Bon-Ton Department Stores Launches Loyalty, Database Marketing Program

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A loyalty program that The Bon-Ton Department Stores Inc. launched last month targeted to its database of best credit card customers is already bringing in positive results, company officials said on Monday.

The Bon-Ton, York, PA, operates 72 department stores in secondary markets in Pennsylvania, New York, New Jersey, Maryland, Connecticut, Massachusetts, West Virginia, New Hampshire and Vermont. The stores carry a broad assortment of brand-name fashion apparel for women, men and children as well as home furnishings.

The program -- called The Best of The Bon-Ton -- is designed to let 20 percent of The Bon-Ton's active credit card customers know that the company appreciates their support and encourages them to use their Bon-Ton credit cards.

"We've noticed some erosion in our proprietary credit sales over the last few years, and we felt that it was the right time to take an opportunity to say thank you to our top customers, and this is why we've decided to do this program," said John Gleason, vice president of corporate credit at The Bon-Ton. "In addition, while we are trying to increase the percentage of business we do with our best credit card customers, we are also trying to transfer some business from third parties."

Gleason said that if "a customer is in my store and going to buy a sweater, if they pull out their Visa card, it will cost me out of pocket for that transaction. If they pull out their Bon-Ton card, it doesn't. So it becomes a much more profitable transaction, so this is part of the intent of the program."

The program is The Bon-Ton's first loyalty program.

Customers who spend $500 to $799 each year on their Bon-Ton cards qualified for the program and its benefits, and those who spend $800 or more per year qualified for the program's Marquis Member Rewards program.

About 200,000 customers were mailed literature about the program Oct. 23, and the mailing hit homes Oct. 25. These customers also received a new Bon-Ton credit card, The Best of The Bon-Ton credit card or The Best of The Bon-Ton Marquis Member card in the mailers.

The mailer explained the program's benefits, such as an exclusive The Best of The Bon-Ton member appreciation day; a subscription to The Best, a members-only quarterly newsletter; use of a priority service help line; special e-mail updates of events and offers; personal notice of sales via phone or e-mail; and personal check-cashing privileges. Marquis Members receive all of the above plus a thank-you gift and free package delivery twice a year, among other benefits.

Next week, The Bon-Ton will send the first issue of The Best newsletter to its best customers, and it will remind them of their benefits. Marquis members also will receive a preference survey questionnaire in this newsletter -- and via an e-mail message -- that will ask them to let The BonTon know what their category preferences are so they can be alerted whenever there are sales in those departments. The questionnaire is also on the newly designed The Best of The Bon-Ton Web site.

Customer Communications Group, Denver, a full-service marketing agency, created and managed the program. CCG began working with Bon-Ton in March.

"We researched what was happening with the company, found out as much as we could about the customers, and found out what information they have already gathered on customers that we could leverage," said Lane Ware, senior vice president and consultant at CCG.

Ware said Bon-Ton had a robust Harte-Hanks database marketing system that included transactional data, as well as name and address data. CCG identified The Bon-Ton's best customers from this group for the mailing.

In August, CCG began putting together the loyalty program and completed it late last month.

So far, the program is doing well, Gleason said.

"During the last four days of October, we saw a fairly significant lift in our credit services," he said.

CCG also is making use of a cluster system, called Psyte, that was appended to The Bon-Ton's database. The system allows the company to separate customers into about 65 clusters. CCG found that about 80 percent of The Bon-Ton's business came from 19 clusters with titles such as Trailblazers, America First and Empty Nesters.

Gleason said this cluster data would be used more as the program goes forward -- in conjunction with data gathered from the questionnaires -- so The Bon-Ton can send the right targeted offers to the right customers.

Profiling customers is allowing The Bon-Ton to communicate effectively with key customers while strengthening its customer relationships.

"Relationship marketing will allow The Bon-Ton to seize and sustain a competitive edge by developing and expanding relationships with their existing customers," said Sandra Gudat, president of CCG. "This marketing initiative will enhance the already strong relationships The Bon-Ton has with its customers by recognizing their value and rewarding their loyalty."

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