Thank Q Very Much

Do you own pets?”

“How much land do you own?” “Do you farm crops or livestock?”

It’s not an awkward rural first date but rather the beginning of another beautiful relationship – one between farm and country retail chain Quality Stores and its most frequent customers as they sign up for the Thank Q loyalty club.

Muskegon, MI-based Quality uses data collected in the program to segment customers for targeted offers to its 200,000 club members, based not only demographic information but previous purchase history, tracked using Archer software from Waukesha, WI-based RTMS.

CHERRY PICKING

Roughly 15 times over the past year, Quality Stores divided Thank Q customers in 16 test markets into unique marketing segments and mailed them targeted promotions. For most of the mailings, Quality segmented identified customers into two to four groups. For example, a series of livestock feeds mailings identified potential purchasers of the product, then segmented them by four: those who had been good purchasers of the product for two years, those who had purchased it in year one but not year two, those who had the right demographics but had never purchased it, and finally sporadic buyers or “cherry pickers.”

Four different mailings were produced – one for each segment – with the highest incentive going to the group that had the right demographic but had never purchased a livestock feed, says Karen Stapel, Quality’s customer loyalty manager.

HI MOM

Quality Stores took what it considers a giant step toward one-to-one last May with a Mother’s Day piece that was six times as segmented as its typical direct mail campaigns. The mailing was targeted specifically at the store’s large number of male customers, taking into consideration men’s reputation as last-minute shoppers.

“We know they’ll shop us for Mother’s Day,” says Stapel, noting that while general retail chains might focus on flowers, candy or clothes, Quality put the spotlight on outdoor items that usually interest women, such as lawn and garden furniture, planter bushes and hanging baskets.

For the Mom’s Day offer, Quality considered such customer demographics as number of acres owned, whether they farmed crops, and their distance from the store, and then merged these with purchase records.

The mailing’s centerpiece was a newsletter personalized in several spots with the customer’s name. Each newsletter contained six out of 12 possible promotional offers, which were determined by purchase history and demographic profile.

To create the piece, Quality’s customer support center worked closely with RTMS advisers, plus a printing team at Xerox’s Retail/Wholesale Special Projects unit, and a design team from R.C. Productions. Xerox took Quality’s marketing data, merged it with R.C.’s creative layout, and produced the printed mail piece.

“We divided our list into 25 segments,” Stapel says. “We literally created 25 pieces on the fly with one basic template.”

RTMS executive vice president of consulting Dave Schneider calls the mailing a “one-to-one individualized print campaign,” an argument seconded by the RTMS case study on the Mother’s Day campaign.

The final results were impressive: The promoted merchandise recorded a 51% lift in sales per name mailed, a 28% incremental lift in response rate and an 18% incremental lift in average dollars spent per customer. Total store activity increased incrementally by over 8%.

NO RUSH

With such success, one would assume Quality would rush to produce another. But, notes Stapel, the company has been involved in a year-long company integration following the merger of Quality Stores with the Central Tractor Farm and Country chain, which also owns Country General stores.

The integration has required a subsequent merger of three separate loyalty programs, a process expected to be completed by this spring. When that’s complete, Quality will be able to track point-of-sale purchases for all of the loyalty program members of its 400 stores, which are concentrated in the Midwest and will operate under the Quality Farm & Country name. At that point, membership in Thank Q is expected to swell to 900,000 customers. And then…oh won’t there be a lot of happy Moms on Mother’s Day in the Corn Belt.