Customer communications: 18 years strong

March 10, 2005 marked a major milestone in our journey to engage and reward Kroger’s best customers. On that date, dedicated Kroger shoppers found something new in their mailboxes: the first ever “loyal customer mailer” (LCM).

This mailer was the first step in our overall Best Customer Communications (BCC) program, which has evolved and grown by leaps and bounds over the past 18 years.

Photo caption: The earliest LCMs had up to four “conditional spend” (e.g., “Save $4 on your $40 purchase”) offers plus CPG coupons. Now the mix is one conditional spend/department spend/free product + 11 CPG offers (including Our Brands coupons).

Buddy Riggs, a data scientist on our Personalization & Loyalty team, has been around since the early days of the Loyal Customer Mailer and shared more about the differences between then and now:

“In the earliest LCMs, households not only were sent coupons for some brands that weren’t relevant to them, but even for categories they had not purchased. Our technology and science improvements have enabled the LCM to be 100% relevant to customers. Meaning every CPG or Our Brands coupon allocated today is for a product that customer has purchased in the last year.

The LCM targeting and allocation today is truly a monumental mathematical and computing challenge. Now the probability of redemption for every eligible household is computed on the nearly 2000 different possible offers they could receive, resulting in billions of household coupon combinations that are then processed through an advanced allocation. Multiple business rules and inventory constraints must be adhered to while attempting to maximize the total relevance of the offers and allocate as much inventory as possible. The end result is every household receiving a truly unique LCM that is entirely personalized to them.”

Photo caption: The ”value-added content” of the precursor to MyMagazine was versioned based on rudimentary shopping habit segmentations.

What was once new-to-market and unknown among shoppers has now become the bedrock of 84.51°’s offering. Lead Loyalty Marketing Consultant Ken Wacker, who has been on BCC Loyalty team for almost the entire lifespan of the program, sums things up nicely:

“Nearly 18 years ago, no one in my neighborhood knew what an LCM looked like or what we were up to. Today I would guess 90% recognize our products (LCMs, MyMagazine) and know exactly what we do for Kroger with our personalized offers.”

The look has changed, the data and science are light years better, but the goal to reward great customers and make their lives easier has remained the same. And the results are still leading the pack:

Kroger leads in satisfaction in both types of personalization when compared to competitors.

Customer note savings and relevance of MyMag and LCM