Essay
Business level 3 unit 11 m2
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Analyse the effectiveness of methods used to retain customers in a selected organisation.
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I will be analysing the effectiveness of methods used to retain customers in Tesco and how would Iassess the effectiveness of the many methods used to keep customers loyal to the brand? And what
is working well and what is not working well.
Tesco have a market share of 27% which is the highest out of the supermarkets and this shows
customers enjoy shopping with them. In terms of the net promoter score which is how likely
customers would recommend the business and Tesco mobile is 3rd out of the Top 10 and 6th is Tesco
bank and this shows that the methods Tesco use is effective. The business is chosen based on the
company’s reputation, value for money and access to support etc. Tesco’s loyalty scheme which is
the club card, allows customers to gain points when they shop, which will allow them to get
recommended products to buy and money off products when they next buy. However club card
vouchers get mailed to customers, which take long to receive the vouchers and take it to the shop to
spend. Customers will want the offers in real time which is getting the rewards instantly, which Tesco
does not provide. It will be easier if vouchers and offers were received through mobile and email
because one can use it without needing to take physical vouchers with them which can get lost; the
digital scheme will allow customers to receive immediate offers and be able to shop with it more
easily as they are unlikely to forget their phone whereas they can forget the physical vouchers.
Nectar uses artificial intelligence to make loyalty smarter, Nectar’s app allows customers to get
digital vouchers and use it , whereas Tesco does not do this and as Nectar is a competitor this can
drive Tesco’s customers towards Nectar. The app will be able to gather what the customers want by
what they buy and this will allow it to provide relevant offers. If Tesco’s app provided digital vouchers
this will allow customers to shop with just their phone and this makes it easier as they cannot lose
the vouchers because it is not in paper form. Also the more the app is used , the better the app will
be able to guess future offers which will be relevant to the customers and if Tesco do this it will
increase loyalty.
Tesco’s clubcard is becoming less relevant because loyalty schemes are becoming digital and real
time so customers can get their rewards instantly and spend it immediately. Tesco could make their
clubcard digital which is what most supermarkets are doing .
In terms of whether customers judge if Tesco is good value, customers believe Tesco is good value
and they seem to persuade customers every month that they are good value which is why the score
increased from +8 to +15.Customers view of Tesco’s quality has increased from +13 to +18, which
shows customers enjoy Tesco’s quality products and by Tesco providing quality products this is
effective in keeping customers loyal to them. Tesco improve in store experience, which customer
also believe it has risen and in store experience will contribute to how customers feel with shopping
with a brand, if they do not get good experience they will not shop there, which is why Tesco having
good in store experience will allow customers to be loyal to them.
Tesco was voted least favourite supermarket in a survey at a percentage of 30%, which shows there
are some customers who are not pleased with Tesco. This shows Tesco’s methods are not working
well for some of their customers; even though the clubcard provides points and good deals
customers may not be bothered to use it as they have to carry the physical vouchers around with
them. In another survey in terms of Tesco’s service, checkout speed, store cleanliness etc. Tesco
had mainly low percentage score which shows they are not doing enough to satisfy their customers.
Tesco is the largest delivery supermarket, as they have dark stores which is stores just for online
deliveries and as Tesco is the largest for this , it shows customers are shopping online mainly with
them , which shows this method is effective because customers enjoy online sopping as they do not
have to queue in the stores.
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