Safeway Canada Tiers Up New Loyalty Program
Mimicking the tiered rewards programs of airlines, Canada Safeway last month quietly launched a loyalty program focused on just its best customers.
Spending more than $125 each week over a six-month period qualifies a customer for the SafewayClub Elite Customer program. Perks include a five cents-per-liter discount off gasoline, 10 percent off roses and deli sandwiches, cash back up to $300, and refunds without receipts.
"The program recognizes our very best customers similar to those who may use a hotel, airline or car rental company with great frequency," John Graham, Safeway’s director of public affairs, told the Winnipeg Free Press, which broke the story.
Perhaps the most extraordinary feature is that the store manager’s cellphone number is given to Elite Customer members as a backstop to ensure any service provided meets expectations.
"If there’s ever a question about a product or one that you’d like to see brought in or a last-minute cake order that you’d like to make, we want you to have easy access to the management of your Safeway store to ensure we always meet or exceed your expectations," Mr. Graham said.
The program comes with increasing evidence that a retailer’s most loyal customers, often encouraged by rewards programs over the years, account for an inordinate amount of sales at their favorite stores.
Speaking to The Wall Street Journal in an article around discount-driven rewards programs, Keith Jelinek, director in the retail division of AlixPartners, said 15 percent of a retailer’s most loyal customers can account for as much as half of its sales.
Keith Colbourn, vice president, global loyalty practice leader at dunnhumby, was quoted in the same Journal article estimating that it takes between 12 and 20 new customers to replace a lost loyal customer.
Reviewing the launch for Colloquy.com, Sharon Goldman likewise raved about the potential for other chains to use tiered-based loyalty models. She wrote, "It’s finally a move towards using the data and segmentation to reallocate limited rewards and communications resources within their huge membership base based on calculations such as lifetime value."
- Frequent grocery fliers get ‘elite’ status – Winnipeg Free Press
- Why Pay Full Price? – The Wall Street Journal
- Safeway borrows a page from the travel industry – Colloquy
Discussion Questions: What do you think of the SafewayClub Elite Customer rewards program? Can the tiered loyalty program model used by airlines, hotels and car rentals work at retail?