WILLISTON, N.D.- When a small-town tire dealer has to compete with the advertising might of Goodyear or Wal-Mart, joining a multi-retailer consumer discount program may be an advantage. It's called ``Discount Points'' and 23 retailers in the agricultural/oil town of Williston are trying out this new ``consumer loyalty'' program that promises to boost sales and encourage repeat business.
Under the program, operated by Discount Points Corp., a division of Minneapolis-based Carlson Companies, customers receive encoded shopping cards that electronically record ``points'' earned every time they purchase certain products at the 23 participating retail merchants in Williston.
For every 6,200 points earned, customers receive a $10 gift certificate redeemable at any of the participating retailers. Points can also save money on catalog gifts, air travel, hotel lodgings, restaurants and groceries.
The group of retailers in Williston includes a tire dealership, a clothing store, a dentist's office, a floral shop and restaurants. And each type of participating retailer has an exclusive on the program, giving them a competitive advantage in their market. The aim of the Carlson venture is to gather together a variety of retailers to create an ideal ``shopping mall'' that meets a variety of customer shopping needs.
The program debuted in the North Dakota town of 13,500 with a March 29 kick-off, complete with a media blitz. And Ron Stenson, owner of OK Tire Store, had seen a great response from customers after only a week.
``People have been asking for the card or asking questions about the card,'' he said. ``The whole town is talking about it. I can't go downtown without people stopping me and asking me about it.''
Mr. Stenson operates a tire store one mile outside of town, as well as three truckstops. He is a member of the American Car Care Centers marketing/buying group and competes with three other tire stores in town.
``Today you need a better edge. The market is tough. The tire companies spend a lot of money on advertising; we don't do that much advertising. This (program) is a way to get customers in and keep them loyal,'' he said.
He also likes the idea of being the exclusive tire dealer and service shop in the program.
Each Discount Points card, about the size of a credit card, is encoded with a special number that enables the participating retailers to record and track a customer's points electronically.
Computers in each of the 23 stores are all electronically connected, establishing an ``electronic shopping network'' within the retail shopping area of Williston, according to Discount Points Corp.
Each retailer decides how many points will be attached to what products, according to Mike Kraft, owner of Economart food store, which acts as the anchor for the other 22 merchants. Monthly ads will include the retailers' bonus-points specials.
At OK Tire, customers earn 10 points for every dollar spent for tires and during April customers earned 5,000 points for purchasing a set of four tires, gas-filled shocks or a complete brake job. During the first week of the program, Mr. Stenson had sold one of each bonus-point special and distributed an estimated 500 shopping cards to customers visiting the stores.
Each retailer pays a monthly charge based on the points that were issued that month in their store. The retailers, in turn, are reimbursed by Carlson for redeemed points and Carlson earns a ``small margin'' from the difference, a Carlson spokesman said.
``The long-range objective of the program is to not only offer the consumers considerable savings and valuable redemptions while shopping, but to encourage them to return again and again to shop at these same participating stores,'' according to a Discount Points Corp. statement.
The company also promises an advertising campaign consisting of billboards, newspapers, radio and TV ads as well as direct mail in the Williston area.
Williston is the second market for the Discount Points program. Carlson Companies debuted it in Sparta, Wis., in late January.
The company is eying 24 other small markets, and plans to open the program soon in five markets in central Kentucky, central Wisconsin and Kansas.
In addition to the discount points program for independent merchants in rural markets, Carlson plans to launch a separate program for national chain stores. The company spokesman said the program ``would work closely with participating companies to ensure there was no conflict'' with independent retailers in the program.
The ultimate goal for the program is to create a nationwide ``frequent shopper'' network in which customers can earn and redeem points anywhere in the country-almost like a second currency, the spokesman said. The small margin Carlson Companies currently earns from the program would multiply under such a nationwide network, he explained.