Fifteen years ago, Tesco was a weak No. 2 behind Sainsbury’s; they desperately needed to protect their existing customer base in order to survive. Our challenge was to broaden Tesco’s customer share. The aim included increasing frequency and value, and engaging with the majority not the minority.
The loyalty strategy spoke directly to Tesco’s customers with a reason to identify themselves, and a clear loyalty contract. The Clubcard gives Tesco a wealth of customer insight as it creates customer base profiles both nationally and locally. This information allows improved targeting and relevance of offers as their needs could be anticipated, as well as shaping communications and business strategy. Still going strong after a decade and a half, Tesco Clubcard helped put Tesco on a path of unparalleled growth and set the benchmark for loyalty programs worldwide.
Weekly, there are 180 million purchases recorded on Clubcard. Each quarterly mailing generates £30m sales uplift. Targeted mailings generate sales uplifts of £4m–£13m. Customers have become more loyal and as a result other product areas have benefited, e.g. Tesco Personal Finance – 26% of customers have multiple Tesco Personal Finance products.