Betty Crocker bonus coupon program updates itself

Sunday, June 2, 2002

GOLDEN VALLEY, Minn. -- After helping generations of homemakers collect sets of traditional flatware and dishes, the Betty Crocker catalog is taking a slightly different tack: selling trendier kitchen ware.

So along with Oneida knives and forks and English Rose tea sets, consumers leafing through the catalog are now finding silicone spatulas that withstand high heat and stainless steel ball-tip whisks, some of the most popular new kitchen gadgets on the market. They're also finding well-known kitchen brands including Oxo and KitchenAid.

The changes are part of General Mills Corp.'s attempt to boost declining participation in its Betty Crocker Catalog Points program by making it more appealing to younger consumers.

The catalog's target audience is women between the ages of 24 and 49, but the food company says 60 percent of its customers, who clip coupons from General Mills products and redeem them for discounts on merchandise in the catalog, are at the high end of that age range or are older.

"As we introduce new products, they are geared toward the younger end of that spectrum, but still have great appeal to people 45-plus," said Lincoln Davis, who leads the company's direct marketing.

The catalog also has a new "What is it?" explainer from Betty, who had a makeover herself in 1996. For example, Betty tells consumers that with the whisk, the extra weight of the balls makes the wires move independently, creating more mixing action that reaches the bowl's edge.

The changes are putting the program back on the growth track, Davis said.

The coupon program dates back to 1931, when General Mills began tucking an offer for a free teaspoon into bags of Gold Medal flour and boxes of Wheaties, thinking it would be a good way to boost sales.

The response was so great, the company said, that by the next year General Mills was offering an entire set of flatware that could be purchased piece-by-piece with coupons plus a few cents.

The coupons were moved to the outside of packages in 1937, and by the 1940s, housewives around the country were cutting them out and mailing them in with a little money to build sets of flatware.

It was a 10-cent silverplate teaspoon that attracted Martha Reuben, 73, to Betty Crocker coupons when she was a newlywed more than 50 years ago.

She wanted more. So Reuben, of Dayton, Ohio, started cutting out the coupons and redeeming them.

"I can remember, I just couldn't stand it until it would come. I would run to the mailbox hoping my spoon or my fork or my knife would be there," Reuben said.

Loyal customers

With the support of customers like Reuben, who went on to buy multiple sets of flatware for her three children and baby dishes and silverware for her grandchildren, the Betty Crocker Catalog Points program became one of the longest-running loyalty programs in the country.

The coupons now are found on more than 200 General Mills food products, including Betty Crocker baking mixes, Cheerios, Hamburger Helper, Potato Buds, Pop Secret microwave popcorn and Gold Medal flour. That's more than 2 billion packages a year.

Consumers don't have to collect coupon points to buy from the catalog, but without the coupons, they lose out on the discount.

Few customers use the cash-only option because the prices are generally higher than what retail stores routinely charge, Davis said. Customers who use the cash-and-points plan pay up to 25 percent less than a particular item might run at retail, he said.

To reach busier consumers who don't want to bother with clipping coupons, the company also has added a discount housewares catalog that's separate from the points program. That catalog carries some higher end items such as Cuisinart food processors, KitchenAid mixers and hand-painted Toscano ceramics from Italy.

One way General Mills sweetens its offerings is by arranging exclusive rights to many items, including flatware patterns created by Oneida for General Mills, which is the largest distributor of Oneida Community stainless steel flatware in the country.

Ran Kivetz, a Columbia Business School professor who has studied loyalty programs, said the key to success in these programs is not to make awards too easy or too hard to earn.

"You don't want too many points not to get redeemed because that means the program is not working or customers are not enticed."

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