CAMPAIGN DIRECT: PROFILE - KAREN PENNEY. Sainsbury’s marketer hoping to add a little ’magic’ to its loyalty scheme. Karen Penney is building on Reward Card’s growing success with a change of agency, Robert Dwek says

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

stunts.

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

loyalty.

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

below-the-line zeal.

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

wavelength’.

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

customer.’

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

offspring.

’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

feedback.’

Other things keeping Penney busy are the new Reward Points - electronic

kiosks being piloted in ten Sainsbury’s supermarkets and three

Savacentres.

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’.

This article was first published on Campaign