Commentary & Analysis
Inside the Mind of the Ideal VDP Client
by Heidi Tolliver-
By WhatTheyThink Staff
Published: March 24, 2006
by Heidi Tolliver-Nigro March 24, 2006 -- Earlier this month, I had the privilege of writing up a VDP case study that was particularly exciting. It involved Super Stop!, a major convenience store chain headquartered in Meridian, Mississippi, with stores throughout Mississippi and Alabama; Graphic Printing & Communications (GPC), its printer in Meridian and the local distributor for Pepsi brands. If you've ever wondered what the ideal customer for VDP looks like, Super Stop! just might be it. The results were phenomenal for a variety of reasons. First, the program involved a national brand. Second, the program was so successful. Third, Super Stop! is incredibly forward-thinking when it comes to building and utilizing its extensive database on customer behavior. And fourth, the printer had the foresight to deeply and fundamentally embrace the use of databases to drive the future of print. In developing the case study, I spoke with Kim Gianakos, the Image Director at Super Stop!'s in-house agency, who spoke to me frankly about the company's marketing philosophy. If you've ever wondered what the ideal customer for VDP looks like, Super Stop! just might be it. I want to share a little bit of that with you. Super Stop! recognizes that, when it comes to convenience stores, the product mix and retail model is pretty much the same. What differentiates one chain from the other are its people and its service. To boost the latter, the chain initiated a customer loyalty program called Seymore, named for its colorful fish mascot, Seymore. Like other programs, the Seymore program offers "buy so-many, get one free" and discounts on a variety of merchandise, as well as other purchase incentives. Recently, when the program reached its one millionth dollar in redemption savings, it gave away $10,000 to the lucky winner --and all she did was redeem her coupon for a pack of crackers! If You've Got It, Use It Unlike other loyalty programs, Super Stop!'s program is aggressive in gathering information from customers. When customers sign up for a Seymore card, they are asked for a variety of demographic information. The program then tracks all of their purchasing behavior with the card, including what they buy, at what location, and when. This gives the company a wealth of data over time that it can use for both its own marketing and co-marketing with vendors. One of Super Stop!'s first VDP campaigns was designed to motivate customers with low or zero usage of their Seymore cards. The chain identified these low-volume participants and sent them VDP mailers addressing them by name and offering them a free coffee, fountain drink, or $1.00 off a tank of gas if they would come in and use the card. Not only was the response rate to that campaign extremely high --12 percent, and growing -- but according to Gianakos, card holders are still bringing coupons into the store, even though the promotion was run in 2004. "There was no expiration date on the coupons, so people are hanging onto them," she says. "That really says something." Hitting the Target Demographic Recently, Super Stop! ran a program in conjunction with the local distributor of Pepsi products, which wanted to boost sales of Pepsi's new SoBe brand, No Fear, in convenience stores. The distributor knew its target demographic --consumers under the age of 30-- so Super Stop!'s printer partner, GPC , pulled the target database and created a mailer with a discount offer exclusively for Seymore cardholders. The response rate to the campaign was a whopping 22 percent So the chain knows a lot about its customers and, because it tracks individual purchases, often knows more about the behavior of national brands' customers in convenience stores than the brands do. Not only this, but through the campaign, the marketing partners discovered something extremely valuable. Eighty percent of the respondents were male. Typically, men under 30 are extremely hard to reach using traditional marketing methods, so the fact that VDP was so successful in motivating these participants was an absolute thrill for everyone involved. Part of what makes Super Stop!'s Seymore program so valuable is the extremely high level of participation, up to 50 percent in some stores. (Clearly, stores along highways and the like will have less loyalty card participation than stores accessible by locals.) So the chain knows a lot about its customers and, because it tracks individual purchases, often knows more about the behavior of national brands' customers in convenience stores than the brands do. "If we wanted to, we could send you out a VDP mailer, saying, 'Hi, Heidi. You signed up for your Seymore card on October 15, 2005, when you stopped at the Super Stop! on such-and-such a street at 3:42 p.m., when you purchased a pack of Freedent gum. And you've bought a cup of coffee, a donut, and a newspaper every day since!" jokes Gianakos. She notes that, while this is just an illustration made in fun, the company is highly discrete in using its data. Still, the possibilities are truly endless. Not only does Super Stop! know what customers bought, but it can run cumulative totals. It knows, for example, all of the customers who bought more than three cans of Coca-Cola per week in a given time period. If marketers wanted to, they could further increase these customers' loyalty by creating their own programs for these customers. Next Stop, Personalized URLs Of course, the ability to capture this kind of information is not all that unusual. But the insight to use that information to drive 1:1 print communications is. In fact, looking down the road, Gianakos' next step is to add in personalized Web pages and personalized URLs to her VDP marketing. "We are just crazed on VDP," she says. "Eventually, we'd like to see the loyalty system get so sophisticated that, when you come to our pump, if you swipe the tag, it will say, 'Heidi, last time you were here, you bought a bag of Lay's potato chips. We have a special on those today.' That technology isn't here yet, but they're working on it. It's all about being a smart marketer." "We are just crazed on VDP," says Gianakos'. It's all about being a smart marketer." But the fineness to which data can be sliced and diced does raise some interesting questions about just how targeted vendors' marketing can --and should-- be. What if a loyalty card program owner chooses to run a database pull on customers whose Pepsi purchases have dropped off in favor of Coke, for example? What would the value of that program be to Coca-Cola? And should database holders allow that kind of data pull? There are interesting ethical considerations here, and while Super Stop! has not run this type of program, in today's cutthroat world of marketing as the number of loyalty card program owners grows, and the use of data becomes increasingly sophisticated, it raises an interesting specter of what might be. So what about that printer was so unusual? It is as gung-ho on data as Super Stop! Its owner, Ed Pierce, has a background in business and marketing, not printing, and brings his mania for databases into GPC's business philosophy. In fact, the Pepsi distributor had not asked to include gender as a variable in the SoBe marketing piece, but Pierce took the initiative to add it in an unobtrusive place for intelligence gathering, just to see what might turn up. And that little bit extra may have won him customers for life -- if he didn't have them already.