While retailers wrestle with the contining impact of consumer cutbacks, the nation’s largest grocery chain, Kroger, is quietly outperforming its rivals everywhere. Fueling Kroger’s success is an unlikely marketing initiative they began several years ago.
In a recent Cincinnati Enquirer article, Kroger CEO, David Dillion said the key to Kroger’s success is its 45 million consumer database. Kroger has used that data collected from consumers to 1) customize individual stores to fit the customer profile, 2) create customized and personalized advertising campaigns and 3) provide targeted coupons to its most loyal customers.
According to Dillion, their marketing objective is not focused on attracting new consumers, its about increasing the share of their loyalists. “We don’t need to draw in others who don’t shop with us because the biggest opportunity is with our loyal customers.”
Their results are hard to argue with. While others stall or fall, Kroger grew 3-5% during retracting economic conditions.
At the same time, P&G is kicking off a new database-driven, relationship marketing model with its new Rouge Magazine. The company is enlisting mommy bloggers to help get the word out and build the database. I wonder if female-based radio stations in key markets could help blog about this? Check out the AdAge article.
Both P&G and Kroger are following a proven model of knowing and segmenting their customers through the use of analytics. In fact, we’ve featured several other successful customer-centrc firms using database communities. See them here and here.