The Coutu Group finds gold in its frequent beauty shopper program

Drug Store News, Oct 9, 1995 by Liz Parks

Jean Coutu, one of Canada's top three drug chains, has implemented an immensely successful "fidelity" or frequent shopper program for its beauty care departments

In little more than a year, Coutu has signed up more than 250,000 women as members in its frequent shopper club, known as its Passion Beauty Card program.

According to president and chief operating officer Francois-Jean Coutu, the chain's cosmeticians are the main reason why the program grew so fast and so effectively.

For example, one five-member team of cosmeticians, working in the chain's Juliette store, signed up more than 5,800 Passion Club members in a little less than a year.

"Quite an accomplishment," said Francois-Jean Coutu, "considering that there are only 25,000 people living in the city of Juliette."

The Juliette cosmeticians were among over 200 honored at a gala dinner hosted by Jean Coutu in Montreal last August. The dinner, an annual event for Jean Coutu, climaxes the chain's Christmas cosmetics buying show. It is an occasion that management created as a way of saying thank you to the women who manage the cosmetics departments.

"It is their day," said Coutu. "It is a chance for our cosmeticians to meet and mingle with one another, to share information and to look for good ideas. During the day, we have the show, and we end up picking a cosmetician of the year and launching new programs like the Passion Club, which is very important to us because it helps to ensure that customers stay loyal to Jean Coutu."

According to Coutu, management did not launch the store fidelity program in a reactionary way, as a defensive move against competitors who were threatening to take share from the chain. Instead, the chain launched it from a point of strength, as a way of building on its accomplishments and insuring that satisfied customers remain satisfied.

"Our sales in cosmetics are very strong," said Coutu. "Our stores do about $6.5 million a year in Canadian dollars, and cosmetics accounts for about 6 percent of our sales. That means that our cosmetics departments generate between $400,000 and $500,000 a year, and those sales are very important to us.

"Cosmetics is also one of our fastest growing departments, up in double-digit increments over last year, and we attribute a lot of that growth to our cosmeticians and the service the provide.

"I know in the states many chains feel they cannot afford service. But we think that if a store does not give good service, people will only shop you for convenience, and that is not enough to maintain your strength in this category."

Coutu also said Passion Beauty Club was a way for the stores to offer "value" to their female customers.

"Seventy-five percent of our shoppers are women, and we think they do not just shop for fashion, they shop also for value. Women today shop on a budget, and we want to show consideration for their budget."

Having a frequent shopper club also gives cosmeticians a new way to talk to customers. Each time a woman purchases beauty care product in a Coutu store, she is eligible to join the club. When she joins, she receives free samples, coupons and other bonus gifts: Each time a member buys $5 of beauty care products, the cosmeticians put a stamp on her card. When she has 20 stamps or $400 in purchases, she is entitled to a $20 rebate.

Having a frequent shopper club also gives Jean Coutu a data base from which to create new marketing initiatives.

Not only does the chain know who its loyal cosmetics shoppers are and where they live, it knows, from the forms new members fill out, which brands they usually buy when they shop for cosmetics, fragrances, skin treatments, hair care etc. The chain also knows approximately how old its customers are and how far they travel to get to the store.

Already management has sent out some direct mailings to selected women in the data base. Down the line, the chain plans to do more mailings, working, in some instances, with its vendor partners.

"A very important part of the card is that we can use it to communicate with our customers," said Coutu. "We have already done two test mailings, and we mean to do more. Our manufacturers are also very interested because they can see they can use our list to help drive sales."

Positive response

In its first direct mail test, Coutu sent out 2,000 letters inviting women to come to the stores and have a "beauty session" that would include a free makeover. As an added incentive, the chain offered to double the points for any purchases the women might make.

"The offer was good for three months. In just a month, over 400 came in. We think that is a wonderful response," said Coutu.