41 the end of irrelevance So what can customer data teach us about being relevant? There are 14m Tesco statements sent every quarter, with around 8m variations, so the majority of customers are getting an entirely different communication from one another. The only reason there are not 14m variations is because Tesco's customer data shows that groups of customers share similar preferences. When a statement goes out, it accounts for one quarter of all postal deliveries a week. Tesco also works hard to create a programme over a year to ensure that its customers aren't inundated with similar offers but get a balanced set of promotions from different categories. Within two weeks of the quarterly statement being mailed, 80- 85% of the vouchers are redeemed. Similarly, over 20% of the coupons are cashed in. And all Tesco stores experience four spikes a year, after the statements are posted. Kroger's statement Kroger also began to mail its loyal customers regularly. Today, Kroger sends out a targeted mailing to its Kroger Plus members on a quarterly basis. And like Tesco, there is a big surge in traffic for a couple of weeks after the rewards are sent out in the mail. Significantly, Kroger has 10m loyalty card customers and 10m variations of its quarterly statement. In France, Casino has managed to target its communications just as effectively. In November 2008, Casino mailed 3.7m different statements to its 3.7m loyalty card customers. Kroger's programme is one of a kind in the US, because it truly rewards what customers do rather than incentivise them for what they don't do. It's been a runaway success. Kroger has received numerous letters from customers impressed by its new personalised approach. A customer called Marsha Boener wrote a letter to the president of Kroger supermarkets. " Thank you for your recent pack of personalized coupons. Obviously, your staff has paid attention to my buying patterns at your grocery stores. At last, a retailer who finally gets it!", she wrote. Similarly, on an internal flight to Cincinnati, on discovering that she was serving Kroger's chief executive, the flight attendant introduced herself to him, thanking him and complimenting him on the personalised statement, saying " we love it, it's the best thing we ever get."
42 Rewarding loyal customers, not enticing new ones Aside from ensuring that customers are given personal, individual vouchers relevant to their own shopping needs, Casino, Tesco and Kroger's loyalty programmes stand out because they make a point of rewarding their loyal customers rather than focusing solely on potential customers. Casino prints ' star' identifiers on loyal customers' coupons. This clearly demonstrates to staff that not all customers are equal and is designed as much to reinforce a culture among employees that recognises the importance of customers, as it is to improve service to loyal customers. It simply links valuable customers with Casino's staff's bonus. To the person on the till it's shorthand for: ' These are the people to protect to win your bonus.' Rewarding loyal customers rather than chasing new ones, represents a sea change in conventional marketing thinking. Old- style marketing has always spent millions of pounds chasing the elusive new customer, hoping that enticing someone new to the brand would drive growth. dunnhumby has proved that it's a waste of money to chase your competitor's customers, better to invest marketing budgets on deepening the relationship and saying thank you to existing loyal customers. Casino, Tesco and Kroger have worked hard to convince their own clients, manufacturers like Coca- Cola and Procter and Gamble, to create coupons for their loyal customers rather than new ones. Alongside the reward vouchers customers are given personalised money- off coupons from their favourite products on their statements. The statements are also specifically designed to give more money back to customers the more loyal they are. The most loyal customers get more rewards than less loyal customers. This ensures the most valuable customers are given the most value in return from the retailer. Relevant advertising As well as enabling brands to send targeted, personalised mail to its customers, rather than spam them with irrelevant information, customer data also empowers brands to create more relevant advertising, leading to satisfied customers. any colour you like as long as it's any colour you like