ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Wednesday, March 5, 1997 TAG: 9703050049
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
COLUMN: marketplace
SOURCE: MEGAN SCHNABEL
Just when you thought you couldn't possibly cram another slip of paper into your bulging wallet, Harris Teeter is offering a new frequent-shopper card.
The Very Important Customer program - VIC, for short - was rolled out nationally last week. It's now available in all of the chain's 135 stores. If you had a Harris Teeter customer courtesy card, you've automatically been upgraded to the VIC card.
The snazzy red VIC card is a cut above the old ones, which allowed you just to write and cash checks. The new card does all that. But its big selling point, according to the company, is that it can save you money.
Every week, Harris Teeter will offer VIC discounts on selected groceries, both national brands and private-label products. The products and the discount amounts will change from week to week, and you'll have to have a VIC card to take advantage of them.
Using the card also will enter you in sweepstakes and other contests.
So what does the company get out of the deal? Plenty. Lots and lots of marketing data, for one thing. Every time you use your free VIC card, details of your purchase will be recorded in the company's database.
By tracking what we buy, Harris Teeter not only can see what sells to what population groups, but it can direct manufacturers' promotions to the customers who will benefit the most. If you buy a lot of Pampers, for instance, you might be selected to receive coupons for baby powder - or for competitor Huggies.
"We're trying to target the right offer to the right customer," said Shannon Kelly, promotions assistant at Harris Teeter's Matthews, N.C., headquarters.
VIC discount items are being advertised at the store and in Harris Teeter's weekly newspaper circulars. Bonus discounts for VIC customers will be sent through the mail. The most active VIC customers also will receive a quarterly newsletter advertising upcoming special deals.
The company keeps all the information it gathers - both from VIC applications and purchases - confidential, Kelly said. None of the information is sold to or shared with other companies.
In addition to collecting a valuable mass of market info, the chain also stands to inspire customer loyalty - and increased sales - with the new program.
Grocery chains have relied for years on coupons and weekly price cuts to attract customers. But such promotions encourage customers to shop around, to pick up a few specials and leave, not to return until another price break comes along.
Frequent-shopper programs, on the other hand, encourage return visits. The Food Marketing Institute, a national trade group, reported that customers enrolled in frequent-shopper programs tend to spend more - up to 33 percent more each week - and remain more loyal to the grocer than average shoppers.
In various forms, frequent-shopper programs have been around awhile. Stores such as Hecht's, Belk and Five-Boro Bagels offer buying clubs that let customers get a pair of pantyhose or a sandwich free after buying 10 or 12 of the same. Video rental cards are a version of the customer loyalty card, as are membership cards at places like Sam's Club.
According to a survey conducted last year by the Food Marketing Institute, only about a third of the nation's grocery stores offer some kind of frequent-shopper program like VIC. National chains including Food Lion and Harris Teeter, as well as smaller regional companies such as Tom Thumb and Vons, now offer customer loyalty programs. Another third of the survey respondents told the marketing institute they were planning to start such a program in the near future.
Harris Teeter says the VIC program already has more than 900,000 members. That figure includes all the upgraded courtesy card customers.
LENGTH: Medium: 73 lines ILLUSTRATION: GRAPHIC: Chart by staff: Why grocery stores start customerby CNBloyalty programs. color.