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Design and introduction of loyalty schemes can be considered one of the last strategies that a company can apply to its operation in case of failures in all other strategies aimed at incensement of revenue. In other words, potential success from implementation of loyalty schemes can be treated as uncertain due to the ratio of number of failures and the number of successfully implemented strategies.
Successful examples can be drawn from the Nectar and Starbucks companies that have succeeded in implementation of loyalty strategies due to the involvement of specific points that can be collected via the cards and spent in the form of special offers. In this respect, it is possible to analyse the effectiveness of loyalty schemes with regard to the influence on business resources such as information management, financial management, and human resources management.
Design and Implementation of Loyalty Schemes
Design and implementation of loyalty schemes should be justified by the company’s economic and financial opportunities and difficulties. As customers’ loyalty principles are not always dependant on the genuine loyalty as the emotional condition, appealing schemes and approaches are used in the form of customer loyalty schemes so that customers can benefit from use of this brand products and services where the company can increase its revenue in this way.
Information management. The information management can be influenced by the implementation of the loyalty schemes as well as be impacted by these schemes. For instance, the Nectar Company expended into Italian market to address a larger audience because their services include franchising in different areas such as online stores and travelling, food and drinks at special offers, insurance and credit cards, as well as other types of companies are engaged into collaboration with the Nectar (Nectar 2010).
However, the actual problem of the information management concerning the loyalty schemes is related to franchising as the approach that does not help to build the customer’s loyalty and brand recognition. The process of expanding the network is aimed at increasing the gross revenue of the company by involving more products and services that can be used to build customer loyalty principles.
The main function of the customer information management is to facilitate the operation of customer segmentation strategies by figuring out the values and preferences of customers via customer loyalty schemes. Thus, the company Starbucks is known for its website construction where a customer can learn about the products available through the stores.
Besides, the Starbucks stores are considered one of the ways to inform the customers about the brand and build loyalty (Starbucks 2009). In addition, if a company fails to use the information management to improve responsiveness to customers’ preferences and expected incomes, the loyalty schemes can be considered ineffective and should not be used.
Financial management. The issue of financial management should be considered while analysing the ways this business factor can influence the loyalty scheme and vice versa. In this respect, it is necessary to assess the ways loyalty schemes are incorporated in terms of financial management in Starbucks and in Nectar.
So, the loyalty schemes should be adequately incorporated by means of implementation of a common accounting system. However, this strategy is sure to increase expenses making the loyalty scheme implementation and design ineffective. In other words, the design of the loyalty scheme should be aimed at effective operation of costs within the organisation including franchisees and other partners involved into the loyalty scheme.
The research on customers’ loyalty should be conducted as a part of the loyalty scheme with regard to financial management strategies. This research can be conducted by the company. Assessment of responses received from customers on the quality of services and goods can be used to provide customers with higher quality products though this should be included into mission of financial management team.
In other words, the customer loyalty scheme would operate effectively in a short period of time because specific financial management can be too cost-inefficient in terms of its design and implementation for a company. Different ways of spending collected points can be used to encourage customers buy more and collect more points as a part of the financial management that would increase the gross revenue of the company (Nectar 2010; Starbucks 2009).
Human resources management. The main strategy that concerns the human resource management should include proper training and consulting of employees so that they were able to meet the customers’ expectations and built up relations based on loyalty schemes.
In other words, the most effective way of involving human resource management into loyalty schemes is to make sure that all customers are treated at the highest and the most adequate level. Loyalty schemes would not work until customers feel their value and approach including special offers and specific attitude from the company’s representatives including franchisees.
The Starbucks Company uses special training to ensure that all employees are qualified in terms of preferences and needs of customers including those customers that are already loyal to the brand and potential ones.
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The same can be told about the Nectar Company that deals in the area of multiple categories of goods and services provided to consumers. Both companies under consideration succeeded in the implementation of customer loyalty schemes; one of the factors that contributed greatly to their success is the appropriate human resource management.
In this respect, strategies aimed at improvement of customer’s responsiveness on changes implemented into operation and employees’ ability to built trust relations with customers should be highly beneficial for the overall loyalty scheme. Besides, the human resource management should be an integral part of the design of every loyalty scheme. Training and encouragement should be implemented into human resource management as a part of the loyalty building scheme.
To conclude, customer loyalty scheme is usually considered to be ineffective or time- and cost-consuming because a number of factors are influential for its successful operation.
In this respect, it is possible to view the examples of successful design and implementation of customer loyalty schemes into practice with regard to Starbucks and Nectar who have managed to build trust relations with customers through a chain of loyalty-building strategies. These strategies include information management, financial management, and human resource management.
In other words, incorporation of adequate training for employees is a part of effective human resource management for both companies; a number of stores and access to information about accounts, activities, and opportunities is a part of effective information management exercised by both companies. However, the financial management requires more costs on its implementation which does not prove to be effective for further operation of loyalty scheme.
Nectar, 2010. Nectar. [online] Web.
Starbucks, 2009. Starbucks Coffee Company. [online] Available at: <https://www.starbucks.co.uk/>