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Market Overview
Introduction
The advent of covid 19 has brought with it a myriad of challenges that have forced organizations to rethink their business models completely in most cases, comply with the government restrictions and guidelines, and maintain and bring in more customers. With the movement restrictions that have been put in place and total lockdowns in other places, the way of doing business has radically been affected. On average, it costs five times more to acquire new customers than to keep existing ones. With the great uncertainty that is the order of the day today, it is quite critical for brands to concentrate on building meaningful and sustainable customer connections. The use of customer loyalty reward programs is not a new phenomenon that has been employed in business; however, with the advent of covid, it has become increasingly difficult to retain customers, and the need for these programs has come to the fore now more than ever. Product promotion has also been used in various setups to boost customer loyalty. Therefore, this paper will look at the effects of Covid 19 on consumer loyalty to a particular product and services offered by a company. We will use Boots UK limited, a British health and beauty retailer and pharmacy chain in the United Kingdom and various other countries. We will investigate the business strategies that this company has adopted in order to maintain their customers and boost loyalty to their products.
Looking at the first question: “Which of the following are you a member of? Please select all that apply.”
82% preferred customer loyalty/reward scheme
39% choose paid subscription/delivery pass
10% choose none of these
Sample: 2000 peoples
Based on the market analysis, most customers preferred the customer loyalty/reward scheme compared to the paid subscription/delivery pass, which is 39%.
Here is a pie chart that shows it:
992 male voters in this sample, 77% of them choose the customer loyalty/reward scheme compared to 40% for paid subscription/delivery pass. For the 1008 females in the sample, 87% of them preferred the customer loyalty/reward scheme in comparison to 38% for paid subscription/delivery pass.
The majority choose the customer loyalty/reward scheme with 77% of males and 87% of females, compared to the paid subscription/delivery pass with 40% males and 38% females. This shows us that customers tend to be more attracted by the loyalty/reward scheme offers.
(The big picture)
( Look at the market overview and choose the data you think it’s relevant, like very generic general data of membership and paid subscription, make a few graphs (visuals like tables at first), and once you did that, it sort of easier to start writing something )Student examples: After that, you know what the data is actually saying, and then business insight: you choose a brand, and you start writing about the product and services they are offering, and then you take that brand and analyze it
If you can see the sort of like let’s say “they have very little membership when it comes to older generation” you can look at what are the factors or attributes and what the generation like in a loyalty skim
Then you can sort of if they want to target more of the older generations then you can conclude with that: okay boots loyalty should offer this and this because those are the factors that older generations seem to prefer
Business Insights
The brand chosen is Boots UK Limited. It is a company based in the UK working in the health and pharmacy sector and also has operations in various countries such as Ireland, Norway, Italy, Thailand, and the Netherlands. In the UK, it is one of the largest retailers based on the number of shops and revenue acquired. The company operates three businesses; Boots the Chemists, Boot Opticians, and Boots Retail International. The pharmacy is their most important section, which represents over a quarter of its total sales. Generally, the company specializes in producing the following products; prescription drugs sold through their pharmacies, retail medicines, a wide range of beauty and health products including electrical appliances such as shavers, hairdryers, and toothbrushes, clothing products such as baby and toddler clothes. The company also sells foods and drinks branded as Boots delicious and optical products.
To ensure their continued performance in the market, the company has implemented various promotion strategies. For instance, the company has a loyalty program called the Boots Advantage Card launched in 1997. This program offers four points for every pound that is spent in their stores. This translates to one point for every penny, which offers the possibility of racking up many points for their regular customers. Additionally, this strategy has led to increased customer loyalty. As a result, their loyalty scheme became the third-largest in the country with investments of over £ 30 million. The company also has another program called the Parenting Club, which sees parents earn approximately 10 points for every £1 spent on the baby products instead of four. As a result, such loyalty schemes increase customer loyalty, chances of in-store purchases, and better customer services. Finally, the company launched the Boots My Offers app in 2014, which enabled customers to have personalized offers for additional points that could easily be loaded to their cards for instant renewal.
In addition to the use of loyalty schemes, the company also has various promotional methods. They have developed innovative and simple advertisement campaigns, partnerships, and celebrity endorsements. The company has sought to develop an emotional connection with their customers and their products. They have entered partnerships with stylists such as Charles Worthington, Nicky Clarke, John Freida, and Lee Stafford. These strategic partnerships with famous hairstylists to promote boots as a stylish brand to the consumers. Thus, the company has been able to manufacture products and sell them under these influential figures. This way, the company has been able to attract young and new crowds. Finally, the company has various price offers, such as buying 3 at the price of 2, gifting for purchases made in their stores. The buy 3 at the price of 2 offers led to a 300% increase in sales, highlighting how effective their promotional strategies are.
Business Analysis
- Business Analysis
- Q2: Analysis and interpretation of the demographics
| Parental status | |
| Resident mothers of children aged under 16 | 83% |
| Resident fathers of children aged under 16 | 36% |
3.1.1 Customer Satisfaction
Question 6
Analyze and find a relationship between age, for example, “who are satisfied” and look at question 7
Relationship:
The Boots Loyalty card is fairly popular among the sampled population. For instance, among the internet users aged above 16 years, 54% reported using the Boots Advantage Card. To achieve this unique relationship with its customers, the company adopted various strategies. For instance, Boots has used designation and has successfully had a good client relationship by placing assorted mark clients and through analysis of purchasing behavior. This way, it identified picks of customers towards particular products and understood their dissatisfaction with other products.
Another strategy is differentiation. Knowing consumer behavior enables their services to be differentiated to meet the needs of different consumer sections and specifically provide products based on individual clients’ needs.
3.1.2 Clustering and segmentation
Due to product differentiation, the clients using the Boots Advantage Card were clustered in three different sections. The first segmentation began when Boots began giving benefits to the immature parents and free guidance on preparing the kids and singing parentage. As a result, there was an establishment of a better relationship between the immature twosomes and their parents.
The second segmentation was due to immature female parents and miss. The company targeted beauty magazines and free fittingness, which helps in driving trust and improved commitment towards the company. Therefore, there is the development of a positive relationship between the company and the consumers.
The company also began functioning old people by giving them Redding sing regarding their wellness issues and methods they could use in bettering them. Therefore, the company has been able to have these three different segments to target consumers and offer them individualized products that have led to the development of a positive relationship.
Conclusion
It is evident from the above example of the operations of Boots UK limited that various companies have been forced to employ various incentives to see that they maintain customer loyalty in this period of the novel Coronavirus pandemic. Some of the ways that many have employed appeal to the emotional connections with the customers. During the course of the study, it was established that there are numerous ways to incentivize customers. Many customers were drawn to customer loyalty reward schemes as compared to the paid subscription/delivery pass. 82% of the respondents, when asked which of the two they preferred, responded to preferring reward schemes. Therefore, we can draw our first conclusion and say that reward schemes are better placed to boost and maintain customer loyalty and encourage repeat customers.
In order to increase loyalty program ROI and overall customer retention, companies have taken to expanding their loyalty rewards to include social and behavioral actions such as referral awards and points or user-generated content while also at the same time attempting to provide a more personalized customer experience for example by launching of mobile apps that allow customers to make purchases or access the services at the comfort of their homes. (Miller,2020)
Another way of creating the much sort after customer loyalty is to create awareness of its products. For example, Boots UK Limited used celebrities to promote the usage of their products. In so doing, it encourages consumers to use their products as a way of identifying with a famous person. This results in a higher rate of returns for the company.
Of importance to note also is that age is a big factor when determining customer loyalty. Various methods of customer loyalty depend largely on the age and sex of the target group. Various strategies employed in customer retention and uptake by Boots UK Limited guided by the factors of age and sex further, by intently and deliberately investigating the preferences of customers especially repeat customers, the company was able to tailor-make products to fit the specific needs of the customers and ensure customer satisfaction in addition to giving a personalized touch.
Recommendations
The pandemic and its accompanying recession have customers’ emotions running high. Therefore brands should take a step back from driving a transactional only approach and instead build on the emotional loyalty of their customers through authentic and meaningful interactions (Bellar, 2020). In so doing, companies increase the chances of their customer being loyal to them without much hustle. Appealing to the emotional side of the customers in a non-exploitative manner boosts their loyalty to the organization.
To develop a true relationship with customers, brands need to look beyond the point of sale to focus on moments of engagement captured through social media interactions, customer service moments, content sharing, and more.
Supporting causes bigger than the company itself, especially in times such as this, where the world is experiencing a pandemic, serves as a key element of reciprocity. At times such as these, when people are suffering from the effects of the virus, allowing customers some room on some of the return policies convinces customers that one is a brand keeper.
The instability we face today is not a permanent situation. However, brands that respond empathetically and effectively to customers emotions during such a crisis will be best positioned to weather the storm
Thoughtfully rewarding customers with an enriched loyalty program, replacing the run of the mill discounts with personalized offers that provide real value goes a long way in delivering customer moments that matter and foster long term relationships.
I also recommend employing segmentation to craft compelling content and incentives for the customers. Leveraging real-time data to illuminate how shopping patterns have evolved serves to pivot the marketing strategy accordingly. Also, maintaining a real-time pulse on changing customer preferences and rapid innovation to redesign solutions tailored to those trends is a key marketer’s success during this period of Covid-19. Marketers need to have a deep understanding of the customer’s needs by staying connected to the trends and needs of both existing and potential clients. In addition, they must leverage these insights to design and deliver connected consumer strategies that ensure their customers are always choosing them and their products instead of their competitors. I recommend turning consumer insights into sharper targeting and activation while making data privacy a top priority.
Work cited
Miller, G., 2020. Customer Loyalty
Beller, M., 2020. To build Customer loyalty During Covid-19; Maximize interactions between transactions
Huang, H., & Liu, S. Q. (2020). “Donate to help combat COVID-19!” How typeface affects the effectiveness of CSR marketing?. International Journal of Contemporary Hospitality Management.
Sheth, J. (2020). Impact of Covid-19 on Consumer Behavior: Will the Old Habits Return or Die?. Journal of Business Research.