Part II, The Mechanics · Chapter 9

Builders

Collectables, loyalty stamp cards and repeat purchase: how to bring a shopper back, and back again

Thirty tiny jars of Vegemite

On Wednesday 18 July 2018, Coles started handing out miniature groceries. Spend thirty dollars at the checkout and you got one: a tiny jar of Vegemite, a thumb-sized box of Weet-Bix, a packet of Tim Tams you could lose in a pocket. There were thirty to collect. The promotion was called Little Shop, and it was meant to end on 28 August. Coles extended it to 11 September.

Coles sold a collector case to keep them in, and miniature trolleys and baskets to go with it. It ran a Swap Day in selected stores so families could trade their doubles. A Facebook swap group had more than 23,000 members by early September. Complete sets turned up on eBay with asking prices in the hundreds of dollars. And tucked into the thirty was a rare one, a miniature Coles Big Red Hand, with a thousand chances to win a hundred-dollar gift card for the people who found it.

This is one of the rare promotions whose result can be read in public. In the quarter to 23 September 2018, Coles reported comparable sales growth of 5.1 per cent, against 0.3 per cent in the same quarter a year earlier, and Wesfarmers, its owner at the time, credited Little Shop together with its investment in Flybuys. A year later Coles ran Little Shop again. In the quarter that covered the sequel, comparable supermarket sales grew 0.1 per cent. Coles put part of that down to the difficulty of beating the first campaign, and part to the competition: Woolworths had collectables of its own by then.

Both halves of that story are the subject of this chapter. The first Little Shop is a near-perfect Builder: it gave people who already shopped at Coles a reason to come back sooner and spend more each time, for weeks on end. The second shows what every Builder eventually runs into. Novelty does not repeat, and a promotion that works becomes the number next year’s promotion has to beat.

Repeat purchase is not the same as loyalty

Chapter 2 drew a line between two jobs that briefs often blur. A Builder does frequency. You already have the buyer; they buy monthly and you need them weekly, or they buy for Christmas and you need them in March. A Keeper does loyalty: it keeps your best customers from drifting over years, and it is chapter 12’s subject. The difference matters because the two are built differently. A Builder is a campaign with an end date and a reason to come back this week. A Keeper is a relationship with no end date and a reason to stay this year.

The Builder’s rule from chapter 2 is short: the progress has to look as real on the third visit as it did on the first. Everything in this chapter is a way of keeping that promise. Belief, in the language of chapter 6, has to be stretched across weeks. The shopper who started the set, or the card, or the run of weekly draws, needs to believe on every visit that coming back is still worth it.

Loyalty stamp cards: why a head start works

The humble coffee card turns out to have been studied properly, and the findings are among the most useful in this book.

In 2006, Joseph Nunes and Xavier Drèze gave three hundred customers of a car wash a loyalty card. One group got a card with eight spaces and no stamps: buy eight washes, get one free. The other got a card with ten spaces and two stamps already on it. Both groups needed exactly eight more washes. Over the following months, 19 per cent of the first group finished their card. Of the group given a head start, 34 per cent did. Nothing about the reward had changed. The only difference was that the second card felt as if the journey had already begun.

The same year, Ran Kivetz, Oleg Urminsky and Yuhuang Zheng studied a real café’s buy-ten-get-one-free card and found that customers bought coffee more often the closer they got to the free one. The last few stamps came faster than the first few. A card with twelve spaces and two bonus stamps was finished faster than a plain ten-space card, though both needed ten purchases. And the customers who sped up most towards the reward were the ones most likely to come back and start again.

Three design rules follow, and they apply far beyond coffee. Start people with progress, because a journey already begun is a journey people finish. Make the distance short and visible, because effort follows the share of the road still to go, not the number of steps. And expect the middle to sag: the shopper with two stamps of ten is the one most likely to drift, which is where a reminder, a bonus stamp or a double-stamp week earns its cost.

Collectables promotions: the set is the reason to come back

A collectable is a stamp card with a personality. Each piece is a stamp; the set is the free coffee; and the pieces are things people want to hold, trade and show. That is why the collectable is one of the strongest Builders in grocery and also the easiest to get wrong, because the arithmetic of a set is unforgiving.

Do the sum on Little Shop. Thirty pieces at one per thirty dollars means nine hundred dollars of shopping to complete a set, and that assumes no doubles, which in a blind pack there always are. Left alone, that is a long road for any family, and the stamp card’s sagging middle on a national scale. What saved it was the swap. The Swap Day and the swap groups turned doubles into progress, and they turned a private chore into a shared hobby, which is belief borrowed from other people in the same way chapter 8’s referral borrowed it from a friend. The rare Big Red Hand added a small chance layer on top, the Gambler’s seat in chapter 3’s terms, without making the set itself depend on luck.

So the collectable has its own checklist. How many pieces, at what threshold, and what does a full set really cost a family once doubles are counted? How will doubles become progress? What does the collector keep the set in, and does it make the shelf at home do the advertising? What is the rare piece for, and is it a bonus rather than a barrier? And what is the plan for the end, when the people who were going to finish have finished, and the ones who could not are left with a half-empty case and a child asking why?

Weekly draws and instant wins: a reason to come back this week

Not every Builder needs a set. The simplest version gives the shopper a fresh chance every time they buy and a fresh draw every week: more purchases, more entries, and a new reason to come back before Sunday. Monopoly at Macca’s, in chapter 6, was this at national scale for nearly forty years, with the peel at the counter adding the theatre.

Promo-Monitor’s guide to briefs, the same one quoted in chapter 8, describes the frequency job in one line: “Give shoppers a reason to come back. PRM lets you fund that at volume with a known cost.” PRM there is promotional risk management, the insurance of chapter 7, and the point is a good one. An instant win that pays out often enough to feel real across many visits is a liability somebody has to price, and the insurer is often the person who makes a frequent-win Builder affordable.

The trap is belief. A second entry is only a reason to buy again if the shopper believes it changes their chances, and a single major prize shared among hundreds of thousands of entries rarely feels that way by the fourth purchase. Weekly draws with their own winners, instant wins that are seen to land, and published winners’ names all keep the third visit feeling as alive as the first.

Bounce-back offers: put the next purchase in the bag

The plainest Builder of all is a reason to come back that leaves the store with the shopper: a voucher on the receipt, a coupon in the pack, a code under the lid that is worth something only on the next purchase. It suits brands that are bought one at a time, where a set or a card would be overkill. Its rules are the same as the stamp card’s in miniature. The reward has to be worth the trip, the deadline has to be close enough to act on and far enough to be reachable, and the offer has to be redeemable where the shopper will next be standing, which is a Venue question as much as a design one.

Why collectables campaigns run out of steam

Every Builder has an end, and the best ones plan for it. Three things go wrong often enough to name.

The cliff. When the promotion stops, the reason to come back stops with it. Ehrenberg’s finding from chapter 8 applies here too: sales tend to return to where they were. A Builder that has not built anything that outlasts it, a habit, a better-known product, a customer the brand can now reach, has simply moved purchases around the calendar.

The sequel. Little Shop’s second run is the clearest public example we know. A Builder that works raises the baseline, and the next one is measured against a number the first one inflated. Novelty is part of the reward, and it does not come back. The answer is rarely the same idea again; it is a new reason with the same discipline.

The middle. Most people who start do not finish, and the ones who give up are the ones who tell their friends it was not worth it. The car wash numbers are a reminder of how many drop off even when the reward is certain. Build the middle as carefully as the start: reminders, bonus stamps, swaps, a smaller prize along the way.

How to measure a frequency promotion

Ruling R11 says the job sets the scoreboard. For a Builder the scoreboard is purchase frequency among existing buyers: how often they bought during the promotion compared with before, and, the harder number, after. Little Shop could be read in a retailer’s quarterly results because the promotion was the retailer’s own. For a brand, the honest numbers live in its own sales data and in retailer loyalty data where it can get them: purchases per buyer, the share of buyers who bought more than once, and what happened in the weeks after the end.

What the promotion itself can see is narrower and still useful. Where a mechanic allows more than one entry, the entries per person show whether the Builder is doing its job: a campaign where most people enter once is a one-visit promotion, whatever it was meant to be. That number is only meaningful for closed, one-off campaigns, measured per week and stated with the count of people behind it.

Where this leaves the brief

A frequency brief usually arrives as “we want them to buy more often”, and it is worth turning that into numbers before anything else. How often do they buy now, and how often do we want them to? How many extra visits is that, over how many weeks? Then build the road. Start them with progress. Make the distance short and visible. Give the middle weeks a reason of their own. Decide how doubles, misses and near-misses turn into progress rather than frustration. And decide, before launch, what the promotion leaves behind when it ends, because the end is coming and the next one will be measured against this one.

A Builder brings the shopper back. The next chapter is about what they put in the trolley when they get there.