Department store Myer first launched its loyalty program in 2004. Assia Benmedjdoub discovered the scope of its 3.7 million-member initiative at a marketing summit in Sydney.
Betros Brothers is a family-owned greengrocer based in Toowoomba. Unlike the some 800 companies which are now affiliated with the Myer One loyalty program – including Air New Zealand and United Petrol – its reputation probably doesn’t stretch too far outside its catchment area. Myer general manager of marketing Adam Stapleton can’t help but shake his head.
“They do 230,000 in Myer One sales each month which is pretty phenomenal in terms of a greengrocer,” he revealed at a recent advertising, marketing and media summit in Sydney.
“Our number one affiliate is Betros Brothers.”
The department store’s loyalty program first launched in 2004 and currently has 3.7 million members and over five million card holders. When members present their card at Myer tills or those of its affiliates, they earn points which are banked up and converted into gift cards to use at Myer locations. This reach has proved enticing for businesses like Betros: they pay for the points accumulated at their stores.
“Why would an affiliate want to pay for those points?,” Stapleton asked. “Because what’s happened for them is that their average transaction value has gone up and they’ve got access to a database of 3.7 million people. We can actually go out and market to those people and say, ‘you can go into this store and earn Myer One points’. It actually allows them to get a customer they weren’t getting in before.”
In 2006, the department store was acquired by a consortium led by private equity firm TPG Capital. It was during this time changes were introduced to its marketing strategy, with greater emphasis on one-to-one communication. Back then, Myer One contributed to 43 per cent of sales. Today, on the back of sweeping developments and thorough data mining, it contributes to over 68 per cent.
There are 1.7 million email addresses and over two million phone numbers logged in to the database, with information on what a customer is buying, when and how often they visit, where they live, their age and level of spending.
“That just touches on the surface on what type of information we can get out of that program,” Stapleton said. “So what do we do in terms of targeting? We target via the demographics, via behaviour, needs, triggers and motivations. Behaviour is probably the biggest one. It tells you most things because we know when they buy and how often they buy. Then there’s an expectation that if you do certain things, they will actually buy again.”
In line with this, Myer creates and mails specific catalogues targeted at members with a predisposition to buy certain products. For instance, an ‘intimates’ booklet featuring lingerie and sleepwear products was recently direct mailed to 150,000 selected members. This was also backed with a million letter box drops.
“More and more our focus is making that message more relevant to the individual,” Stapleton said. “But we also take the economies of scale [and] get good results out of that broader distribution as well.”
There are also catalogues which are targeted at specific demographics: a recent toy catalogue featured offers across toys, children’s clothing, shoes and more subtly, womenswear. The women’s component was injected to recognise “who is in fact buying the product”.
Back on the behavioural front, the department store included 17 variations on a recent offer aimed at the classic, or slightly older, female shopper. One direct mail campaign offered a bonus $25 gift card, another one offered 1000 bonus shopping credits, another 2000 shopping credits.
“We’re trying to test that if we put in a bonus $25 card, would that work better than 1000 bonus shopping credits or 2000 shopping credits,” Stapleton explained.
Then there are trigger campaigns, used to entice shoppers during special occasions such as birthdays. Gold members are mailed a birthday card and a $20 voucher for instance, while silver members receive a $10 voucher.
Stapleton said that 47 per cent of silver members redeem their voucher with an average $38 spend, while gold members have a 62 per cent redeem rate with an average $65 spend using their voucher. The company is looking to extend this approach to recognise children’s birthdays.
“One unique element of the Myer One program is that you can’t draw down points so when you accumulate enough points, it automatically converts into a gift card and we’ll send you that card,” Stapleton said.
“The key element around that is surprise and delight. So this gift card turns up in your letter box, it comes with a bunch of offers and then you’ll actually spend 3.3 times the value of that card. That is proven over a long period of time.” ¦
For more on the Myer marketing machine, pick up a copy of Ragtrader’s November 19 edition.