Rethinking Customer Behavior With John Giaquinto of Hannaford Supermarkets
John Giaquinto is the Senior Director of Customer Loyalty and Digital Marketing at Hannaford Supermarkets. With 20 years of experience in marketing and communications, John’s specialties include strategy and planning, CRM strategy and execution, customer satisfaction research, primary and secondary consumer market research, and creative execution, including design, writing, and production. During his career, he created web-based marketing programs that doubled a manufacturer's qualified sales leads over a market downturn. He also managed the strategy and execution of nine ongoing CRM direct marketing programs that delivered over $81 million in incremental sales annually.
Here’s a glimpse of what you’ll learn:
John Giaquinto sums up the journey and experiences he’s had throughout his marketing career
What’s happening at Hannaford Supermarkets that excites John?
How Hannaford Supermarkets navigated the pandemic when many grocery store shelves were empty
Why loyalty programs have benefited Hannaford Supermarkets
What changes Hannaford Supermarkets is seeing in customer behavior, and how it’s affecting marketing
How Hannaford uses behavioral data to personalize the customer experience
The best advice John has ever received, aside from “shut up and listen”
What you’ll learn in this episode:
Do loyalty programs at grocery stores really keep customers coming back? What is the key to a worthwhile loyalty program? Are grocery store loyalty programs simply quid pro quo, or are they actually benefiting the customer?
At Hannaford Supermarkets, its loyalty program has paid off in a big way — they’ve had two million enrollments. The key to Hannaford’s robust customer loyalty program is that they give customers discounts on things they would buy anyway. Those loyalty program discounts, combined with a Covid-influenced shift to more cooking at home and increased digital engagement, motivate Hannaford customers to use their app, receive emails, respond to campaigns, and clip coupons. That engagement gives Hannaford the data they need to personalize the shopping experience and target its marketing efforts.
On this episode of From Persona to Personal, Roger Hurni is joined by John Giaquinto, Senior Director of Customer Loyalty and Digital Marketing at Hannaford Supermarkets, for a conversation about successful grocery store customer loyalty programs. John talks about why customers’ digital engagement is higher than before Covid started, how it’s changed how people shop, and how the resulting data has allowed Hannaford to know individual customer purchases to personalize discounts through their loyalty program.
Resources mentioned in this episode:
This episode’s sponsor:
Today’s episode is brought to you by Off Madison Ave. At Off Madison Ave, we create meaningful moments of brand trust and influence how people interact and engage with brands.
There is a science behind tapping into your audiences’ desires and motivation. After all, if you’re not changing your audiences’ behaviors, you can’t truly unlock all of your brand’s potential.
The proven models and methods of Behavior Design is the strategic foundation for your brands’ success.
Episode Transcript
Intro 0:02
This is From Persona to Personal podcast. Today's episode is brought to you by Off Madison Ave. Off Madison Ave creates meaningful moments of brand trust and influences how people interact and engage with brands. The science behind their approach taps into your audience's motivations and desires. After all, if you're not changing your audience's behaviors, you can't truly unlock all of your brand's potential. Now, let's get started with the show.
Roger Hurni 0:20
Hello, everyone, I'm Roger Hurni, the host of this show where I get to speak with top leaders in food and beverage. And before we get today's guests with this gave you a little bit of a sponsorship message because this episode is brought to you by Off Madison Ave. At Off Madison Ave, we create meaningful moments of brand trust that can influence how people interact and engage with brands, there is a sign between tapping into your audience's desires and motivations. After all, they're not changing their audience's behaviors, you can truly unlock all of your brand's potential, the proven models and methods of behavior design is a strategic foundation for your brand success. Now, on to our guest, today I am here with John Giaquinto, who is the Senior Director of Customer Loyalty and Digital Marketing at Hannaford Supermarkets. Hopefully I didn't butcher his name too badly because my Italian is terrible. John, though, he has 20 years of experience in marketing and communications with 15 years plus of experience specifically is blue marketing. His focus is on customer loyalty. At Hannaford, he wrote the digital first loyalty program which includes a deep levels of segmentation, strategy and behavioral economics. John's background includes time as a creative professional, marketing executive consultant, and lecturer of marketing and public relations. Working at Handford covers marketing, communications, marketing, strategy, planning, CRM, strategy, customer satisfaction, research, primary research, creative execution include design, writing, production, and my goodness, you sound like a very, very busy man with a lot of skills. John, welcome to the show.
John Giaquinto 2:33
Thanks for having me. “How did they get that last name? Okay?” Good. I'm fourth generation Italian. So how do I know?
Roger Hurni 2:43
You know what they say, these people language you're an American? Well, I, here's my first question. And this one's gonna be easy for you, John, what haven't you done in the field of marketing? Because that's a fairly decent laundry list, and not a lot of people who have had their fingers in like that many pies?
John Giaquinto 3:05
Well, I mean, you have to calibrate that, that have been around for a while. So you know, sometimes I look at my resume. And I fear that I'm a jack of all trades, master of none. But I've had the opportunity to go really deep into a lot of things. And, you know, one thing you and I haven't talked about is I started in a creative background. And I think you did, too. I think we both studied graphic design. And just when you look at where I've ended up, it seems like it's such a departure is such a journey. But you know, with design, you're solving problems, I've never felt like I've deviated from that at all. I just keep exploring different ways to solve marketing problems. And it's led me from design to public relations to, of course, research and data. And it just all feels like it's the same thing to me.
Roger Hurni 3:58
Well, you're right, we do have a similar background. And I know the behavioral economics work that you do. It's always been there, behavioral economics, behavioral marketing, I used to say all the time coming up in the business that my job is to change behavior. I just never been how I did it until like the last eight or 10 years where I actually learned about behavioral economics about behavioral marketing. And it gave me a language that you have and I'm I know you and I both share, to help show people how things actually work, how consumer behavior works. And that's actually why I'm super interested to hear more from you on today's show, because that same sort of similar background, if that makes sense. The older we get the more experience because that's just a new field. So what what's happening now at Hannaford, that gets you excited. What's, what's going on there?
John Giaquinto 4:59
Well, we've launched our loyalty program in a small way to associates, and then to one test mark in 2017. That are, that was at the end of 2017. Our big launch was in 2018. And when you think about how long it takes to ramp things up, we've hit our stride right before the pandemic. So as much as I love looking at the data and seeing that we've reached our goals, it's just the world has changed. And it's, it's kept it interesting. So, since 2018, everything has scaled up to, frankly, beyond what we thought was going to even be possible. So now, we get into the real work of rolling up our sleeves and looking at the next way to get efficiency out of a program that is scaled and efficient. So that's what keeps me up at night. And that's what also gets me out of bed in the morning. Like, how am I going to spend that dollar a little bit more wisely and reinvest it so that I can get more for the company.
Roger Hurni 6:13
Makes sense makes sense. I want to take a step back in your network, you mentioned the pandemic. And a lot of guests that I have, we generally cover the pandemic and how companies navigated, navigated through that. You and I both have some time and obviously we are at a grocery store right now. And I spent five years on one, in one of my previous jobs before I do what I do now. And when the pandemic was happening, and this is a little personal information that you didn't know, I actually lived in Russia for a very short window. And there there was sort of a joke out there's like never stuff on grocery shelves. A not true maybe happened, you know, in the 90s. But not true, as you know, today.
But there's a scene from the Americans where there's like no, nothing on the grocery shelves and some sort of walking through. How did you guys navigate the pandemic? How, how was that trying to satisfy customers, when you would go there and shelves would just be empty? Because of all the hoarding. I mean, how did you keep customer satisfaction up? How did you navigate all of this?
John Giaquinto 7:26
There's probably at least three ways I want to approach that question. One of them that I think is, is really interesting from a behavior and a data perspective. I bought it for a while. The crazy idea that there wasn't as much hoarding as people think there was a shift in channels. To some extent, I have talked to at least one consumer packaged good vendor that describe you know, we're talking about toilet paper. That was the first one that seemed very acute, and very obvious that people must be taking more toilet paper, how do we have supermarkets that have shelves full of this, and then there's nothing. But what people don't really account for until you really dig into it is when everyone started working from home, you had all of these other institutions that had restrooms that had toilet paper in them, that channel stopped. So people they had to retool. So think about if you think about it, in terms of channel migration, the most abrupt that we've ever seen. People stopped pooping at schools and institutions and offices. And we're doing it all at home. So the grocery channel of getting your toilet paper became the entire market. And it was not originally set up. And the supply chain was not set up and and people's algorithms for demand were not set up to to realize that. So that was part of it. Another way I want to answer this is I worked for an incredible operator. Hannaford is one of the best supermarket operators, there is hands down, and the folks in category management demand planning supply chain, they just did heroic work to minimize the impact of the supply chain issues and demand issues. So they were able to keep more on the shelves than other retailers. So I personally did not experience that as as a marketing person as much as I did as a consumer shopping in different areas. So they just did a really good job that does not mean that there were not shortages. That is it also when when they were able to accommodate things just I mean that brands didn't change there was there were there were things being sourced from other countries and Mexican toilet paper on the shelves that nobody had ever heard of. But, you know, as far as I know, it still works. So, so that's how they were able to get by with a lot of things. That was another way to answer it. But the third thing that I want to comment on that is what scared me as a data driven marketing person that was that has goals about, that relate to incremental sales, I felt like there was the possibility that the entire world would be turned upside down, because I get incremental sales because I'm getting people to buy things. And buy more and choose Hannaford and choose their trip there. So when you look at what does that what facilitates that behavior, it’s offers, and if I give you 50 cents off of this, or $1 off of that, then encourage encourages you if that is something that you want them to buy to come to Hannover. Now, if the entire needs state is different, and people are just picking up the brand that is available, not the brand they want. That could change the entire economics of my program. And what is one of my most important stakeholders is the vendor community who funds some of these brand offers, in fact, 95% of the brand offers that go through my loyalty program are funded by folks that are getting returned for their company, the Procter and Gamble's General Mills of the world. I also didn't know if the economics would change for them drastically. Because if people were going to buy anyway, you're just you're taking a margin hit just to fund that offer when you didn't need to. And that's what, honestly, at the beginning, that was the general consensus in the consumer packaged goods company, community that it made no sense to fund offers. But we found that somehow the economics remained eerily consistent the rate everything stayed in the same ratios, everything went up a little bit. But the ratios in the relationships between redemption and return all stayed eerily similar.
I'm still not sure if I understand why that is. But I'm happy, happy it did.
Roger Hurni 12:33
Well, I mean, for those who don't know, and I've been doing a little bit of reading, Hannaford is 140 year old company and started as an, you know, fruit and vegetable cart? Evidently, really. So I'm hoping that vertical other 40 years, they would really be ahead of the curve compared to other grocery store chains that may not have the same answer that you had may not have done as well. And I haven't interviewed those people. But I think your answer is fascinating. And I'm going to completely speculate. But it seems like maybe the behaviors are consistent, because the grocery store was our staple, it was it was always go. And we might have shifted some buying in eight years, but we were we're buying things in the same category, sometimes a little more, something's going on. But it's not like I'm going to go grow food, I still have to go to the grocery store, you don't have the capacity to like, I think I'm gonna like, you know, raise a cow. And do what I need to do is really not, you know, an alternative that’s why people rely on consistency.
John Giaquinto 13:46
Yeah. I do think that that is at least partially true. But I have to say that I think our stability, I think we've benefited from not every competitor, being able to weather the storm the same way, because I think we did grow market share. So some of the stability that I saw, I think was the system correcting for our benefit and not competitors.
Roger Hurni 14:18
Well, again, I think I think you understand that consumer behavior, maybe was more distinctive for a lot of the people that you work with. But behaviors are shifting sort of on a daily basis. We didn't know what we didn't know, or taking new information all the time. And that was making some adjustments. It seemed like you're able to make adjustments in real time.
John Giaquinto 14:42
We call these things loyalty programs. And I think sometimes we're surprised when the outcome is, Hey it actually kept people loyal and I think a bit of a crisis but it I think that our program is we designed our program to really retain people. And it seemed like, it seems like that's what it does.
Roger Hurni 15:07
Though, the way you're describing this, and I think there could be a good learning here for listeners is, yes, loyalty programs work to retain loyalty. But in the pandemic, it feels the way you're describing this as the outcome was very subtle that the loyalty program became a “you got my back during this time”, kind of a feeling, which then in turn just increases that motivation and taps in with to want to continue to be a good partner and community. And I don't think people really think of it loyalty programs, they think of that as a quid pro quo, like, Hey, you're gonna shop here, give me something and there's exchange, I think that happens most of the time, the pandemic, for a few companies like yours, I think proved that you're a part of the community and the loyalty program was, and we've got your back kind of thing, which is probably the best way I can describe that.
John Giaquinto 16:04
Yeah, I think that's true.
Roger Hurni 16:05
But so we're talking a lot about about both customer behaviors. And what kind of changes now where are you seeing in customer behavior? And how does that shift in your marketing today?
John Giaquinto 16:24
I think that we are seeing still levels that we reached during the pandemic that never fully came back down. So I think that people, I think that when people look back at this period, I think we will see that there has been maybe a more permanent shift to cooking at home, at least in part. And I think that is buoyed this these sales that have, or this volume that has not really subsided all that much after the pandemic, which is surprising. I think we saw a shift to more digital engagement. I think to the extent that that was an E commerce reality, some of that has come back to prior levels, but I think some of the digital in general engagement has, has remained and I'll make that distinction there. Ecommerce being you know, you're using digital tools to make a purchase that you either pick up in the store, or you have delivered versus digital, just general digital engagement, you're using an app, you're receiving emails, and you're clipping coupons and responding to campaigns and identifying yourself. So the the former has given back a little bit of the the COVID gains, if you want to call it that. Not all of them, but some and I think the latter has remained at its high levels.
Roger Hurni 18:01
Yeah. You mentioned, you sort of identify yourself in personalization as it is a really big deal. I mean, even Gardner's got multiple studies talking to you about how companies that personalize either experiences or communications will outsell ones that don't by 20%. Are you able to leverage this behavioral data and turn it into a more personalized experience? Either either operationally or in the communications or both? How does that work for you?
John Giaquinto 18:33
I'm primarily using that data to to tailor promotions and loyalty incentives. So we send out one to one campaigns were out of 2 million people, we've reached about 2 million enrollments now. 2 million accounts could get for the ones that are getting personalized offers. It could be that no two are alike. That's the complexity that we're able to account for on so it really is based on somebody's individual behavior. But at the same time, there's another level at work where we are doing pretty sophisticated, customer segmentation and putting people into groups based on how engaged they are with us and seeing the shopping patterns that people fall into. And I can at the same time during a campaign design an offer set that is rewarding to a person because of what I see in their shopping. And at the same time I have other things that are in there and offered to them that encourage them to be more engaged based on where they are right now. So it's it's that whole idea of a nudge. I meet customers where they are and give the something for nothing, frankly, you know, you mentioned the quid pro quo. I think in my later years, I'm realizing the loyalty programs work better if they don't just, if they if they appear to give you something for nothing. And frankly, if they do give you something, like I give people discounts on things they were going to buy anyway, all the data in the world is telling me what they were going to buy anyway. And that is incredibly motivating for people, because they see all the savings, they would have to give up. If they took take a left turn out of their driveway and go to a competitor versus a right turn to come into the us. So I'm able to give them a true 1 to 1 offer set. And at the same time, place them into groups, and have other things that help facilitate the behaviors that would make them a better customer, a more loyal customer.
Roger Hurni 20:57
That is, I think that's incredibly smart. I think that listeners as well, but something very interesting to know, there's very few people actually executing 1 to 1 in scale. I mean, I've had people tell me that they're doing that, and then they explain to me what they're doing. And I'm in my head like that's not one of the one that's still dividing people into cohorts and doing some type of behavioral generalization, but it's not necessarily true 1 to 1, right. Given both of our backgrounds, I think you might have a different answer. How are you executing 1 to 1 that people might be able to learn from?
John Giaquinto 21:43
Well, I've got a lot of agency partners, including a, an internal centralized service that we call it, a whole database because Hannaford is part of a whole database. And then in the United States, we've got centralized services called People Digital Labs, or PDL. And that's where our segmentations were created. They also have vendors that we use directly. There's one in Israel called Sagarmatha, which is, which is in the Himalayan language, it's the name for Everest, the Tibetan Tibetan language, I believe, they're out of Tel Aviv, and they have just a purpose built black box that uses AI, that will choose the right offers for people, what we have to do is generate an offer pool. That is, with all the funding and all that goes with it, at have hundreds and hundreds of offers to be able to send you Roger 20, 10 to 20 that you like it takes 4 to 500 offers to be able to do that for a broad swathes of the population. So every month we we manage 4 to 500 offers, and then we put them through this artificial intelligence with the consumer behavior. And, and we can we could do 1 to 1 and get a fantastic response from customers. And I have, I've done it myself, we've had executives, customers, ever people will look at it and go, these are great, like I was gonna buy that I was gonna buy that I was gonna buy that it's, it's almost spooky, how accurate it is. But because you're you're in an industry with, you know, it could have 30, 40,000 skews in the store. I'm going to give you 10 just the mathematical impossibility of you are going to buy that 10 It's It's amazing. To be able to do that. We go from 10s of 1000s of SKUs. To 500 offers to here's 10. How do you like them? Roger, it's like a card trick. It's crazy.
Roger Hurni 24:02
Math makes my brain hurt, particularly as someone who lost the ability to help my kids do math after fifth grade. So aren't there? I mean, I love what you're doing with it can people don't realize how using behavioral data is a game changer? When you have tapped into that when you're able to make those offers, are there certain channel or channels that you use to execute? I mean, are you doing things? Like I don't know for sure application on the app or email or how would you how are you getting those offers to those individuals.
John Giaquinto 24:42
We are 100% digital program. The vast majority of customers see our offers on their app, and we send out an email we've got a very healthy email open rate, but we believe that customers are are not everyone's opening that. We know this because my whole team does this, now, you see that you got the email and you immediately go to your app to see your offers. So there's some text messaging and push notifications. But the vast majority of people are seeing these offers when they come out. We also have part of our loyalty program is we have a rewards system that is giving 2% back on private brand purchases, and private brand at Hannaford the way we define it, you know, if you buy filet mignon, and it's packaged up and they put a label on it in the in the butcher department, that's considered private brand, because there's a different brand on it. I know this firsthand, because I have cleaned out the filet mignon once and, like awards, but so 2% over time, can build up pretty quickly. But we it takes a quarter to build it and then it becomes available to you and turns into an offer. And you know, customers can get $10, $15, $20, $25 or more, some, a lot more than that, depending on how what their purchase behavior is. And if they're buying a lot more private brand. And so we're working on two different timescales there. So there's offers, there's that one to one offers, and then there's an offer that essentially you created for yourself over one quarter. And I think the two timescales it was I can't take credit for that design. I think it was genius. Whether or not there was a happy accident or not. I think it's genius. Because it really takes two different aspects of consumer behavior into account. I need that immediacy. Oh, but I'm also building something and I'm thinking about it long term.
Roger Hurni 26:55
I think that that's a good start. All right. Well, I have a couple more questions for you. Just to us talking, so no one's gonna hear, anything big announcements can you share? Is there anything on the horizon that happening head and Hereford that you can be like, I can share that as things we're working on.
John Giaquinto 27:20
Things we're working on. Trying to not give away any trade secrets. It's tough. We, on my team, we talk about within my program, we talk about the secret sauce, “We go to trade secret. So that's the thing. I'm trying to get a trip.” I go to conferences, my team members will go to conferences, and we speak and we always have this really compelling case study that we think is really interesting to people because most people started a loyalty program. And it's not all digital. So the trying to get people to be digital, we started digital. And it's very interesting to say, Okay, what happened? Because what if you only gave them that choice? So people were very interested in what we have to say. But we always fall short of giving them enough to reverse engineer things completely. But but as far as guiding principles, you know, you and I have discussed, it's more about the nudge, it's more about meeting people where they are and enjoying a personalization, I would say we have been exploring other ways to take these philosophies and have personalized experiences in other places, like maybe the homepage for E-commerce customers. And also, can we extend these personalized messages out further on the web and find and meet people where they are in other places as well. So I think you might see more, more of that.
Roger Hurni 28:56
Excellent. I will, I won't probe any further. I don't want to give away anything that's gonna get you fired. So here's my last question. Usually, it comes from this that, again, you have a nice broad background, you work in an amazing company. You're faced with some incredibly, incredibly smart people. What's the best advice you ever got?
John Giaquinto 29:15
The best advice I've ever gotten? Ah, that's a good question. Maybe Shut up. I don't know. Maybe you want a longer answer than that. Best advice? Yeah. That'd be a great way to end the podcast. “Well, I don't think people realize that shut up is actually you should be listening. I’ll shut up.” I I'll give you a more serious answer. I got I got some change management training, in my whole team, a bunch of my team did we actually several of us became change management certified practitioners. And part of the reason we did that is just introducing this new depth of data to the company, you realize you just hand it to people, and then it doesn't change anything. Because there's so much other change has to come along with creating a culture around data. And, and somebody in organizational development passed along this theory about there's a, there's a maximum speed of change that a company can handle. And but then there's an optimal speed, and they're not the same thing. And you can be, it's almost like an engine at at redline, you will be losing things that you might not realize is keeping a company going at Red Line. At the pace of change. You can you need to find the optimal pace of change, where you get the maximum horsepower.
Roger Hurni 31:12
All right, I think that that's excellent advice. I really appreciate you spending some time with me today. I had been speaking with John Giaquinto, Senior Director of Customer Loyalty and Digital Marketing at Hannaford Supermarkets. John, where can people learn more about you the work you're doing in Hannover?
John Giaquinto 31:29
Well, they could go to hannaford.com and see some of our products and how we show up to the customer in the digital space. You can find me on LinkedIn. And I am somewhat involved with the Loyalty 360 organization that is one of the organizations where you might be able to find some other interviews with me and perhaps in one of their upcoming meetings. I might be speaking there again at their annual meeting.
Roger Hurni 31:59
That is wonderful. All right, John.
Well, again, thank you so much. You have a great day. And thanks, everybody, for listening. I'm Roger Hurni. We'll see you next time
Outro:
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