Air Miles the answer for Ro-Na

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]Le groupe Ro-Na Dismat, a Montreal-based network of independent merchants operating as retailers of hardware, building materials, horticulture and gardening supplies. It operates under five banners: Le Quincaillier Ro-Na;...

[This article appeared in a supplement to Strategy sponsored by Loyalty Management Group.]

Le groupe Ro-Na Dismat, a Montreal-based network of independent merchants operating as retailers of hardware, building materials, horticulture and gardening supplies. It operates under five banners: Le Quincaillier Ro-Na; Le Renovateur Ro-Na; Dismat; Le Quincailleur; and Botanix. It was one of the launch sponsors of air miles two years ago.

Guy Terroux, Ro-Na Dismat director of marketing, says the company had been looking for a loyalty program for about three years when an article appeared about air miles. Their promotional agency, Promo Marketing called Loyalty Management Group Canada.

‘Even though a little more than 75% of the Quebec adult population comes to our stores once in a while, they also go to other places,’ Terroux says.

‘We had a fairly big franchise, but we wanted to make sure they would make more of their purchases with us,’ he says.

‘We knew if we had a loyalty program, we would be able to increase that significantly.’

Terroux says Ro-Na Dismat was thought to be a little bit crazy to believe in something so strongly when it signed on as an air miles sponsor, but adds the company had done its homework.

‘We looked at all loyalty programs that existed at that time, such as catalogue programs,’ he says.

‘We had our own bonus money at one time, but we felt it wasn’t a good thing for the 1990s.

‘We looked at programs on our own, and with others, and then air miles came along.

‘We thought it was the best one. It was a strong one in Europe, and it involved leaders in the retail industry.’

Terroux is convinced the company made the right decision in joining air miles, and because the lmg database allows sponsors to monitor the success of the program, has proof of that.

‘One of the results we have tracked since the beginning – the dollars spent per air miles transaction,’ Terroux says. ‘It’s a little bit more than three times the regular cash transaction.

‘That’s something that has been steady since the beginning,’ he says.

Terroux says air miles was also appealing because it gave the company the chance to work with a network of leaders in the retail industry with the potential of exchanging customers and offering mutual customers special offers.

‘That’s what we were looking for in terms of impact,’ he says.

‘Over and above that, the cost of joining an existing program was a lot cheaper than producing our own.

‘To get a program with as much impact as air miles on our own would have been way too expensive.’

The air miles database was not as important to Ro-Na Dismat early in the venture because major Quebec grocery and gasoline sponsors joined the air miles program later than in the rest of the country.

Now that the program has been up and running for two years and has become strong in Quebec, the database is richer, and Ro-Na Dismat will be exploring its potential this year.

air miles has been evident in every element of Ro-Na Dismat’s advertising and marketing from the beginning, and will play a major part in the relaunch of the company’s credit card later this year.

Each Ro-Na Dismat flyer or catalogue features the air miles logo and special messages about specific air miles promotions or the addition of new sponsor companies to the program.

‘air miles is also part of all our television commercials, with a logo or tagline,’ Terroux says.

‘In-store, we have posters, decals and counter cards,’ he says.

‘Throughout the year, we conduct a number of internal promotions to make sure the employees are well aware of the program and know all the aspects of it.

‘By filling out the questionnaire, they can win air miles bonuses.

‘From 100 miles to a grand prize of 3,000 miles.’

Ro-Na has not yet taken part in cross-promotions with another sponsor, but is working with Jerome Dufours, their account manager at lmgc, to put together promotions with Shell and Provigo primarily for local markets.

Terroux expects it will be a bounce-back promotion, ‘something that will make sure every Shell or Provigo customer will receive coupons for miles if they go to Ro-Na, and, at Ro-Na, will receive a coupon for miles if they go to Shell or Provigo.

‘Shell and Safeway had tremendous results with their program, at a very low cost,’ he says.

‘You don’t have to advertise it widely except for a poster in-store and a mention in our flyers.

‘There are all sorts of promotions we could look at. We could play with the database and offer bonuses for shopping with us so many times a month.’

Ro-Na Dismat took part in the first mega miles national promotion last November.

‘We had more than 4,000 new customers at Ro-Na Dismat who spent $100 plus during the mega miles promotion last November, and we kept about 13% after the promotion,’ Terroux says.

‘We’re looking forward to the spring promotion results,’ he says.

‘Most importantly, we’ve found the air miles transaction is higher, and air miles customers come in a little more often.

‘We are very confident it’s the most efficient loyalty program.

‘I can talk as a marketer and a customer, too. I have 4,000 miles and [my wife and I are] going for a big trip.

‘[We] have decided that we have to cross an ocean before taking advantage of our miles.’