THE BIG PICTURE

Leveraging Loyalty Programssalers are increasingly turning to card-based programs as a means to reward, and retain, their most loyal -- and most profitable -- customers.Do you currently offer a card-based electronic shopper-loyalty program?Total Retailers WholesalersYes 51.0% 47.9% 60.9%No 49.0% 52.1% 39.1%Growth prospects for frequent-shopper programs look strong, with more than half of respondents

Leveraging Loyalty Programs

salers are increasingly turning to card-based programs as a means to reward, and retain, their most loyal -- and most profitable -- customers.

Do you currently offer a card-based electronic shopper-loyalty program?

Total Retailers Wholesalers

Yes 51.0% 47.9% 60.9%

No 49.0% 52.1% 39.1%

Growth prospects for frequent-shopper programs look strong, with more than half of respondents planning to either launch or expand a customer-loyalty program.

Do you plan to launch or significantly revamp your shopper-loyalty program in 1999?

Total Retailers Wholesalers

Launch a Program 15.1% 12.7% 22.2%

Revamp/Expand

Program 38.4% 36.4% 44.5%

No Plans 46.5% 50.9% 33.3%

Most respondents agree that their frequent-shopper programs are a worthwhile investment, with retailers expressing higher satisfaction levels than wholesalers.

How would you rate your frequent-shopper program in terms of meeting your expectations?

Total Retailers Wholesalers

Highly Successful 55.1% 60% 42.9%

Moderately Successful 42.9% 37.1% 57.1%

Not Successful 2.0% 2.9% N/A

While the largest percentage of respondents will continue to use frequent-shopper programs to retain top customers, companies are also planning to put a strong emphasis on winning new customers and boosting total gross margins.

What will be the primary goals of your frequent-shopper loyalty program in 1999? (Multiple responses allowed.)

Total Retailers Wholesalers

Retain Best Customers 70.9% 70.0% 73.3%

Win New Customers 56.4% 52.5% 66.7%

Boost Total Gross Margins 41.8% 42.5% 40.0%

Other 1.8% 2.5% N/A

Were the primary goals of your frequent-shopper loyalty program in 1998? (Multiple responses allowed.)

Total Retailers Wholesalers

Retain Best Customers 89.4% 94.1% 76.9%

Boost Total Gross Margins 25.5% 17.7% 46.2%

Win New Customers 25.5% 23.5% 30.8%

Other 2.1% 2.9% N/A

As companies continue to explore the shopping patterns of their loyal customers, the areas that companies pay the closest attention to are frequency of visits, response to targeted promotions and market-basket size. Half of all respondents also examine market-basket margins.

If tracking point-of-sale data as part of your customer-loyalty program, what types of shopper-specific information do you consider most important? (Multiple responses allowed.)

Total Retailers Wholesalers

Frequency of Visits 76.1% 71.4% 90.9%

Response to Target Promotions 71.7% 82.9% 36.4%

Market-Basket Size 69.6% 68.6% 72.7%

Market-Basket Margins 50.0% 51.4% 45.5%

Category Specific Purchases 43.5% 48.6% 27.3%

Brand-Specific Purchase 28.3% 31.4% 18.2%

Time of Visits 13.0% 11.4% 18.2%

Other 2.2% 2.9% N/A