Tesco simplifies Clubcard programme
Keys have now been dropped from Tesco's Clubcard programme. It is not yet clear whether this is officially counted as a relaunch or not, but members are being issued with redesigned cards which will be personalised with their name. They have been informed that it is no longer necessary to collect Keys and that, instead, they can buy Clubcard Deals directly with their vouchers.
The Clubcard programme was first launched in February 1995 and grew quickly: by June 1996 some 8.5 million of the cards had been issued (6.5 million were active). The current figure is some ten million. Clubcard has been steadily successful and has no doubt helped Tesco to firm its lead over other UK supermarkets.
How it worked To the customers, the programme was simple: members earned one point for each £1.00 spent (on most items - there are some exclusions). Each point was worth £0.01 and, every 13 weeks, vouchers of corresponding value were mailed to members, along with a personalised booklet of offers and individually targeted discount coupons for specific products (previous purchase information was used to choose these). These mailings now account for over 6% of all the mail handled in the UK at the time they go out.
Over the years adjustments have been made to the programme, the last major one, a few years ago, being the addition of 'Keys'. Customers earned a Key for each £25 they spent at one time. The Keys then accumulated and could be used to obtain Clubcard Deals which provided discounted holidays and other leisure rewards. But the Keys were an added complication.
Simpler Dropping them has simplified it for customers. Now, customers can buy Clubcard Deals with their mailed vouchers,doubling the value of the vouchers: a £10.00 voucher buys £20.00 worth of Deals. And, if the customer spends an average of £60.00 per week over a Clubcard 13-week quarter, this is doubled again (a £10 voucher would buy £40 worth of Premier Deals). It may at first sound a bit complicated, but it's simpler than the Key programme was!
The new Clubcard Deals Catalogue lists a wide range of leisure, holiday and travel rewards. For example, a customer achieving the £60 per week threshold could buy a 12-month pass for all the Tussaud's Group attractions in the UK for £17.50 worth of vouchers instead of the normal £70.00 cash price.
Weddings too The company is now also launching into the wedding market: shoppers will be able to redeem their loyalty card points for an exotic wedding in the Caribbean or Australia.
If the scheme is a success then Tesco plans to venture further into the market by selling wedding and bridesmaid's dresses, hair accessories, tiaras, special shoes and garters.
According to Tesco director, John Gildersleeve: "We fully expect the holiday scheme to be a success and anticipate that it will generate £10 million in holidays inside its first year. "Our present UK-based holiday scheme has already had a huge influence on British holiday habits with over 500,000 Clubcard members using the cut-price scheme to visit theme parks such as Lego land, Chessington, Alton Towers and Thorpe Park over the past year."
The company has sold some 500,000 Clubcard Deals since the scheme was launched two years ago - at a value of £22m. (This is in addition to the other benefits like days out at Tussaud's attractions and travel and leisure discounts). Deals sold so far include enough Planet Hollywood tokens to fill the London venue almost 40 times, tens of thousands of tickets to Lego land, and tens of thousands of passes to Madam Tussauds group attractions.
Changes at the helm And, of course, there have been major changes at Clubcard. Crawford Davidson, who led the Advantage Card team at Boots The Chemists' chain of pharmacies, has recently moved to Tesco to take over Clubcard. Watch this space