Browsing articles from "July, 2014"

Walmart Gets Into the Loyalty Program Arena

By Mike Gorun  //  Uncategorized  //  No Comments

walmart-superRecently, AdAge reported that Walmart is starting a loyalty program. Based on their price-match guarantee, Walmart is launching an app named “Savings Catcher,” which consumers can use to receive refunds for items purchased at Walmart that have been found for a lower price at a competitor. While many stores have price-match guarantees, this app ups the ante. In the past, customers were responsible for discovering the lower prices and then bringing a physical ad into a Walmart for the price match. This, of course, required time spent by the customer researching their purchase online. Unless a customer is aware of a lower price, or discovers one accidentally, it is unlikely many will spend the time researching all of their purchases just to save a few dollars. “Savings Catcher,” however, doesn’t require any time for a consumer to take advantage of these savings. According to the article, all shoppers need to do is scan a receipt for the items purchased at Walmart into the app. A third-party tracking firm will then discover the lower prices for them and refund the savings to the consumer in the form of a Walmart gift card. Many consumers already view Walmart as having low prices, which is why consumers flock to the stores in droves. The addition of this loyalty program is likely to further instill this into consumers and attract even more customers.

While a businessperson might question how the “low price leader” that sells on slim margins can afford to do this, the answer is actually a very simple one. Data.

By participating in the program, consumers are trading information. This information will allow Walmart to encourage shoppers to buy even more items from them using a pretty unconventional approach. Most companies use loyalty data to increase marketing effectiveness through targeting. Walmart, however, says they aren’t going to. According to the article, Walmart is going to give consumers access to complied loyalty data that will let the customer search and sort their receipts; get pie charts breaking down how they spend their money; generate ‘predictive shopping lists;’ keep a running tab of in-store purchases to stay on budget; get notifications when there’s a manufacturer coupon available for an item on their list; or get the best-priced bundle of items within a pre-set budget. Senior vice president of e-commerce and mobile for Walmart said, “We found the best shopping list is one you don’t actually have to create.”

It’s certainly an interesting concept. Whether Walmart shoppers will embrace the many features available within the application to dictate their shopping lists remains to be seen. It’s certainly easy to see how the pricing guarantee and automatic refund feature would be attractive, not only to Walmart’s existing customers, but to new customers. If this program is proven to work as described, and the third-party pricing comparison is accurate, it could instill even more confidence into shoppers that Walmart really is where they will save the most money. And not just on sale items, but on everything. And that is a pretty powerful incentive for people to shop at Walmart.


Using Data to Drive Tangible Results

By Mike Gorun  //  Uncategorized  //  No Comments

Gear on abstract  technology background[This is part 6 in the “What’s the Big Deal With Data Anyways?” series. Click here to read part 5]

The whole goal of this series is to help dealers understand that there is no need to be afraid of your data. It is one of the most valuable assets a dealership has and, when used correctly, can increase revenue by improving the effectiveness of any marketing.

Previously in this series, we covered segmentation of the DMS and CRM database. If you view those segments as control groups, you will be in a better position to view the real ROI of your data marketing efforts. Measuring ROI is not easy. But you don’t need to be a statistician to succeed. You simply need to measure certain elements for your data marketing efforts and compare them to customers who are not part of those efforts, segments or control groups.

In a dealership, the four most important metrics for measuring ROI are:

  1. Average customer-pay RO amount for the segment customers vs. the non-segment customers.
  2. Annual visit frequency for the segment customers vs. the non-segment customers.
  3. Annual retention rates of the segment customers vs. the non-segment customers.
  4. Vehicle repurchase activity of the segment customers vs. the non-segment customers.

You don’t have to rely on third-party marketing companies to take your data and tell you how to market. They generally lack knowledge about how to measure a targeted marketing campaign’s results. Therefore, you’ll never know if your efforts are succeeding.

The most effective way to measure ROI, program lift and retention is to assign every customer to a type of control group. Control groups can be determined by any number of qualifiers such as: make or model, mileage, distance from the dealership, lease customers, pre-owned customers, parts customers, time elapsed since purchase or any other segments that could be used in targeted campaigns.

While this may sound like a daunting task, believe it or not, most dealers are well on their way to accomplishing this already. Many assign every customer a unique customer ID number in service and, at times, in sales. This ID number is stored in a dealer’s DMS as a unique identifier for that customer. The dealership uses this ID to track activities such as vehicle service records.

To segment your database you simply need to add a check digit to the already existing customer ID number. This number appends the customer ID in the DMS. By simply adding multiple number identifiers, customers can belong to a single group, or to multiple groups.

Once your customers are segmented into the appropriate group(s), your DMS’ report writer function (or equivalent) will allow you to run simple reports that show exactly which groups and customers are responding the most, spending the highest and retained the longest.

When looking at the four metrics listed above, it becomes easy to see which subsets of customers are performing the best in each category. This can assist in identifying where to spend your marketing budget. It has always bothered me when I ask a service writer or manager which of their service marketing efforts are working the best. I find that their responses are typically based on that month’s coupon redemptions. This type of visual performance tracking of service marketing is a recipe for wasted marketing dollars.

Throughout this series I have been touting the benefits of customer segmentation and the positive effect it can have on your marketing efforts. Think about looking at each group before you commit to any marketing campaigns, regardless of the content. It is so important to determine ahead of time which groups will receive the message based upon their past performance. How many times do we send, at our expense, communications to customers that either live too far from the dealership, or don’t have the vehicle anymore? This type of marketing is almost guaranteed to get no response, yet it is such a common practice in our industry. I see it almost every time I step into a dealership. Insist that your marketing group, regardless of if internal or a third party, is responsible for marketing the correct message to the correct group. It has been proven over and over again in almost every type of business that smaller, highly target messaging will create a much better response than any unrelated mass approach.

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