Kudler Fine Foods - Service Request Sr-Kf-013

Kudler Fine Foods - Service request SR-kf-013

BSA375

April 4, 2012

Juan Reza

Kudler Fine Foods - Service request SR-kf-013

Scope, Goals, and Accomplishments

Service request SR-kf-013 is essentially a request to track the purchases of customers that shop with Kudler Fine Foods. The purpose of a tracking customers is to understand consumer spending habits and for later marketing and sales initiatives. Information will aid inventory initiatives and allow targeted marketing as well as increase customer loyalty. The project will develop a way to track customer purchases; track customer points accumulated, and relate information back to stake holders within the organization. The scope of this project will range to include databases that track consumer information, reporting information internally, the rewards program functionality, points tracking, and even the rewards redemption. Essentially, the project will include internal and external users, and will likely include connections with third party vendors.

The primary goal of this project is to gain insight to consumer spending habits, gain customer loyalty, and to encourage users to participate in purchase tracking. If the project is successful, the customer will be easily identified for each transaction they make with the organization. Second, the project will allow the consumer some interface to track points and obtain rewards from accumulated points. Third, project success will include having a reliable database to draw and store customer information as well as to aid tracking points and rewards. Lastly, a successful project will be implemented in a timely manner and to meet the need of the end user.

Supporting Measures

Evaluating the success of SR-kf-013 will be directly linked to the goals that were stated in the previous section. There are many smaller goals that make up the overall goal of this project; the best result would be to achieve success in all of the goals. The project could achieve most of the goals and still not be considered a success. As stated, the primary goal of this project is to gain insight into customer spending habits, gain customer loyalty, and to encourage users to participate in purchase tracking. Achieving the secondary goals is also important to the overall success of the project.

If the information collected allows the management of Kudler Fine Foods to view customer spending habits, that part of the goal would be considered a success. Kudler Fine Foods can only review sales via store inventory and cash register receipts. The data will provide the shopping history for the top 20 percent of the customers. This will allow Kudler Fine Foods to target those shoppers with promotions and sales. The Frequent Shopper Program website states, "A retailer's first priority should be to identify the top twenty percent of their customers who can represent seventy percent of the retailers' profit. After you identify this group, the retailer can provide marketing incentives (especially for high profit margin items) that will increase the shopper's market basket, sales and profitability for the retailer" (Para. 2).

Kudler Fine Foods must enroll 75% of the customers in the frequent shopper program to collect customer spending habits. Offering lower prices to members of the frequent shopper program will encourage the customers to enroll. Another part of the main goal is to increase customer loyalty; there is not a program currently in place to track customer loyalty. Using the shopping data collected, Kudler Fine Foods will compare customer spending habits over the initial year of the program. Tracking the customer over this time will enable Kudler Fine Foods to verify whether customer loyalty is increasing with promotions and reward points provided. An increase in customer shopping by 10% would be considered a success. Online Data Present a Privacy Minefield states "A rewards program would also increase sales and shopper loyalty. People exchange personal information for convenience, discounts and other benefits" (Para 13). An external vendor will manage the rewards program and provide customer satisfaction surveys to Kudler Fine Foods to ensure that the rewards program is meeting customer demands. Surveys must have a meets or exceeds expectations on a minimum of 90% of the responses.

Summary of Project Feasibility

In assessing the project feasibility, the following factors are given the most importance and addressed: Operational, technical, and economic feasibility. In short, if economic analysis doesn't show effective economic positives, the system isn't worth implementing. The issue with implementing a Frequent Shopper Reward program is some benefits to Kudler's will be more difficult to measure and will take time realize, such as increased shopper loyalty. However, other benefits will be realized that aren't completely monetary in nature, such as better tracking of shopper habits, shopper preferences, better focus on discounts, and better inventory control.

Kudler's Sales and Marketing plan is projecting 4.75% revenue lift in the first year by implementing the Frequent Shopper Reward program, and in this respect the project would be economically feasible if it can accomplish this goal. To accomplish this, the sales team is expected to be able to analyze the data collected, and will need in-depth training to do so, and the data will need to be stored in servers currently not existing in Kudler's organization. In addition, the network connection between the stores will have to be upgraded as 56k modem connection is insufficient. Kudler reported that the Net Income for the fiscal year was $676,795, the requested revenue lift of the project is roughly $32,150, the projected costs versus benefits of the following tables totals $33,500 - which puts the economic feasibility within acceptable parameters.

TANGIBLE BENEFITS WORKSHEET

Frequent Shopper Reward Project (1 year)

A. Cost reduction or avoidance $10,000

B. Error reduction $5,000

C. Increased flexibility $5,000

D. Increased speed of activity $10,000

E. Improvement in management planning or control $25,000

TOTAL Tangible Benefits $55,000