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Treated Like Loyalty

Posted: September 7, 2011


A multitiered rewards program and a strategy of ordering all items clients request keep Chuck & Don’s focus on satisfying devoted customers.
By Sandy Robins

If there’s one thing that Chuck Anderson, CFO and founding partner of the Chuck & Don’s Pet Food Outlet chain, has learned from his dogs, it’s that nothing spells loyalty like regular treats and rewards. In fact, he and his former partner Don Tauer built a successful business based on this grassroots philosophy of giving back and rewarding loyal customers on an ongoing basis.

By the end of this year, the company, headquartered in Mahtomedi, Minn., and now led by Anderson and president and CEO Bob Hartzell, expects to be operating 21 stores in Minnesota and Denver. By Anderson’s admittance, it’s been quite a retail odyssey, dating to 1990, when the first store opened with just $285 in the register.

By the end of 2011, Chuck & Don’s Pet Food Outlet expects to be operating 21 stores in Minnesota and Denver.
By the end of 2011, Chuck & Don’s Pet Food Outlet expects to be operating 21 stores in Minnesota and Denver. Photo Courtesy of Chuck & Don’s Pet Food Outlet
In the early 1970s, Anderson and his wife Sharon were running a thriving dog training business and decided to branch out and purchase a 128-run boarding kennel. After running both for about eight years, they merged the two into one location, and that’s when they met Tauer. Later they decided to separate the two businesses and sold the boarding kennel portion to Tauer and his wife.

The couples remained friends, and because of their mutual interest in pets, they started to explore the idea of opening a pet store together in the Minneapolis area.

“While we ran the kennel and the training center, we sold lots of dog food,” Anderson said. “I personally never enjoyed shopping in big warehouse-type stores for my dogs. Don and I knew we couldn’t butt heads with the big players in the industry, but at the same time, we reckoned we could offer something they didn’t: good customer service that made it possible for people to come in and buy what they needed without wandering around unattended. “

He and Tauer found suitable premises for the store, Anderson added, and told the real estate agent that they’d be interested if he could negotiate three months rent-free, which the real estate agent did. They then contacted suppliers, with the caveat that they wanted a dating of 90 days on all invoices.

”To our amazement, they agreed, too,” Anderson said. “We set up a cash register on a foldout table, put $285 in the register and opened our doors for business. Don and I each worked half a day and shared the weekends.”

The store was situated in Eagan, Minn., a fast-growing suburb of Minneapolis. It turned out to be an excellent location and gave the novice retailers sufficient cash flow to open a second location just nine months later.

From Day One, the entrepreneurs practiced what they had preached and made intensive staff training a top priority.

Chuck & Don’s guiding principle has been to order whatever a customer wants, even if it’s not a regular stock item.
Chuck & Don’s guiding principle has been to order whatever a customer wants, even if it’s not a regular stock item. Photo Courtesy of Chuck & Don’s Pet Food Outlet
“It’s something we continue to this day,” said Hartzell, who took over when Tauer retired several years ago.

Initially, the company focused on food lines, branching out to include a large selection of holistic, natural and frozen choices, and later transformed into full-service pet stores.

“Today, we sell everything the industry has to offer,” Anderson said. “But when it comes to fashion items and accessories, our focus is more of the functional than on the froufrou.”

In line with its policy to offer excellent service to their clientele, Chuck & Don’s guiding principle has been to order whatever a customer wants, even if it’s not a regular stock item.

“This strategy has attracted thousands of customers over the years [that] have remained loyal to us,” Anderson said. “Initially, the requests were food based. These days, it’s everything from an item of pet furniture to a toy that a customer may have seen in a magazine. We deliver on every request.”

This policy spawned the company’s rewards program, aptly called Friends of Chuck.

“We don’t do a lot of advertising in newspapers and magazines,” Anderson noted. “Instead, we publish a full-color, 18-page newsletter that we send out quarterly to around 90,000 customers. Apart from interesting pet-related articles, we highlight new lines being carried and offer huge discounts.”

Discounts vary in relation to the tiered loyalty levels customers can attain, he added.

 Chuck Anderson (left), along with president and CEO Bob Hartzell (right)
The company is now led by CFO and founding partner Chuck Anderson (left), along with president and CEO Bob Hartzell (right). Photo Courtesy of Chuck & Don’s Pet Food Outlet
“All newcomers to the store or sometime-customers are automatically put in the database and become a ‘Friend of Chuck’s,’” Anderson continued. “The next loyalty level, consisting of more regular customers, is called ‘Good Friends of Chuck,” and the most loyal customers are labeled ‘Chuck’s Best Friends.’ The latter get more regular mailings and discounted offers. However, all customers get a rebate check equivalent to 50 percent of every dollar they’ve spent with us. They can spend it on whatever merchandise they want in store. We treat it as cash.”

An expanding number of pet owners outside of Minnesota are getting the opportunity to become Friends of Chuck as well. The company opened its first store outside of Minnesota this past January in Denver and plans to have four stores fully operational by the end of 2011.

“We discovered that Denver has a very similar pet-loving demographic to Minneapolis-St. Paul’s,” Anderson said. “Also, many of our staff, including Bob Hartzell, have family there and were willing to get involved in this location.”

No other expansion plans are on the drawing board, though the company has long-range goals focusing on states such as Iowa, Kansas and Missouri.

The Minnesota stores have strong working relationships with local shelters and host several fundraisers, donating more than $100,000 a year to hand-picked causes, and Hartzell and Anderson have similar plans for their Colorado operation, too.

“Our stores in the Twin Cities area also sponsor the Ronald McDonald House’s resident dog,” Anderson said. “This is a project very close to my heart because kids with life-threatening diseases really respond positively to having a dog around on a permanent basis.”

Anderson would like to institute a similar program in Denver, but the Ronald McDonald House in the city doesn’t have a resident canine.

“Convincing them to get a dog is [at the] top of Bob’s Denver to-do list,” Anderson added. “I am sure he will get it right.”

 

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