True Value shoots for 350 stores in web-based loyalty program by year`s end

TruServ Corp., the cooperative that includes True Value Hardware stores, expects 350 stores to be participating in a web-based loyalty program by year’s end, John Schmidtke, manager of targeted marketing, reports. After tests in 20 stores last year, 150 stores have launched programs and another 100 have signed commitments. Schimdtke believes the program has the potential of attracting 2,000 of True Value’s 5,400 retailers.

The loyalty program involves rewards of one point per dollar spent, with each collection of 250 points redeemable for a $10 reward certificate. Members also get discounts on selected merchandise.

Under the program, from database and direct marketing company Insight Out of Chaos, local stores sign up customers to a loyalty program. Customers identify themselves with a loyalty card or keychain fob as program participants whenever they buy something. Insight Out of Chaos gathers loyalty information from True Value point of sale terminals every night and updates participants’ status. Store owners then access a web site to find out the status of their customers and to devise e-mail and direct-mail marketing campaigns based on the behavior of their loyalty customers.

The key to making the program work is the web. “We realized we needed an infrastructure that will allow us to scale this and manage on a day-to-day basis,” Schmidtke says. “Stores access the web site to order supplies, understand the performance of their customers and troubleshoot problems without requiring us to have an entirely new department at TruServ.”

Store managers log onto the True Value Rewards web site and access their own home page. They can change information about their stores, such as hours of operation, look up individual customers, run reports to learn who their best customers are or who bought certain products, create their marketing programs and perform other functions related to the program. “Without the web, we would not have nearly the robustness that we have with the web,” Schmidtke says.

Stores have benefited in several ways from the program, Schmidtke reports. Card-carrying loyalty customers have a 70% higher average ticket than the typical customer. Store sales are up significantly at participating stores. A store owner who wanted to open a second store used the geographical data about best customers to choose a location. And a store in Oregon that was seeking bank funding used the database of 1,000 customers as an asset in acquiring financing, Schmidtke reports.

“The blinders have come off for the first time,” he says. “Stores really know their customers.”