For this type of endeavor there are a few items that need to be considered before moving ahead with the project. The first and most important is how the points are going to be earned and tracked. Next is how are the customers going to check the balance of their points, and lastly how are they going to redeem those points once they are earned. In this proposal I intend to outline a couple of different options along with the benefits of each option.
For your customers you need to have in place a way to differentiate who is making the purchase. This is best handled with a loyalty card. This is like a credit card that stores your customer’s information and is not accessible by anyone outside of the store. This card will keep track of the purchases made by the customer in order to offer them the best coupons as well as notify them when items they frequently purchase go on sale, or come in stock. This is a great way to market to your customers. If we expand on this idea we can integrate a point system as well for the customer using the loyalty card. Customers can opt out of the loyalty card and still shop but they run the risk of not earning the point and may miss out on specials. This allows you to reward customers without restricting your customers. Since this card would contain the customers’ personal information such as address, E-Mail, phone, and demographic information you can use it for a variety of other applications as well. The best feature of this would be that by creating an online account the customer could get a digital receipt rather than a paper one, they could track and view their past purchases, and monitor their earned points as well as redeem them online.
Now that we have a way to track the purchase and issue the points we need to develop the point system for the customers. For this there are a number of options that are available. Each has advantages and disadvantages. I will cover most of them in the section that follows. Option 1
You can base the points off the amount spent by the customer on each order. This would give you a wide range of flexibility while maintaining a ridged system. This type of program would need to have a minimum start point that could potentially cause some purchases not to be considered valid. There would also need to be a maximum cut off point so the points do continue to increase. A example is listed in the table below. This method would keep the points uniform and easy to track.
This option is centered on the actual items purchased not the value of the items. For this one to work you would have to set a point value for every item in the store this would net be a uniform system but it would be a more exact and specific point system for the customers. By setting the points this way you are rewarding the customers for not only spending money in your store but you are also rewarding them for what they are purchasing. In this plan you can set up special buys for the customer like double point on certain items during certain peak times of the year. This will actually help to increase sales on those items along with allow the customer to purchase other items as well.
This final option is focused more on the frequency of shipping not the value of the items or even the items themselves. In this option you are awarded points for frequency of shopping. You are given so many points each time you shop up to a set value each day. This would keep customers shopping but may lead to lower value purchases spread over longer period of time. By using this option you do run a risk of having customers stop in multiple times and purchase only a couple of items each time in order to maximize the points earned.
For each of the options listed above there would be a focus group set up of 10 – 15 customers they would be the beta group for each option at the end of the test period we would request their input based on their experience with the program, how the point added up, and how easy it was to understand the process. If an option is not met with successful feedback then it would be retest after making adjustment to the option. In this type of situation there is often time a lot of trial and error to get a process that works for both the customer and the store. Once the perfect plan has been found the implementation of the plan would be fairly quick.
Kudler Fine Foods Intranet. (2007, 2010, 2011). Retrieved 07 22, 2012, from Kudler Fine Foods : https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler2/intranet/index.asp