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Scoring Points, How Tesco is winning customer loyalty
A book by Clive Humby & Terry Hunt with Tim Phillips.
Review by Professor Merlin Stone This book is essential reading for all marketers, students of marketing and everyone interested in customer loyalty and customer service. I don't use the words 'essential reading' lightly, because I know that most people drown in the readable material that circulates on the Internet. This book is essential because it is the very fullest account of success in retailing in the UK that has been published for a long, long time. More importantly, it is a story of leadership in marketing and of making the idea of 'customer orientation work - for customers and for staff. Perhaps most importantly of all, it shows that success in marketing (at least in retailing) is not a result of fads and cards, but of a stron, consistent and persistent focus on customers and their needs. The book, 'In Search of Excellence' made all management consultants and writers chary about lauding companies too much - so many of the praised companies experienced severe problems soon after the book was published. Being regarded as successful in management is a bit like marriages appearing in 'Hello' or other celebrity magazines. However, the Tesco story as portrayed in this book looks like it will run for a long time. The book does not just tell the story of the Tesco Clubcard, although that is the theme that connects the chapters, which cover everything from the Clubcard philosophy and how it works in practice, through how it is supported by a comprehensive mailing programme, in all its variants (by customer and time of year), to the extension and deepening of Tesco's proposition using card data. More importantly, the book tells the story of how the Clubcard has been used to provide focus to the strong customer orientation of Tesco. Knowledge about customers, gathered through the Clubcard, is shown to be a first recourse for Tesco marketing strategists. The use of this data is shown at its most powerful in the stories about how Boots took on Asda when the latter tried to undermine the Clubcard scheme by honouring Tesco coupons (by sending especially large coupons to customers of low value to Tesco but thought to be of high value to Asda, to ensure that the promise cost Asda dearly), about how Boots' share of the mother and child market was reduced by Tesco's good analysis (finding that many Tesco customers who were mothers nonetheless preferred to stick with Boots for baby products while giving Tesco their business as women), targeting and creation of a branding vehicle for mothers (the Baby Club), and about how the success of the Tesco financial services business was created and developed. But the book is also a story of experimentation, of discovering what works and what does not, of finding that success in marketing is as much a question of finding suppliers who share your vision and can deliver what you want quickly and cost-effectively, and finding business partners for giving and redeeming points who are prepared to work within your strategy. The book is relatively honest and refreshing in its style - it reads very differently from the many management case studies that appear in the trade press, telling stories of brilliant decisions made and implemented quickly and with stunning results. Although there are occasional passages where one feels that some of the complexities and uncertainties are hidden, on the whole the book describes a journey, beginning with early experimentation, trial and error, and ending with a strong position, but with admitted uncertainties, with on the one hand the most aggressive and best value retailer in the UK, Asda-Wallmart, making strong gains and good profits without a loyalty scheme, and on the other a comprehensive loyalty scheme, Nectar, with Sainsbury and Debenhams as two retail partners that bracket the Tesco offer. This notwithstanding, I am sure the book will be snapped up by managers at Tesco's competitors, and their marketing service suppliers. For even if they do not want to go the full Tesco route, many have a lot to learn from Tesco's story of customer focus and targeting. Essential reading at least for them - certainly! Buy this book. Contributor: Merlin Stone
Professor Merlin Stone is one of the world's leading CRM researchers and consultants. He is Business Research Leader with IBM and also IBM Professor of Business Transformation at the University of Surrey. He is a Director of QCi Ltd, Charter UK Ltd (formerly Swallow Information Systems Ltd.), The Database Group Ltd and ViewsCast Ltd. A prolific author with some 20 titles to his name, he is on the editorial advisory boards of numerous journals.
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