Raley's Grocery Chain Adds Social to the Loyalty Recipe
The Dangers of Loyalty
Loyalty programs can seem like the ultimate win-win situation for marketers and customers. While marketers obtain more customer data to enhance offers and targeting, customers redeem rewards for being faithful patrons. Adding social and content to loyalty programs can up the ante by driving advocacy, engagement, and reach.
When Thomas Hutchison joined Raley's Family of Fine Stores, a privately-owned grocery store chain in California, last March, the director of CRM and analytics put establishing customer loyalty at the top of his to-do list. Raley's initiated its new Something Extra loyalty program in September and teamed up with BzzAgent, a social marketing sector of analytics and advisory organization dunnhumby, to tie in social and advocacy components with Try-It, an online advocacy platform for grocery stores, to form Something Extra Try-It in November.
“Our goal with Try-It is to just really take programs, products, or services that we have in our stores that we think are great, but [find] difficult to market all the great things about them in other media,” Hutchison says.
Customers already involved in the Something Extra loyalty program can sign up for Try-It on the Raley's site. Try-It members are invited to sample products and then are encouraged to share their product experiences via blogs, social networks, site tools, or offline conversations. Consumers then receive a score for their share based on reach and engagement factors, such as comments, likes, and re-tweets. The higher the score, the more likely that consumer will be invited to participate in future campaigns and given deals. The lower the score, the fewer campaign invitations the customer receives.
“We're bringing [loyalty] into the social media world where advocacy is as much the currency as loyalty,” says Chip Terry, SVP of product and engineering of BzzAgent.
In addition to receiving deals, Terry argues that the platform provides a way for the customer's voice to be heard and is an example of being where the customer is at all times.
“We know most of our consumers are on social now, so moving into social makes sense…but just doing Facebook likes isn't doing social justice,” Terry says. “Engaging with people in a two-way conversation that's relevant to them does great things for the consumer and, therefore, great things for Raley's.”
He adds that retailers benefit by pinpointing consumers' shopping behaviors and channel preferences as well as by identifying both loyal customers and influencers.
Consequently, Raley's is making a concerted effort going after high-priority customers: members with over 300 Facebook friends and who are members of Something Extra Try-It. He calls this segment: “agents” and hopes that they will develop into influencers.
Besides marrying loyalty with social, Try-It also has a heavy content marketing component. For instance, Raley's pushes out personalized recipes and healthy eating tips, based on past shopping behavior.
“We can see: are you a watching-your-waist-line kind of consumer? If you're that watching-your-waist-line kind of consumer, we'd rather get you some healthy goods, [and] we're much more likely to give you content or introduce you to products that are healthy versus the next version of Doritos,” Terry says.
After incorporating Try-It, Raley's found 11,000 agents within the first week of activation; its initial goal was to accumulate 10,000 agents at the end of the year, Hutchison says. Currently, Try-It has 11,500 agents.
But the work isn't done. The next step for Raley's is to maintain high levels of consumer interest. In fact, the grocery store is so wary of accumulating too many new members, reducing the customer experience, that it has temporarily cut back on extending campaign invitations to new agents.
“[The number of members is] great, but the thing is we want to make sure [is] that all of our agents have enough campaigns to be a part of, that they stay actively engaged, and that they're coming frequently enough that they can stay actively engaged,” Hutchison says. “That's why we cut off the pipeline of new members.”
And while he says Raley's hasn't established any officials rules in terms of cancelling Try-It accounts, he says it is possible for those with low scores to stop receiving campaign invitations. Hutchison adds that Raley's has already started the weeding-out process.
“…We're going to continue to have the cream rise to the top and start to wriggle out some of the other folks and try and get them out of the program so we'll [be able to] make room for new ones and continue to get the best set of agents that are most effective.”