What Should King Do with the Program
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What should King do with the program?
My opinion would fall under retaining the program, although it has high cost.
1% revenue implies that the break-even point or minimum shopper should have to increase their activities at least by 4% steadily.
There are multiple reason stated through the paper about the positive results that they have had since launch.
Some of those are:
The perception of the customer has been positive as stayed on the satisfaction survey (59% being better than and 39% equal to).
The value that the data brings to Sainsbury by knowing what customer do day to day, help determine stock to carry and target MKT campaigns to the customers.
Less of a pain by not having to administrate the program
Data from Promotions done by Nectar were helping on light shopper population to increase the revenue for 6.5%
Shoppers are buying more frequently and spending more
What should Rob Gierkink do with the program to keep Sainsbury happy?
Rob should enhance data management to increase service to Sainsbury. This sponsor recognize the value and uses a lot the data to know about customers habits, what they do day to day, to determine stocks to carry at the stores, to target marketing promotion to customers. A clear sign of how Sainsbury value information is the J V with Taylor, Nelson and Sofres the worlds largest survey research firm.
Considering improving the Program fees would be another way to keep happy Sainsubury, since if there cost is being reduced it start to make more interesting not trying to have their own stand-alone loyalty program with all the administrative and the day to day activities. The area more visible to reduce, through the paper it seems to be the float fee.
Some other area to potential return value to the sponsor interesting to investigate would be some sort of profit is establish where the more success Nectar is the less they want to go do their own program. That profit could be used against cancellation of a part of the fees paid annually.
Other avenue could be show the value on the Managing customer retention expertise since is clear an area where a stand-alone program normally fails.
3-What should Rob do to keep other sponsors happy?
A similar answer than that for Sainsbury (q #2) would apply, but for sure covering and leveraging what Nectar claims to do for their sponsors.
With the Lift effect, making the customer spend more.