Building loyalty: Testing the efficacy of farmers market loyalty programs to engage the community and enhance sales

View the project final report

• 2016 annual report

Commodities

Practices

• Farm Business Management: marketing management
• Sustainable Communities: local and regional food systems, public participation, urban/rural integration

After considerable growth, both the number of farmers’ markets and the amount of direct sales have begun to decline in western Massachusetts. Markets are looking at loyalty programs that reward frequent or high-spending customers, as possible strategies to reverse this trend. Very few loyalty programs have been implemented at farmers’ markets and analysis of their impact is even more limited. CISA’s project is designed to support farmers’ markets in implementing customer loyalty programs and to evaluate their impact. Our questions are: Can customer loyalty programs improve markets in terms of customer satisfaction and vendor satisfaction? And if so, which low-cost loyalty programs can farmers’ markets implement efficiently? We will be testing four loyalty programs with 10 markets in western Massachusetts and evaluating their impact through vendor and customer surveys and market data collected by market managers. A full report and one-page summaries on each loyalty program tested will be shared widely through Massachusetts’, Northeastern, and national networks.

Increasing consumer demand for local food at farmers’ markets (and in some places even maintaining demand) may now require additional marketing effort. Best practices in marketing suggest that one of the most cost-effective strategies for increasing demand is to encourage existing customers to buy more, buy more frequently, or become ambassadors for your businesses, thus attracting additional customers (Matt LeReux, presentation 3/15). CISA has completed research on loyalty programs currently being offered by farmers’ markets. We found that there are very few markets that offer loyalty programs and currently no best practices or guidelines to help markets in assessing loyalty program costs or rewards. Our research question is: Can customer loyalty programs improve markets in terms of customer satisfaction and vendor satisfaction? And if so, which low-cost loyalty programs can farmers’ markets implement efficiently?

Objectives and activities for this work are as follows:

Objective 1: Evaluate the success of four loyalty tools at 10 markets in terms of customer satisfaction, vendor satisfaction, and market impact.

Activities will include:

1. Work with each market to choose loyalty tools to test.

2. Support implementation, including providing guidance on vendor training, customer outreach, and data collection, in exchange for data tracking.

3. Collect data that will help us to evaluate the flow of traffic and sales at each market. Data will be collected from vendors, shoppers, and markets, as follows:

a. Markets will be expected to track and share weather information, total daily customer counts, credit card and EBT transactions (total sales and number of transactions), and new customers per market (as tracked by market booth). Markets will also track the number of customers who participate in each loyalty tool, how they used the tool, and what it cost the market to implement each tool. Methods will differ depending on the loyalty tool being implemented.
b. Vendors will fill out a vendor survey at the end of the season which will assess satisfaction with loyalty tools, costs associated with loyalty tool (time and/or goods), sales information, traffic level, and qualitative information about the success of the loyalty program and the market.
c. CISA staff will coordinate a customer dot survey once towards the end of the season to assess customer awareness of the loyalty program, shopping frequency, and satisfaction. A survey will also be sent to participating loyalty program customers at the end of the market season, to ask why they chose to participate, how frequently they shopped, how frequently they took advantage of loyalty perks, what they liked most, and what could be improved. Together this data will provide information on the impact of each market loyalty tool in terms of vendor and customer satisfaction, customer retention, and total customer base.

Objective 2: Write and disseminate findings so that markets across the country can evaluate and implement appropriate customer loyalty tools on their own.

1. Analyze data to assess the costs of implementing the customer loyalty tools for both markets and vendors; customer awareness and interest in the loyalty program; and market, vendor, and customer satisfaction with the program.

2. Compare overall trends in market performance to assess potential impacts of each loyalty tool (such as changes in customer count, sales, new customers, etc.).

3. Share preliminary findings with each market in order to incorporate their feedback.

4. Write report on the impacts of loyalty tools on market success, operations, and vendor and customer satisfaction, including information on which tools are best suited for which kinds of markets or market situations.

5. Create one page fact sheet on each loyalty tool, with recommendations for implementation and maintenance of the program for best success.

6.Disseminate findings (see below).

Timeline CISA will be the lead organization on this project. Farmer and market partners and collaborators will provide guidance and feedback and will review project plans and results. CISA’s outside evaluator will assist in finalizing data collection tools and analysis.

Activities and timetable are as follows:

1. Finalize market daily tracking forms and create draft Memorandum of Understanding (MOUs) for markets that detail market expectations for data tracking and CISA’s support (CISA staff, evaluator, farmer & market advisors, March 2016).

2. Meet with markets to finalize participation and use of loyalty tools, sign MOUs (CISA staff and markets and in some instances market boards, March 2016).

3. Train markets in tracking tools and implementing loyalty tools (CISA staff, markets, vendors, April 2016).

4. Implement market loyalty programs (CISA staff and markets, April - November, 2016).

5. Finalize dot surveys (CISA staff, evaluator, farmer & market advisors, July, 2016).

6. Collect market daily tracking sheets to date (CISA staff, markets, August, 2016).

7. Run dot surveys at markets (CISA staff, August - September, 2016).

8. Finalize end of season evaluation tools: vendor end of season survey, loyalty program participant survey (CISA staff, evaluator, farmer & market advisors, September 2016).

9. Collect end of season surveys and remaining market daily tracking sheets (CISA Staff, October - November, 2016).

10. Analyze data and draft findings (CISA staff and evaluator, December 2016).

11. Share preliminary findings with participating markets individually (CISA staff, markets, January 2017).

12. Finalize written report, executive summary, and one-pagers (CISA staff, evaluator, farmer & market advisors, January 2017).

13. Disseminate findings (CISA staff, February 2017).

Dissemination Plan Findings will be shared with each market individually. Additional dissemination will be as follows:

1. Within our region, CISA communicates regularly with each of 32 farmers’ markets. We will share our findings at our annual market manager meeting. In addition, we will use our regular newsletters, workshops, and in-person meetings with the 261 farm businesses that are dues-paying members of our Local Hero program to highlight the findings.

2. In Massachusetts, we will share our findings with eight regional ‘buy local’ organizations that support farm businesses. These organizations meet regularly and periodically host joint activities or workshops. In addition, we will publicize our results through other partner organizations, including Mass Farmers’ Markets, the Beginning Farmers’ Network, NOFA Mass, the Massachusetts Department of Agricultural Resources, and the Massachusetts Farm Bureau.

3. In the Northeast, CISA communicates regularly with other organizations that operate, train, or network farmers’ markets, support local farmers, and work to build the local food economy, and we will disseminate our results and written materials through direct contact with these partners, as well as through listservs and newsletters.

4. Nationally, CISA is a member of Wholesome Wave’s National Nutrition Incentives Network, which includes many farmers’ markets and organizations that support farmers’ markets and offers an on-line information resource and listserv. In addition, we will upload our findings to Market Umbrella and via Comfood, NEFOOD, NESAWG, and other appropriate listservs.