Direct Mail Sows Solid Relationships (1,098 words)

Before loyalty marketing was all the buzz, a Midwest home improvement retailer, Quality Stores, began working its house-file data to find and reward its loyal customers. That was in 1991, and during the last decade, the Muskegon, MI-based company has used analysis and campaign management tools to grow and improve what's become its 700,000-member ThankQ Quality Advantage program.

During the same period, the 38-year-old Quality Stores has grown, most recently through the 1999 merger with Central Tractor Farm and Country, which had been in business 60-plus years. The combined company now has 340 locations in 31 states and describes itself as a niche retailer for rural and country farmers and their families, selling agricultural items such as fencing, feed and tractor parts, as well as hardware, lawn care, automotive and pet products, work clothes, and seasonal goods. The average store has 25,000 to 30,000 square feet of selling floor space.

Customers who sign up for the free, voluntary program provide very basic information such as whether they farm, have pets, what farm animals they own, etc. (The company does not rent its list.) The information is set up in a household-based database that is then supplemented with point-of-sale transactional data.

The goals of the loyalty program are two-fold, as Customer Loyalty Manager Karen Stapel notes: identify cross-selling opportunities and build stronger relationships with its customers.

Cross-selling: Need Some Horse Feed with that Tack?

Say a shopper has told Quality Stores that he owns a dog kennel but transaction data show he hasn't bought any dog food there. "That's a big opportunity for add-on sales," notes Stapel.

For several years, Quality Stores has been using Archer Software from NuEdge Systems (formed early in 2000 with the merger of RTMS and Customer Insight Company) to help it identify cross-sell opportunities and then communicate more effectively with members of its loyalty program.