Open Pantry’s Ring Thing Encourages KaChing!

Loyalty program e-mails instant-redemption offers to thousands of customers

In a promotional strategy that has attracted 15 percent of Milwaukee’s motorists, Open Pantry Food Marts created a loyalty program that offers its members instantly redeemable deals on food and convenience items.

The operator of 27 stores based in Pleasant Prairie, Wis., created its Ring Thing, a metal clip or carabiner sporting the Open Pantry logo and painted-on barcode, to appeal to consumers who shun plastic key tags or are unsatisfied with points-based loyalty programs.

“So many loyalty programs copy cat the cookie-cutter plastic tags on a chain,” said COO Jim Fiene. “Females will put them on their key chains, but guys typically don’t. We thought the carabiner was good looking and functional, something someone would buy anyway to put their keys on. Plus, many rewards program members don’t know what they have earned or have any idea how many points they have in their account.” He added: “We didn’t want a program that would make them take time to monitor or figure out the program’s true value.”

With Milwaukee one of the country’s top cities for coupon redemption, Fiene and his team knew customers were looking for a value and wanted that value immediately, rather than building points or requiring specific buys to earn a future reward.

“This is a great city known for its cherry-pickers,” he added. “That is the consumer relationship we have to influence.”

Ring Thing members receive e-mail blasts twice a month, paid for by participating vendors, which feature two deals to position Open Pantry’s brand. One is foodservice related, such as a 25-cent hot dog, while the other is convenience/grocery related, including a 99-cent gallon of milk. Participating vendors pick up half the price reduction so Open Pantry does not give up its entire margin.

“The product has to have a hot price,” Fiene said. “Ten percent off means nothing to a consumer, 20 percent means nothing. The consumer needs to see something like a two-liter of Coke for 49 cents to make them take action.”

Vendors are charged for each e-mail blast, with the more they buy the less cost per e-mail. “Our business partners were very skeptical of loyalty programs,” Fiene said. “They didn’t want to play in the loyalty world, where people may earn points buying one product and then get another manufacturer’s product free. They felt a degree of arm twisting by some retailers. They expressed a lot of uneasiness about the value of points-building programs.”

The Ring Thing strategy, however, gives vendor partners instant, traceable results. A blast can be sent within a few hours of putting together a strategy or promotional idea. “Our partners get the instant redemption they want and can see the return-on-investment,” Fiene said. “Typically, the products move fastest during the first 48 hours, plateau, then dwindle toward the end of the two-week period.”

The structure of the program also allows Open Pantry and vendor partners to remain nimble. For instance, the retailer may send out an e-mail for the first snowfall of the season, offering windshield wiper fluid for 50 cents for that day and the next. “It is an incredible value, drives people to the stores and helps build that value proposition,” Fiene said.

Or the chain could e-mail: “It’s going to be 96 degrees in Milwaukee today, come buy a 32-ounce Gatorade for 50 cents,” or “Tomorrow the temperature will be below zero, get a free coffee in the morning and get your day warmed up right.”

“We try to be creative and fun,” the COO explained.

Vendors often schedule multiple e-mail blasts, but buy and save a few for last-minute promotions. Open Pantry also is open to immediate deals. A manufacturer, for instance, may have a couple hundred candy shippers it needs to move out of the wholesaler’s warehouse because they are nearing code. “We can Ring Thing, and blow those out in a week and give a great deal,” Fiene said.

Once, Golden Guernsey overproduced pints of egg nog. With two days left of the selling season, the dairy company offered the product to Open Pantry for free. “They just wanted the marketing value. They shipped it to the stores, we blasted our customers ‘Stop by Open Pantry, celebrate the holidays with a free pint of egg nog.’”

“It was phenomenal. Every customer was holding the Golden Guernsey egg nog and everyone was happy.”

Customers may quickly sign up for the Ring Thing program online or electronically via mobile kiosks outside events such as Milwaukee Buck’s NBA home games, Milwaukee Iron AFL football games and store openings, or via similar kiosks in the stores. Open Pantry asks only for the customer’s name, age and e-mail address.

“We didn’t want to get any more detailed than that, or ask anything too personal about who they are, where they live and what they do, because we didn’t want to do anything that would hurt our efforts to build our list and keep people on it,” Fiene said.

When customers register, they immediately receive an e-mail which validates they are a real person with a real e-mail address, and provides a coupon for a free product. Among past freebies: a frozen pizza, 12-pack of Coca-Cola and free gallon of ice cream.

“That is the bait,” Fiene said. “The coupon brings the person back to the store to get their free item. There is interaction between the registered customers and the employee, which creates conversation.”

Employees validate the e-mail address on the computer, hand over the free item and key fob. “Keeping people as loyalty members is harder than getting them,” Fiene said. “Customers are getting more sophisticated about signing up to get free product or discounts, then unsubscribing. You don’t want to over e-mail them — they’ll leave. These people may not run right out to get the 25-cent hot dog promotion, but the next time they do need the convenience of our stores, we’ll come to mind,” Fiene said. “Or they’ll look at their gas gauge, see the key fob and remember if they get their gas with us, they can also get that great deal on the promotional product.”

The deals are communicated only by the e-mail blasts. “We don’t promote them in the store, because we get full margin on all the products not sold with the Ring Thing,” Fiene explained.

To better analyze the power of the Ring Thing, the retailer is working now to implement software to tap into market-basket data.

“Today, we now see it as a customer driver and a way to present the value proposition,” Fiene said. “But we’d love to find out how much Ring Thing customers buy compared to other customers. This database of customers is extremely expensive to build, but extremely valuable. The carabiner is not a cheap piece of plastic, and the cost of the free product may be $3 a person, but it is well worth the expense, because this is the program we use to communicate to our customers.”

Ring Thing was developed in-house by Open Pantry’s IT team, led by Jim Leahy, vice president of accounting and technology. “It was truly brought to life — like any other successful program — by Open Pantry’s store sales leaders and team members, who are the real ‘key chain’ to the program’s profitability,” he said.

For comments, please contact Barbara Grondin Francella, Senior Editor, at [email protected].