Progressive Grocer Independent

JUN 2016

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June 2016 | Defining the Independent Market | 33 O f all of the emerg- ing technologies and marketing approaches taking root in stores, nothing is more com- plex or controversial than loyalty marketing. From one perspective, loyalty marketing is obviously the best way to focus marketing budgets on the most important customers, to build business among those consum- ers who already support the stores and to drive proftability while simul- taneously improving customer service to the best consumers. On the other hand, many retail- ers, in the food business and in other areas, have invested tens of mil- lions of dollars in loyalty marketing only to fnd that the return on these investments is far from a sure thing. In fact, while some retailers credit their loyalty marketing programs with driving sales and profts, others have concluded that the efort is a big waste of time and money. Te complexity and high cost often associated with such programs often drove independents away, leaving chains with the marketing budgets, big stafs and technological expertise needed to undertake this sort of project. In fact, as little as fve years ago, I would have completely agreed with the notion that inde- The Technology Pragmatist pendents should let the "big guys" play with something as costly and complex as loyalty marketing. But today's reality is such that the high upfront costs of building a loyalty program have greatly diminished, and the ongoing resources needed to operate a program also have dimin- ished signifcantly. Diminished Costs Creating such a program used to in- volve the issuance of loyalty cards and assembling a loyalty database. Tese days, loyalty programs have no need of a physical card — customers can use their cell phone numbers as their IDs, which can be texted or entered into the POS system. Te whole pro- cess can be managed on a computer or smartphone, and by asking customers to enter their own data, you save a huge amount of cost and get a more Technology has made such programs more viable for independents. By David Diamond LOYALTY MARKETING Comes of Age With all of the technological advances, the best news of all is that loyalty marketing is now affordable and achievable for independent retailers. LOYALTY PROGRAM

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