Cross Promotions Work for Giant Eagle and Citizens Bank

Discussion
Mar 30, 2011

If you ever want to see what’s possible when a retailer
and a bank really work together to cross promote and build their respective
businesses, look no further than the Giant Eagle and Citizens Bank relationship.
At last week’s
Loyalty Expo conference in Orlando, Trevor Knott of Citizens and Katie Scholl
of Giant Eagle told the story and an impressive tale it is.

The two companies
have been working together for 21 years and have 64 joint locations. Giant
Eagle has 228 supermarkets and 160 convenience stores in Pennsylvania, Ohio,
West Virginia and Maryland, operating under five banners. It is ranked #28
on Forbes’ list of top U.S. private companies. Citizens Bank
operates in much the same trading area, so the fit is natural. But Giant Eagle
and Citizens have gone beyond the traditional tenant-landlord relationship
to operate in-store banks as a perimeter department within the supermarket.

Giant
Eagle’s goals for the partnership is to increase shopper frequency
and basket size, while moving secondary shoppers to primary ones. Citizens
looks to acquire new households, deepen existing relationships and decrease
attrition. Giant Eagle counts one million households as customers, while Citizens
has 259,000 in the same trading area.

Roughly 192,000 households are customers
of both companies, so it would appear Citizens has more to gain in terms of
potential new customers. Interestingly, neither company views it that way.
Giant Eagle sees benefits with joint customers making more visits to its stores
than average shoppers while spending more per trip, as well. The same individuals
carry higher loan and deposit balances driving revenue for Citizens.

The two
companies spend a lot of time working on the joint value proposition and seem
to be in alignment on core values and strengths, brand attributes, voice, target
audience and business objectives. The parties have succeeded in establishing
a single-minded strategy and consistent call to action. Giant Eagle and Citizens
work to make sure one and one equal more than two. The companies publish a
partnership guide for store teams on the program, bring store and branch managers
together twice a year and reward them both for successes.

The companies often
conduct joint promotions such as a recent five-week effort offering customers
a $30 Giant Eagle gift card if they opened a new personal checking account.
Nearly 2,900 incremental checking accounts were opened, achieving a 19 percent
lift over a control group and a 28 percent over the status quo. Another promotion
had bank employees sampling food products in Giant Eagle stores during a "Dinner’s
on Us" promotion recently.

Citizens pays Giant Eagle rent for its in-store
branches and the retailer also earns bonuses based on deposits. The two companies
share results in meetings between their chief financial officers.

The keys
to this relationship seem to be that the companies are a natural fit, both
geographically and culturally, and top management is 100 percent committed
to going the extra mile to make sure the banking "department" is
treated the same as all other departments, if not better.

Discussion Questions: What is your analysis of the relationship between Giant Eagle and Citizens Bank? Is it typical/atypical of retail/bank relationships? Do you see potential for these types of partnerships between retailers and other service companies?

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10 Comments on "Cross Promotions Work for Giant Eagle and Citizens Bank"


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Max Goldberg
Guest
10 years 1 month ago

In a world of mega-banks and national grocery chains, this relationship is unusual. It’s the marriage of two regional players who match up geographically and temperamentally. Kudos to both for sustaining this 21 year old partnership.

Gene Hoffman
Guest
Gene Hoffman
10 years 1 month ago

The relationship between Giant eagle and Citizens Bank is a practical business venture. Other chains also have such relationships with customer awards: Kroger with Fifth Third Bank, CUB with TCF, etc. The potential is there for other respected retailers and respected service organizations.

Liz Crawford
Guest
10 years 1 month ago

I think that these incentives may be a kind of pilot…new checking accounts may be opened, but is this better or worse than which alternative marketing programs? To me, the bigger question may be answered qualitatively: what is the impact (pre/post) on brand imagery for both brands? Does one brand benefit more than the other? Are characteristics between the two contagious? These are the true business issues at stake from my perspective.

Dan Frechtling
Guest
10 years 1 month ago
Looking at stated goals, Citizen’s has more to gain provided operating costs are in check. Citizens, the smaller of the two, improves acquisition, retention, and creates more cross sales. Citizens added 19% in checking accounts from the $30 gift card promotion. Attrition likely declines as Citizens creates a structural advantage around visit convenience, particularly with extended hours. And the mere availability of a bank branch has been shown to increase cross-sell. Can Giant Eagle grow frequency, basket, and overall spend? I question whether a co-located bank actually increases trip frequency. Stores already have cash machines. How many more shopping trips are generated after taking out mortgages? As for basket and overall spend, Giant Eagle is trying providing extra fuelperks! discounts to Citizens debit card holders to promote gasoline purchases. Omitted above is operational costs and revenues. Giant Eagle clearly gains from rental income. But will Citizens’ lower branch opening costs and revenue gains above offset the traditionally smaller deposits and extended hours of in-store branches? Finally, there’s the soft side. Giant Eagle becomes even more… Read more »
Ed Rosenbaum
Guest
10 years 1 month ago

I applaud both Giant Eagle and Citizens for staying the course and letting the venture lead to the success they are having.

Publix and Bank of America had such a venture in many South Florida locations. Then one day it was gone. No explanation that I recall. Just closed the space and replaced it with magazines.

Roger Saunders
Guest
10 years 1 month ago

Giant Eagle and Citizens demonstrate a successful model that virtually all Retailers can capitalize upon. Unfortunately, most don’t venture down that path. They are missing significant Conversion, Retention, Acquisition, Frequency, and Ticket (C.R.A.F.T.) opportunities.

Data Integration strategies between cooperating concerns can and do lead to a WIN, WIN, WIN occasion–retailer, service provider, customer.

Retailers know about their customers when they are in their store, transacting business with them. What far too many miss out on is “What is the consumer doing when they are away from their store?”

By closely listening to consumers’ attitude and behavior patterns–not just within their own store, but in the consumers’ life–retailers can mine opportunities to provide other opportunities and services for customers. There will always be services needed by those customers that are “outside the knitting” of the merchant. However, knowing the need, permits retailers to help a customer solve a problem/find a solution.

That helps retain customers, builds their frequency of visits, and boosts ticket. Find the collaboration–it works for all.

Joan Treistman
Guest
10 years 1 month ago

Too often companies don’t have the opportunity to explore and learn from the best practices of other organizations. By combining forces, Citizens and Giant Eagle not only multiply their marketing power, but also their expertise based on individual experiences. No doubt the metrics will guide future joint initiatives but the collaboration holds even greater value for their independent and individual programs.

Odonna Mathews
Guest
Odonna Mathews
10 years 1 month ago

Cross promotions and cross merchandising opportunities are almost limitless, depending on the creativity of the organizations involved. Measurements are key.

The examples cited are excellent and should be an incentive for other retailer partnerships. It’s hard but not impossible to have one plus one equal more than two. This requires more than a short term investment. My guess is that this long term partnership has a lot to do with CEO compatibility and accountability.

Warren Thayer
Guest
10 years 1 month ago

No surprise that Giant Eagle is involved in something like this. It’s always been a real innovator, and that has served it, and its marketing partners, very well.

Phil Rubin
Guest
10 years 1 month ago

It’s always refreshing to see a genuine strategic partnership that is good for the partners and good for customers. When partners recognize that and work together for such benefits, success comes relatively easy.

There are at least two other aspects of a grocery retailer and bank partnership: one is habit, given the frequency of grocery shopping, and the other is the fact that most customers do not like their banks yet do feel strong preference towards grocers.

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