Most towns in Sweden have challenging problems with the local trade – the same tendency as in most countries in Europe and United States.
Local shop owners lose revenue due to changing consumer behaviour. Consumers tend to visit big shopping centres instead of shopping locally. Add on the growing Internet trade. In Sweden, as in most countries, branches like fashion, books, and shoes are especially affected.
NTM decided to step in and support local trade in communities its newspapers are distributed, primarily local newspapers. The new venture is called XTRABONUS. XTRABONUS is the brand name for all NTM’s local customer clubs.
Local customer clubs are branded with local names like XTRABONUS Söderköping, for the local club in the township of Söderköping. Each store has its own customer loyalty club, but consumers can collect points in all participating stores with the same carrier. We use NFC key fobs or NRC stickers as carriers as shown here for XTRABONUS Söderköping.
With the concept, NTM strengthens the relationship with the local shop owners and can offer them a complete solution for their marketing, from one-to-one marketing to advertising.
In a competitive market, NTM gives local stores a modern CRM tool, and by this, a fair chance to battle against the large chains with well-developed CRM — allowing them to compete even with Internet’s strong position!
With XTRABONUS, local shops get a tool to build loyal customers and to use direct channels to get new sales and increase purchase amount per visit.
At XTRABONUS meetings with the local stores, the NTM sales people now meet happy clients and get to hear store owners express things like, “I have set a new sales record,” “This is the best thing that has happened to Söderköping,” and “I had so much to do that I have not had time to have lunch.”
New sales portfolio to meet new digital options
XTRABONUS gives NTM a competitive sales offer to meet stores’ uses of their own Facebook pages as a main channel for their marketing offers. Facebook advertising is taking a fairly large share of the smaller stores local advertising.
As Steve Gray wrote in his INMA blog, “Why direct access is a huge disruption of local media advertising,” news media companies must start to create new innovative digital solutions, and XTRABONUS is one such example.
With XTRABONUS, the shop gives direct channels to consumers: SMS, e-mail, postcard. At the same time, it is the media company — in this case NTM — that continues to own these channels. Each store has its own CRM access to data, but must contact NTM to use the contact data.
Here as an example data available for each store.
- Contact data (mobile number, address, e-mail).
- Purchasing behaviour.
- RFM: Targeting.
- TOP shopper, win-back etc.
For a news media company, this truly allows us to take back the power. Now that they “own” the stores’ direct channels, the sales people have a valuable opportunity for selling a combination of direct channels and local advertising.
As Niclas Andersson, sales manager at NTM, says: “We become experts in our clients’ customers, a knowledge that gives an advantage over other alternative marketing channels in the market.”
Stores subscribe to XTRABONUS and pay a monthly license fee. In addition, they pay for SMS, e-mail, and postcards; consumer insight reports from their loyalty clubs are included to increase their awareness of the possibilities they now have with their own CRM tool.
The content of the automatic, per-store-generated report corresponds very well with consumer insight analyses that would normally be very expensive in CRM businesses. NTM sales can now, with the support of the report, guide shop owners to effective marketing across all channels to focus on high sales results.
As an example of how sales people at NTM can work with data in the store: Below, we see a store’s transaction volume per day. Markings indicate when the store had activates, SMS campaigns or advertising, compared to when the store had no such activities at all.
The concept of XTRABONUS Sweden has now spread to nine cities, and NTM hears good things from clients:
What factors contributed to increased sales at stores with XTRABONUS?
XTRABONUS gives stores a tool to use daily in meeting with consumers. At each meeting, they have new ways to make consumer purchase more.
- Each store set its own loyalty programme. The system is built exactly like a digital stamp programme, where a store, for example, gives a stamp for each US$12. When purchases amount to US$119, the client would get US$12 in bonus.
This gives store owners a good way to increase sales at a perfect moment. You are very close to next stamp? Do you want to see if you can find something for, for example, US$3? We have stores reaching 10% up sales only by using this kind of communication.
- Club member promotions. Stores can choose to have weekly promotions exclusive for members. These are featured on NTM’s Web site/print edition to promote new consumers to stores.
- Fewer bargains. Local stores often have consumers trying to bargain. They can now happily give an extra stamp instead of giving discount at this particular visit. This makes both consumer and store happy.
- One-to-one channel SMS is surprisingly effective! We see response levels that you will only dream of at “chain loyalty programmes.” We believe this is because its local and much more personal. NTM sales staffs are trained to help clients with SMS having humour, personalised, and, of course, with generous discounts.
XTRABONUS includes the possibility for stores to use automatic processes like birthday process, VIP process, win-back, welcome, etc. The system provides local stores with a complete loyalty club system with all expertise and knowledge that the large chains have, but for a bargain price.
The company behind the platform XTRABONUS is FILLit. FILLit now is in more than 30 cities in Sweden and one city in Denmark.
XTRABONUS club member penetration in a city is high
The local response from consumers is outstanding. We often build a penetration at city household level of 30% registered households after six months.
Consumers in the city can pick up and start using the NFC key-fob in all affiliated stores. Users then sign up easily on a Web site and can use the same key-fob to collect bonus at all connected stores.
Through XTRABONUS, NTM attracted new digital users in the company’s digital customer centre DCS. All XTRABONUS customers are ether logged into DCS existing account or obtain a new one.
Unique local shopping behaviour to be used in programmatic analyses
NTM collects information about consumer’s local physical shopping behaviour. This unique data can then be used in programmtic analyses to increases targeting.
To know when, how often, and for how much a local consumer shops in a large part of the city’s local shops — together with her/his digital behaviour and NTM’s services — will make NTM very predictive in targeting marketing activates in the future.
Programmatic analyses with this unique data is yet to be done. But NTM is a front-runner in collecting this data. NTM is “Google” on local physical store consumption. Using programmatic and CRM analytics, bridges between data sources will be applied to all DCS users.
Today, XTRABONUS is in nine cities, but the goal is to implement XTRABONUS in all cities where NTM is present. Data will be aggregated and, using Conzoom, age, and gender, together with internal data, will give high precision in future analyses.
Why is XTRABONUS a success?
- The system is easy to use for storeowners.
- It’s a stand-alone system (does not need any integration in POS or any other system at the client level).
- The consumer is attracted both by own winning (bonus/discount) and for a good cause, i.e. supporting the local society.
FILLit, provider of system platform of XTRABONUS, is a fast-growing company with its roots in CRM world and a long history working for Experian in Northern Europe. The technology choice is NFC today in key fobs and stickers on mobile phone, but will soon be in NFC phones and maybe implants!