frequent shopper program

Running head: FREQUENT SHOPPER PROGRAM 1

Frequent Shopper Program

Veronica Wagner

BSA 310

June 27, 2011

Ray Fernandez

FREQUENT SHOPPER PROGRAM 2

Frequent Shopper Program

Kudler Fine Foods is a local upscale specialty food store located in the San Diego

metropolitan area. Kudler has three locations (La Jolla, Del Mar and Encinitas). Each store has

approximately 8,000 square feet of retail space in a fashionable shopping center. Every location

has the very best domestic and imported fare (Kudler Fine Foods, 2010).

To help with tracking of merchandise and the frequency and quantity of each item Kudler

is implementing a Frequent Shopper program. This program will allow Frequent Shopper

program customers to receive incentives for loyalty and frequent use. The use of this type of

program has become common among some stores such as Safeway and Fred Meyers. To start

this program Kudler has to research the type of program to use and once decided the employees

must be trained to make sure the program runs without a glitch. Here are some issues Kudler

implement while setting up this program.

· Ensure customer loyalty program is easily accessible to customers.

Set up displays showcasing loyalty rewards program near checkout counter as well as

throughout the store. Also have staff available to help customers with the sign up process and to

explain the benefits (Business.com, 2011).

· Electronically track data from customer base in customer loyalty program.

Point-of-sale (POS) equipment can quickly and efficiently help gather data. Making the

most of a customer loyalty program means tracking customer information so it can improve the

business relationship and continue to build customer loyalty, it does not mean sharing this


information with other businesses or using the information in an unethical manner

(Business.com, 2011).

· Hire consultants to help make customer loyalty rewards program more efficient.

These loyalty program experts can help with all phases of the rewards program, from

start up to evaluation of materials. If Kudler can not afford to hire full-time consultants to help

Kudler with customer loyalty rewards programs, Kudler should hire a consultant to help where it

is needed most (Business.com, 2011).

Assessing the feasibility of the Frequent Shopper program enhancement is an important

step for Kudler to determine the chance of success for the project. A “feasibility study focuses

on helping answer the essential question of should the company proceed with the proposed

project idea?” (Hofstrand & Holz-Clause, 2009). There are three types of analysis used to

determine the feasibility: operational, technical, and economic.

Operational feasibility: the program should be able to integrate into the existing system

without too many problems and not disrupt the current system of operations. The new system

should only require a small amount of training for the employees to use it.

Technical feasibility: As long as the risks involved in developing the system are

identified the development team should have no problem in designing a successful program. The

program would be developed as an extension to the current POS system so that it will easily

integrate. Kudler also employed a POS server (Kudler POS Procedures, 2010), which is good

staging ground for the Frequent Shopper database.


Economic feasibility: is determined by performing a cost/benefit analysis. This analysis

will help the project team determine whether or not the proposed program will be beneficial or

not. The project team identifies the expenses of the project by looking at the available recourses

and estimate how much it will cost to develop.

After it has been decided that the program is feasible and will benefit the company the

company must decided to use their own people or to contract out or to use a consultant to help

with the set up of the program. The existing POS system would have to be integrated to be

compatible with the new Frequent Shopper program.

The current registers at each store will be used to enter the customer’s information, phone

number, e-mail addresses, and addresses. The database will allow the IT and purchasing

department to process the information and allow them to track trends and to update the system.

A secure website will need to be created to allow the customer to view points and to use those

points for rewards. Cashiers will need to be trained to ask each customer if the customer has a

reward card and if not would the customer like to sign up for one. The cashier should be able to

give a simple and accurate explanation of the rewards point process or have written material

available to handout.

The current registers should be able to allow for input of customer information such as

the individual addresses, e-mail address, and phone numbers. Once information is entered

customers are issued a reward number and a reward card with the number that would be unique

to each customer. This number would be available for use at each store no matter the location.


The information must be accessible quickly and easily by both the customer and the cashiers so

the system must be easy to use. Also the customer must be able to sign up for the program on

the web page. During sign up the customer should not be asked for any credit card information

or any other type of information that may make the customer less secure about joining the

rewards program.

When a customer signs up there must be an assurance that the individual information is

not used or shared with any other parties and that the website is secure. By implementing this

type of system Kudler Fine Foods will allow for better understanding of what the customers are

spending money on and how better to buy for the store. This will better allow the purchasing

department when bringing in products and allow them to customize their orders based on

individual consumer purchases.

This system is used to analyze the rewards points to see if purchasing is on the right track

with the type of merchandise they are bringing in. It will check the sales volumes, quarterly

sales figures, and the types, and amount of the specialized merchandise ordered. The quarterly

sales figures can be analyzed to see if there is an increase in sales and show that the rewards

program is working, it would also show any decrease in profits - this will allow for a better

understanding of what the customers want and allow for a fine tuning of the program to make it

more efficient for the company.

The long term cost over the initial setup would be when the system catches on and there

is a large increase in the customer database. The IT department may have to increase in


operators to support the new system or there will be extra hours of operations to manage the

system. The cost of implementing a new rewards program should pay for itself in a short amount

of time. It will also help all departments track purchases and understand buying and selling

trends for the merchandise sold. The Frequent Shopper program will help increase the overall

sales and give the loyal customers rewards for shopping that will keep them coming back.


References

Business.com. (2011). Making the Most of Customer Loyalty Programs. Retrieved from

http://www.business.com/directory/advertising_and_marketing/promotions/

loyalty_programs/

Hofstrand, D. & Holz-Clause, M. (2009, October). What is a Feasibility Study? Retrieved from

http://www.extension.iastate.edu/agdm/wholefarm/html/c5-65.html

Kudler Fine Foods. (2010). About. Retrieved from

https://ecampus.phoenix.edu/secure/aapd/cist/VOP/Business/Kudler2/internet/about.htm

Kudler POS Procedures. (2010). Point of Service (POS) Procedures. Retrieved from

https://ecampus.phoenix.edu/secure/aapd/cist/VOP/Business/Kudler2/intranet/fa/pos.htm

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