Scoring Points: How Tesco Continues to Win Customer Loyalty: How Tesco Is Winning Customer Loyalty [Hardcover]

The focus is on the Clubcard, but it also contains an interesting chapter on their online shopping success that is created on the basis of many of the same competences that the loyalty card required.

I'd like to put the book into perspective by playing devil's advocate. So what's the downside of a loyalty programme? Three problems usually hinder the success: big investment, internal culture clash, and privacy issues.

1) BIG INVESTMENT. It's expensive to develop the database - and even more expensive to maintain it. Especially the latter point is usually forgotten, while most people haven't yet tried to sustain a loyalty programme. The fact is namely that it eventually always risk running out of steam after the first breathtaking love affair for both the customer and the company.
"Scoring points" has devoted some attention to the development phase, where the Clubcard was "skunk work" without much prestige in the big British retail operation. But I like the second part of maintaining the magic of the relationship even better (because this story is so rarely told). They explain how to keep the loyalty programme alive and kicking for the customers by micro-segmentation, adding financial services, creating multi-channel retailing including the web, and so on to keep the concept fresh. The book also spends a lot of time explaining how the customer data can be used to see trends and also get new understanding of the customers' behaviours that we haven't been able to before.

2) INTERNAL CULTURE CLASH. It's not easy to get everyone in the firm to be oriented towards relationship marketing and make use of the available information. Transaction marketing is usually much easier and less demanding of the organization than real relationship building. "Scoring points" also covers these issues where the competition for resources from the top management is one issue and the relationship to the shop managers and shop assistants is another area. And it doesn't happen overnight - it usually takes several years with constant focus and commitment. The programme had testing phases, and needed many quick wins in several stores to obtain interest from other shop managers. Tesco's lesson in taking the time to make relationship marketing a part of an organization's culture is very valuable - and replicates my experience from other industries.

3) PRIVACY ISSUES. Maybe your customers don't want close relationships. Perhaps your customers even resent knowing that you have collected too much information about them.
In "Scoring points", they tell a story of a wife that complained about condoms that suddenly appeared on her personalized online shopping list, since her husband didn't use them. It turned out that he actually did, but not at home. His fault was that he bought the condoms in a Tesco shop with his loyalty card that was integrated to the web solution. That's how it was shown to his online-shopping wife. So much for privacy... That's an extreme - though real - example. And it's very illuminating for the sensitivity of data that we're dealing with - even when we think we're only selling groceries.

Tesco's story should be required reading for everybody that would like to understand a long-term relationship marketing concept in depth. I find that the real strength of the book is the chapters on how to preserve the programme. This story is often untold.

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

I'd recommend this book to anyone looking at analysing their customer base, for pragmatic lessons learned of what to analyse and how to go about it.

This book also examines some myths of the industry, such as that it's necessary to be able to market 1 to 1 to your customers, or that customers want a 'relationship' with their suppliers.