By  on September 16, 2005

NEW YORK — Most retail executives likely would sell their souls in order to see data from their customer loyalty programs put to good use and directly benefit comparable-store sales.

Now, they may have an answer to that wish: Cartwheel LLC.

Founded in July 2003 by Larry Aronson, former president of North American sales and customer marketing for Revlon Inc., and John Wilson, former marketing director at Pfizer Inc., Cartwheel augments existing loyalty data with its proprietary methodology called ShopperMapping.

The process targets a retailer's best customers via marketing initiatives such as direct-mail or e-mail campaigns and coupons in an effort to boost same-store sales.

"The idea is that shopper-specific information is a new and very powerful tool that retailers have," said Aronson, president and chief executive officer of Cartwheel, in a recent interview. "Loyalty programs have been in the market for maybe 10 to 15 years, [but] the reality is that the [retailer's] expertise to develop this is really still in its infancy."

Most retailers have seen unsatisfactory progress with loyalty programs, according to Aronson, because many existing programs center on discount cards that don't adequately reward loyal customers. For example, in the case of New York-based Duane Reade, the company's Dollar Rewards discount card loyalty program had not been effective in driving customers back to the store.

The drug chain became Cartwheel's first client in 2004, and Dollar Rewards was relaunched last March to target the most profitable shoppers with direct-marketing programs. This ultimately drove front-end same-store sales (which exclude pharmacy and prescription sales) up 2 percent in the first quarter of 2005 compared with a 2.3 percent decline in the first quarter of 2004.

"The objective of a loyalty program is to have shoppers spend more of their dollars in your store," said Aronson.

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