Q Mart Marketplace is an example of loyalty success, whose commitment to delivering a quality program has resulted in continued double-digit growth over the past three years.

• 21 stores
• 3 years with Outsite Networks Loyalty
• 3 years double digit growth
• 78% approval rate among loyalty tag holders

Outsite: Let’s start first by focusing on a statistic that came from a survey of Q Mart Marketplace customers. A startling 78% of the survey respondents claimed they "love" the program or "like it very much." What do you attribute that to?

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John: As we learned why customers like it... it became obvious that we were hitting on a lot of reasons why they shop our stores. We were able to develop a program that was in depth enough to reach the masses as a whole and add value.

Outsite: 78% high approval rating is a great statistic. Can you share any secrets with us as to how you achieved that number?

John: I think the number one reason is that our customers are connecting with our stores and what we sell. We’re giving them more reasons to shop our stores, more in depth. We have a number of clubs where you buy anywhere between 3 and 12 of those items and you get one free. People return to get their free milk, free coffee...

Outsite: So the clubs are a critical component to your success?

John: Yes. You also have to have good customer service. We're in a service business and consumers have to have a reason to want to come back to your place more often. The backbone of our rewards starts with excellent customer service. We make sure to reward up and down the system. We reward the customers with free products, and we reward our employees for doing a great job.

When we shop our
stores we reward associates not only for providing good customer service, but also for mentioning the Q Mart Marketplace rewards program while giving
that service. We give them a bonus if they *plus-sell the rewards program and if they
plus-sell a reward item...We’ve had great success getting interest from our employees. Of each store that we shopped, about 80% mentioned Q Mart Marketplace reward items and 33% actually plus-sold them.

Outsite: So if we ask you how the front line staff influences your success ...

John: ...They’re essential. We partner with our front line and let them know "You win when we win." We win when the consumer becomes more loyal. They win because wages go up faster and we give bonuses for talking about the programs.

We felt it was very important to get down to the street level with this program. And actually, everyone in our management team was required to learn how to sell and learn the pitfalls of selling. When we rolled out the program, every management person including myself actually went out and got to learn what worked, what didn’t work, and how to help our associates be more successful - a hard thing to do if you haven’t tried it yourself.

We took the time to learn more about our customers and what motivates them. 82% of my milk sales come through the rewards program. That's not only because people are being told about it, but that we’ve reached the public at a high rate.

Outsite: Your ice sales grew 35%?

John: Our ice vendor said that we are one of the very few chains in Wisconsin that grew ice sales and they stated that they definitely know that the rewards program is bringing people to our stores – that people are choosing us.

Outsite: And of course the big question, you've achieved double digit growth in sales, even in this economy?

John: ...We've been on the rewards program 3 full years and in each of the three full years we have had double digit growth.

Outsite: How much do you attribute that to your loyalty program?

John: The loyalty program is the backbone of our marketing campaigns. It’s where we start and finish every day.

When we are cutting deals with vendors and trying to figure out how to sell more of any of the products, we start with "How can we enhance it?" We’ve used a lot of capabilities like random rewards to develop new sales - target marketing specific products.

For example, we had Nesquik start a random reward where we issued a free pint of Nesquik. Nesquik sales weren't very high. .. we did well with others but we never did well with Nesquik. So we issued a random reward, giving out 500 free units over a two month period. We saw a 200% jump in sales. And the next quarter when we had no promotions running (for Nesquik), including no free rewards, we had over a 50% jump in unit sales. You remind people that you sell Nesquik. They appreciate the value. Now they are coming back for more.

Outsite: What would you say to all the people thinking about getting into loyalty?

John: You have to start with a commitment to the program and that you are developing a marketing plan for your stores that matches your commitment to loyalty. Good loyalty starts with good service and a good offering.

What I like about the ONI system is that it allows you to develop your business in a way that tailors to the sales and the patterns and the geographical issues ... You can really pick and choose and make a very successful program. It really does allow us to think outside of the box and be very creative. We've done a lot over the last two or three years that we never thought we could.

We were able to grow just our novelty sales by just over $200,000. We did it by combining random coupons with our merchandising. 1,500 people took advantage of that couponing just last year. We're able to really change the behavior of the consumer.

We're excited about what is coming down the road. There are a lot of interesting and intriguing evolutions that are happening to this program – this isn’t just a one-sided program.

Outsite: If you met someone getting ready to launch their ONI loyalty program what advice would you have?

John: Start out slow. Build from the bottom up, keep building and keep adding value. Focus your giveaways on products that will create more sales. Focus on what they are buying in the store every day. Be careful not to over-deliver on value...it’s also important to have a strong sweepstakes program for the top prize as well as a strong random and club program...

This year we increased our gas giveaway by another $10,000. Without cable TV or radio advertising, just pump toppers, our January new member tag usage doubled! Just one month. The cost of a sweepstakes really isn’t that high when you cost it out over a six month period. The consumer appreciates it because we’ve given away 10,000 rewards in one dollar and up increments, so you reach a lot of the shopping public.

John finished the conversation with this...

John: I was out in the stores today and I walked by a few ladies pumping gas. I asked them how they like the program. I had a response that could not have been better scripted if I tried. Their opinion was "I love it! I get a lot of free products just for shopping here every day and the people are great!" That's what loyalty is all about- the good experience that they are having.

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