their points. If the leaflets are issued for this from 22nd of December onwards into every bag that leaves your shop then it keeps your shop at the forefront of the customers mind when January comes.
Let the leaflet do the talking-Sometimes your customer doesn't have time to read all the point of sale posters etc in the shop so the leaflet in the bag is crucial. However a more important point is that generally people accept what you tell them, so when your leaflet says Great January Loyalty Sale at O's Butchers or Just Look At Our Great Loyalty offers for January then they will and they will generally buy into your sale. Its free marketing really and its part of the ongoing education of keeping your customer with you…
With regards to the type of offer you should make I'll leave that up to you as you will know what your customers buy into…
Very Important the 3 items listed below are worth testing in your store perhaps after Christmas and I would be keen to hear how you get on, with the increasing price of cattle these tactics tend to work best on added value or dairy wall products rather than red meat products. I would recommend that you try these for a month and measure the benefit as in units sold etc. Remember it teaches your customer that its more interesting to shop with you as they will find different pricing choices offers.
1. Loyalty Offers Margin Growth - Another method is to put the price of a product up and then give double bonus points on the product using a WOW style flash sticker saying double points. E.g. Rolled and stuffed loin of pork normal price is €7.95. Now put the price to €8.95 and place a double points sticker on it. This action costs you 1% on your points or 3% depending on your calculation but you are getting an extra 12% on the selling price! This should always be on.
2. Loyalty Offers Margin Protection. Reduce the margin cost of a Meat Sale – Instead of discounting products why not run double points promotion. This is always effective after a period of loyalty promotions as mentioned above and is a good tactic to increase footfall. Yet the cost of double points is far less than the cost of discounting product by say 10%. This should always be on.
3. Dual Pricing- IS a great way to get customers to use up their loyalty points and keeps you in charge. Just as in the Margin Protection loyalty offer above you will need flash stickers. E.g. a Chicken is normally priced €7.95 then you place a Flash sticker on it that says OR €4.95 with 300 points. This should always be on.
Average Loyalty Shopper Spend and Visit- Thanks to your support we have a network of butchers shops across Ireland. From this we can learn the average loyalty shopper spend and the average loyalty shopper visits per month.
We have graded the shops into two zones 1, Town High Street and 2, Urban Shopping Centre.
Here are the figures for October Urban Shopping centre Spend per visit €21.45 Urban Shopping Centre Visits per member per month 2.20
Town High Street spend per visit €17.18 Town High street Visits per member per month- 2.83
Loyalty Yield What's Yours….?
1. Only from Customer Connect Loyalty ! We have started to use a measurement which we have devised for our Butcher clients it's called Loyalty yield. Its calculated by Yield. The yield is taken as a percentage of the maximum achievable turnover. Maximum achievable turnover is based on 80% of the registered members of a loyalty scheme shopping 3 times in a month using the average spend of that store. For example a store has 1500 members with an average loyalty member spend of €17 per visit . Max revenue = 1200 (80% of 1500) * 3 (visits) * €17 = €61200
2. Now that you have €61,200 as the maximum revenue achievable then you calculate (by using the CMS panel and location activity Snapshot) your loyalty revenue as a percentage of the max revenue. E.g. loyalty turnover for October say 33,000 therefore your yield is 53.9%
1. Yield is a good measure because it's a combination of visits and average spend so it gives a real reflection of how effective any growth is
Finally, Terminal Upgrades…
As a result of increased security and software updates there are two upgrades to be carried out on the swipe terminals for those of you that have them. These will be carried out over the phone (3 minutes maximum) by one of our technology partners Loyalty Bus.
If anyone has any questions or comments please let me know…Or if you want me to review your offers or leaflets just email me.
Thank you all for your business- Its is sincerely appreciated.
Regards
Finbarr Malone
Finbarr Malone M.Sc. Hospitality
Director
T (353) 1 485 3203
F (353) 1 5261012
M (353) 87 2368956
E finbarr@customerconnectireland.com
Address: Unit 1, Enterprise & Research Incubation Centre,
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