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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Nuts about Nandos: Why Finance is Peri HOT on Loyalty?

“Double chicken breast, cheese, hot, side of corn on the cob, peri peri chips and a bottomless softdrink”

Ofcourse this is Nandos, ofcourse they already know my order because the staff at my local observe my ritual every Tuesday and Friday like cluck work.
The pleasantries at the till used to be finalised with a ‘stamp’ to ink my reward for loyalty on a piece of card. This process is now digital, inking is no more! My excitement as a Finance person is I have both experience and an interest in the world of Customer loyalty to make sure Finance support 'The All Channel Experience' in getting these schemes right!

Nandos’ new loyalty card now dishes out 'chillies' as electronic rewards rather than physical stamps as they clamour to the holy grail for modern day Marketing moguls (think Mad Men) – they are now collecting Customer data.

Nandos already had a loyalty scheme, so why replace it with another one?

For starters, there will be no more eBay bandits buying fake stamps and rewarding themselves for such cunning, fowl play tut tut. There should be less use of ‘weird science’ to forecast the right amount of chickens or staff to employ throughout the day. Just recall the last time you went to eat somewhere and they ran out of something or the place was woefully understaffed...amateurs.

With the new scheme, Nandos will see what I eat, when I eat, where I eat and how often. Simply put they will plug me into an algorithm and hope to sauce some insight to exploit me financially through big data. Good luck to hen!

Following each transaction, a small bite of data is sent via the till presumably to a Customer Relationship Management database to piece together my customer profile and lifetime value. I am now on the chopping board ready to be sliced and diced in multi-dimensions

How has Social media changed the game for Marketeers in the world of loyalty?

One theorist suggested promotional and loyalty spend is just dealing with a ‘leaky bucket’, a cost to replace disgruntled customers, who are really only attracted to ‘one off’ deals not the brand. This ties into the long standing tradition of pushing promotions to the mass market through TV, radio, newspaper and the man on the corner with a board. One off, low accuracy aimed at a pitiful bunch.

However, modern day Mad Men will claim in order to build real brand value we must exploit the exponential power of free marketing from the people of influence i.e. you and me. The ripple effect of us influencing our network is more profitable than any TV campaign given the 2.4bn potential customers online.

So Nandos have a secret weapon ….the ‘Black Card’. The ultimate status symbol of exclusivity and coolness, only 100 believed to be in circulation and it does not officially exist. Celebs are hand plucked for their online media appeal, one cannot buy or over-endorse their way in. Artists Ed Sheeren and Example broke the secret with a video which went viral, 5m views on youtube, combined twitter army of 10m. Not bad exposure for 3 min sketch. If one card allows 5 people (rumoured) free meals per visit (excl alcohol), at my rate of 2 visits p.w, is £10,400 p.a per card holder. Bargain! Where is my guitar.

So why is it important for the Finance organisation to be fully part of shaping Marketing plans behind loyalty schemes?

Securing better ‘Return On Investment’

The bottom line is well the bottom line, the Finance Director will be less dazzled by Marketing schemes that lead to weak investment decisions which compromise Sales or profit targets. So if you know the customer and have the data insight, you do not need to play chicken wing roulette with the promotions, the result will be an increase in up-take and consequently ROI.  A recent survey identified 69% of customers receive promotions for things they do not want or buy. Lemon and Herbs.
Operating with ‘no surprises’ in the books

The Finance community must be able to record and report on the true financial position of an organisation in all matters loyalty. This is because issuing loyalty rewards has a financial implication in the books, whether as a future liability to be provisioned for or whether there is a future claim on a Supplier who is funding that loyalty promotion. Whilst accounting standards guide how companies should record deferred revenue liability and redemption, the convention of using historic data to estimate uptake is not hugely reliable on a digital platform where the pace of online customer growth far outstrips physical footfall. Automating this process to connect the ePOS to CRM solutions to Finance systems will increase reliability of financial position in a fast pace environments such as Retail.

So as a Finance person can I really be loyal to Nandos?

On last count I belong to 32 registered schemes and a further 9 paper based schemes, they seem to ooze out of my ruck-sack (waiting for a real digital wallet!). It would be difficult to remain loyal to all of these organisations as what triggers my buying decisions often change. However if Nandos continue to serve good quality product at a price that suits, provide efficient service and reward my custom then the likelihood is I will continue to go back.

It is worth noting however I also have loyalty to organisations that have no schemes. I frequent them for much of the reasons I do Nandos, except the brand element is a genuine bond and friendship with staff or owners who I consider like family.

So if you want my repeat business, you need to wow me with an experience that is appropriate for me, if you need my data to do that, then please poulet off my loyalty card.

About the author

Brijesh Patel
Brijesh Patel

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