Sainsbury’s got off to a bad start with its Reward Card: before it
was even conceived, the supermarket tried to knock Tesco’s Clubcard,
which had benefited enormously from being first on the market in a new
sector. Consumers, Sainsbury’s said, would not be influenced by such
Well, they were - in spades. Tesco’s loyalty scheme gave its already
impressive growth a potent shot in the arm and its arch-rival was forced
into a dramatic U-turn. To be fair, Sainsbury’s has come a long way in a
short space of time and now claims to have overtaken Tesco in the
loyalty numbers game, with 11 million Reward Card holders - claiming a
growth rate of 50,000 a week - against Clubcard’s ten million.
But the question is whether Sainsbury’s latest bout of relationship
marketing turbulence - the decision to switch direct marketing agencies
for the Reward Card - is a positive step or another sign that the
retailer still hasn’t got to grips with the concept of customer
The word on the direct marketing grapevine is that WWAV Rapp Collins,
which had handled the Reward Card account since its launch in June 1996,
felt unsupported by Sainsbury’s senior management, which WWAV felt was
unwilling to exploit the goldmine of customer information and lacked
The rumours are robustly denied on all sides. So why, then, did
Sainsbury’s decide to switch this key account from the mighty WWAV
(which still handles direct marketing for Sainsbury’s Bank) into a
relative unknown, RMG, albeit one that has access to OgilvyOne and WPP
Group’s formidable resources?
Karen Penney, head of relationship marketing at Sainsbury’s, states: ’It
was a mutual decision to split and WWAV supported us right to the end.
We decided that, culturally, we were different.’ As for RMG: ’Its vision
is to build long-term relationships with customers whereas a lot of DM
agencies still seem to be stuck in the direct-mail mentality.’
For its part, WWAV claims agency and client ’weren’t on the same
But unofficial sources confirm the grapevine version of events.
According to one insider: ’We got to the point where the people working
on the account were so frustrated that it was becoming detrimental - and
it didn’t even pay that well.’
Tony Bishop, the managing director of RMG, has ’no interest in why we
took over from WWAV. We simply had the opportunity to use our expertise
in relationship marketing on a company that was keen to do more with its
direct marketing. We will be concentrating on understanding the power of
Sainsbury’s customer base and finding better ways to communicate our
client’s brand vision.’
Penney is neither a Sainsbury’s nor a direct marketing veteran. She
joined the retailer in December 1996 and worked initially on the
category planning side before taking up her current position in March
1997. Like many in her profession, Penney recalls that, with a degree in
experimental physics under her belt, she ’fell into marketing’, spending
most of the 80s at Mars, which she joined as a graduate trainee.
She was at IDV from 1989 to 1994, before moving to First Choice Holidays
as head of marketing development.
Penney played a key part in the rebranding of Owners Abroad as First
Choice. ’All the various marketing disciplines were brought under my
control and the challenge was to come up with an integrated strategy.
Integration is easy, so long as you keep your focus firmly on the
This same customer focus has prompted Penney to launch a number of
Reward Card initiatives, and she has been keen to segment her new army
of loyalists into more discrete niches, hence the launch of the Reward
Card Pet Club and the 0-5 Club, aimed at mothers with young
’Our aim is to find out what matters to our customers rather than trying
to impose what matters to us,’ Penney says. ’The best part is the way
the customers communicate back to us in droves, providing valuable
Other things keeping Penney busy are the new Reward Points - electronic
kiosks being piloted in ten Sainsbury’s supermarkets and three
Featuring interactive touch-screen technology, they have been on trial
for the past two months, enticing shoppers with customised offers.
Penney considers herself ’quite creative’ and is adamant that marketing
is both an art and a science. While the latter is an essential
ingredient behind any successful strategy, she believes ’you need a
moment of magic at the end’.