Safeway Puts Executive in Charge of Customer Loyalty

Discussion
Mar 02, 2011
George Anderson

Many retailers talk about customer loyalty and have invested
substantial resources trying to better understand the needs of shoppers and
give them reasons to keep coming back. Safeway, among that group, has decided
it can do even better in that area by elevating one of its own to an executive
position in charge of customer loyalty.

The grocer announced this week that
it had promoted Mir Aamir to president, customer loyalty and digital technologies,
reporting to CMO Diane Dietz. In his new role, Mr. Aamir will be responsible
in leading Safeway’s loyalty programs and overseeing the company’s digital
and mobile loyalty efforts, as well.

“Mir has been instrumental in building Safeway’s loyalty marketing capabilities
and programs that focus on sales growth,” said Ms Dietz in a press release. “By
enlarging his role and consolidating our loyalty building disciplines, we expect
to further grow Safeway’s capacity to delight and connect with shoppers in
an increasingly digital world.”

Discussion Questions: From your vantage point, what are the Achilles’ heels of retail loyalty programs?  Does assigning executive level responsibility for customer loyalty programs increase the chances these weaknesses will be addressed?

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20 Comments on "Safeway Puts Executive in Charge of Customer Loyalty"


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Justin Time
Guest
10 years 2 months ago

This type of emphasis towards customer loyalty and satisfaction seems to be a growing trend in the supermarket industry.

Last month, Great A&P appointed Bob Weidner as the VP-customer experience and space management. He is responsible for the relaunch of their customer loyalty card, my + rewards.

Richard J. George, Ph.D.
Guest
10 years 2 months ago

I applaud the decision to put someone in charge of customer retention. As I have noted in previous comments, I am not a big fan of the term “customer loyalty.” If you want results someone needs to be assigned authority commensurate with the assigned responsibility. The only advice I would give to Mr. Aamir is to focus on solving real customer problems associated with supermarket shopping. Look at all of the compromises that frequent shoppers are confronted with when shopping at Safeway.

The key to customer retention is about adding value. Value is added by increasing the “benefits received” and decreasing the “burdens endured.” It is more than simply price rewards (frozen turkey during the holidays) and more than simply discounts. Solve the real problems and compromises of Safeway’s customers and you will solve Safeway’s customer retention issues.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
10 years 2 months ago
Loyalty programs have been around a long time. The unfortunate thing is most are very expensive to run with little to show for it. Airline loyalty programs are a great example of this. Not only are the programs expensive to run for airlines, but consumer satisfaction related to the loyalty programs is very low? Unless airlines do something drastic to improve the programs they may want to consider dropping them altogether. Would consumer satisfaction for the airline be higher if they did drop the program? Maybe. Retailers run into similar issues. They run loyalty programs that cost a tremendous amount to operate and consumer satisfaction is lower than they would want it to be for all the effort. The simple answer is doing what Safeway is doing. Put a senior person in charge of Loyalty who can focus full time on building a loyalty program that actually rewards not frustrates consumers. If you are not going to take Loyalty seriously it is far better to avoid entirely rather than pretend you care with a half… Read more »
Bill Emerson
Guest
Bill Emerson
10 years 2 months ago
In the current market-share environment, any effort to build customer loyalty is a good idea, if not the most important goal. Making a single executive responsible for building loyalty is, however, not a good idea. Having had a similar responsibility, I can tell you first hand that programs like this involve modifying the company culture. Trying to change a company culture single-handedly (unless you happen to be the CEO) is a fool’s errand. With a single executive in place, the responsibility for success belong to that executive and no one else. A company culture, over time, attracts and retains individuals that thrive in that particular culture. Unless the responsible executive has the authority to change policy and replace individuals that do not believe in or are not competent within the new culture, it is destined to fail. If this is to be successful, not only the CEO but all of the senior management must be fully committed and actively engaged in the success of the program. Otherwise it’s like trying to teach a pig to… Read more »
Warren Thayer
Guest
10 years 2 months ago

Cool. When it’s nobody’s job, nobody really does it. What a great and fun job opportunity!

Joel Rubinson
Guest
10 years 2 months ago

It seems like customer loyalty and digital marketing will begin to merge at Safeway. That is a very, very good way to think about it.

James Tenser
Guest
10 years 2 months ago

I believe most consumer-facing businesses should designate a chief customer officer who is responsible not only for managing personalized marketing and customer experience, but also for ensuring that the shopper or consumer’s perspective is reflected in all major strategic decisions.

Safeway is on the right track by defining this role within the executive suite. Reporting through the CMO–who is responsible for the custodianship of the brand–is valid and appropriate, since brand equity is a reflection of shopper good will.

Gene Hoffman
Guest
Gene Hoffman
10 years 2 months ago

The Achilles Heels of retail loyalty programs are 1)how consistently excellent are you performing in regard to your customers’ known daily desires; 2) how well are your competitors performing in that regard and 3) staying in tune with the ever-changing rhythms in the marketplace.

Loyalty is not a constant. As Oscar Wilde once reminded us, “If you are not too long, I will wait for you all my life.” Appointing an executive to be responsible for customer retention can be beneficial if he/she keeps a sharp focus on customer retention but it also raises a question, “Why is that necessary if your stores are totally tuned into your customer base every day as it evolves?”

Roger Saunders
Guest
10 years 2 months ago

Customer loyalty programs, like sales force incentives, and company bonuses for executives, board members, and associates have to follow a path that:

Is consistent with the company’s objectives, excites the participants, is easy to understand, is easy to administer, and is timely enough to keep associates and customers engaged.

Having a singular leader in charge of this vitally important objective at Safeway makes a great deal of sense. Having an “inside” executive take on the task is ideal, as he understands the culture, strategy, and tactics that have to be dealt with to make the program a success.

The Safeway banners carry a strong position in many of their West Coast markets, Randall’s and Tom Thumb in Texas, Genuardi’s in Philadelphia and Dominick’s in Chicago. Get the internal organization focused on the objective, clearly articulate it to the customer, and Safeway will deliver a winning hand.

Cathy Hotka
Guest
10 years 2 months ago

I’m a longtime Safeway customer (there’s a store 4 blocks from my house) and their loyalty program baffles me. It’s a discount program only, with no specific offers tailored to purchasing history. I don’t get it.

Ed Rosenbaum
Guest
10 years 2 months ago

Here is what I see as the problem with the rhetoric about customer loyalty and satisfaction. Too many companies “talk the talk.” But too few “walk the walk.”

Now we are starting to see more companies beginning to “walk the walk” by investing executive time and money in it. Customer satisfaction will never be a true priority without time and money invested. I am a customer service advocate and train in the field. Without the true buy in from the executive suite it will only be talk. Now we are seeing action. That means the executive suite finally understands the need for the investment. It would be interesting to know the marching orders behind the appointment and investment.

Dan Frechtling
Guest
10 years 2 months ago

Elevating responsibility for loyalty and digital marketing is the right move. The Achilles’ heels of many programs arise out of being too siloed. A few ideas to consider:

Recognizing marketing can improve service. This includes directly such as listening through social media and reaching shoppers through preferred channels. But this also includes indirectly such as leveraging shopper insights to inform assortments, in-stock levels, and pricing.

Differentially rewarding top shoppers rather than offering the same perks to all. Defection and switching rates of so-called top shoppers can be astonishing. Better learning what top decile shoppers want and focusing the organization on relevant value creates business impact.

Partnering with suppliers rather than going it alone. Inviting CPG participation forms a larger team that can work on behalf of the category, helps suppliers make better decisions in support of shoppers, and defrays costs for the retailer.

Title is a start, but this comes together not by position but rather interpersonally. Effectiveness follows the leader who influences with the business unit heads as well as the c-suite.

Richard Gordon
Guest
Richard Gordon
10 years 2 months ago

I guess someone in charge of customer loyalty can assure that there are appropriate tracking protocols in place to help learn about customer preferences and reward customers based on their preferences. But at the basic level, customer service is about the kind of people your business hires, the way they treat people and whether they truly provide great customer service to the customer. If this person can do all that from the corporate office, I’m all for it!

Ben Ball
Guest
10 years 2 months ago
The RetailWire community seems to like the idea of a “customer loyalty czar” and I would agree that there is nothing inherently wrong with it. It is always good to have someone accountable for activity you believe is of value to the business. But there is something inherently wrong with retailer “loyalty programs” in general. Contrasting John Bocuzzi and Cathy Hotka’s comments identifies the issue clearly. John feels airline programs offer no inherent value and should probably be discontinued. My own experience after almost 3 million flown miles in the AAdvantage program is that it is a wonderful program. It certainly treats me very differently than the average flier — and that is meaningful to me. And therein lies the rub. As Cathy Hotka points out, most retailer loyalty programs don’t do that. They are just glorified discount schemes. You have to be in the “club” to get the discount. And even if you aren’t in the club, the clerk will probably swipe the “house card” to get you the discounts at the register just… Read more »
Carol Spieckerman
Guest
10 years 2 months ago

I completely agree with Bill Emerson–executive-level sponsorship will be critical to Mr. Aamir’s success. I do think that Safeway has a track record of connecting people with process so hopefully this appointment won’t be an exception. Lone wolves face a harder hunt.

Ed Dennis
Guest
Ed Dennis
10 years 2 months ago

Loyalty programs are a scam. Period! They aren’t about the customer, they are a gimmick that allows retailers to pry into consumers habits and exploit those habits for their gain. It amazes me that the industry continues to lean on loyalty programs when it’s most successful member–Publix–doesn’t use any type of loyalty program. I am frankly shocked that boards of directors aren’t asking more questions about the viability of these “marketing programs.”

Michael L. Howatt
Guest
Michael L. Howatt
10 years 2 months ago

It’s nice that somebody is in charge but it depends on what Mir does with the position. Integrating loyalty and technology is a step in the right direction, but albeit a complicated one that not too many retailers have gotten right yet. Safeway (who owns Dominick’s in Chicago) has been sending e-mails to their shoppers to customize their deals for a while now. It doesn’t really seem to work as well as planned. Maybe Mir can give it an upgrade and good luck to him.

Larry Negrich
Guest
10 years 2 months ago

The most severe problem with many of the CRM programs is they were established prior to determining the purpose. Mostly the programs are a card/number that gets the customer an immediate discount. Where’s the value for the retailer? A number of retailers (Albertsons, for example) dropped their program completely.

And how about some interaction? Some online retailers (but very few brick and mortar retailers) give the customer an interface that allows interaction with their CRM profile. Relatively simple things such as buying history, customer information, etc., with some editing ability of personal/contact info. By providing this access, the retailer creates interaction, improves accuracy, and gives the customer some ownership–helping to create the relationship.

CRM programs definitely require an executive sponsor. The most efficient way to achieve failure for any major initiative is to not assign executive responsibility.

Mark Burr
Guest
10 years 2 months ago
It would be a great idea if Safeway understood–like most retailers don’t–that they don’t own their customer’s loyalty. They can’t do a ‘program’ for loyalty. A card that has their name on it that gives customers sale prices that they would have gotten otherwise without it doesn’t create loyalty. Customers own loyalty. Loyalty is created by experience, not a program. Loyalty is the result of a customer consistently choosing to enter your doors when they have other choices. It’s their decision–not the retailers decision. Customers consistently make decisions whether or not to exercise loyalty every time they enter and leave a retailers doors (bricks or web). They do that based on experience. Experience is defined so many ways. Customers want a reason, not a program. No program unless it is internally 110% focused on the customers experience while they are there can do that. A card can’t do that. A discount program or rewards program can’t either. What can is how they ‘feel’ about returning over and over again. I don’t see this person assigned… Read more »
dsa clarkson
Guest
dsa clarkson
10 years 2 months ago

The Achilles’ heel is the fact that people in general don’t like information being gathered about them. Is that not obvious?

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