Boots

Case Study: Boots

The Advantage card has provided the retailer with valuable information on its customers

Written by Bryan Glick

The Boots Advantage card is one of the most successful loyalty programmes in the UK.

Launched eight years ago, the scheme has 13 million active customers, and about half of all transactions at stores use the card.

‘Advantage card customers are valuable – the average transaction value for a cardholder is, on average, 50 per cent higher than for a non-card holder,’ says group IT director Rob Fraser.

‘When someone takes out an Advantage card, their spend starts at the normal level, but moves up over time to match the average for cardholders. It is not just taken by our highest spenders; you do see that change in behaviour.’

Customers earn points for transactions – typically a minimum of four pence in every pound is accumulated on the card, but with special promotions, the average return to cardholders is six per cent per year.

‘The increased average transaction value and spend profile we get from people just having a card more than pays for the administration of the scheme. So we get all the insight for free essentially, and that insight is the really valuable part,’ says Fraser.

A database with ‘many terabytes’ of information has been built up, and has provided valuable understanding of Boots’ customers.

‘It is a huge feedback from customers, based on what they do, not what they say. We get a load of behavioural information that allows us to understand what our customers really want,’ says Fraser.

‘Now the Advantage card has been running for eight years, you can see someone who got their card at 22, and how life has changed for them as they reach 30. The longer you have the scheme the better you see how people progress through life and how their patterns change. There is nothing so compelling as being able to thread it through particular customers and see the shifts.’

For example, Boots recently expanded its range of baby products. The company had previously cut back because this is a competitive, low-profit business that takes up a lot of space in stores. But through the Advantage card, it received a different insight on the long-term benefit of these products.

‘It allowed us to see how valuable our baby customers were,’ says Fraser.

‘People might have been with us as a teenager buying cosmetics, then maybe drifted away, but they come back when they buy baby products, and then they stay with us. If we make that connection with them, when they have children, they become very long-term loyal customers. We realised it creates this fantastic bond with that set of customers.’

IT has always been central to the Advantage scheme, but Fraser says it is essential that technology is used in a way that makes sense to customers.

‘We trialled kiosks that allow you to put camera media straight in and print your digital photos – you don’t have to hand them in at the desk and wait. It instantly captured customers’ imagination. They were not afraid of the technology, and we went from a pilot to a full rollout almost immediately,’ he says.

‘In contrast, last Christmas we trialled an internet kiosk in stores that would allow people to search online for products on Boots.com, decide what they want, print a voucher to pay for it at the cash desk, and have it delivered to their home. We found that did not quite make sense to customers.’

Fraser says technology works when it helps to understand customers better.

‘In the end, customers are loyal if you serve their needs best,’ he says.

  • Have your say
  • Send to a friend
  • Print this
  • Share

Tags:

reader comments

related articles

 

Visa tests mobile phone service to tackle card fraud

Cardholders will receive instant transaction updates via SMS 21 Jul 2009

Cyber-bullying affecting younger children

Younger age groups are using mobile phones and social networking sites 16 Nov 2009

BT launches new Infinity broadband service

Telco promises download speeds of up to 40Mbit/s 21 Jan 2010

related whitepapers

today's top stories

Telepresence: coming to a screen near you?

Telepresence systems enable organisations to hold boardroom-style meetings with far-flung participants without the hassle and expense of arranging travel and accommodation. But while the technology is impressive, it does not come cheap, as Martin Courtney discovered when he sat in on a virtual meeting with executives from Philips 10 Mar 2010

Users give their verdict on Azure

Some of the first wave of UK adopters met in London recently to air their views on Microsoft’s cloud computing platform. Dave Bailey listened in 10 Mar 2010

Protests greet new Digital Economy Bill amendment

ISPs, digital rights groups and Liberal Democrat supporters cry foul 05 Mar 2010

Publishing special - Publishers innovate to survive

1) IT could hold the key to the future of publishing 2) Case Study: The Guardian harnesses social and mobile apps 3) How publishers are reacting to the iPad 02 Mar 2010

IT Leaders' Forum in association with IBM

A unique opportunity to hear from expert speakers and engage in a debate about the future of the CIO job function 29 Jan 2010

Advertisement

Keys to successful Service‐Oriented Architecture implementation

This white paper explores best practices and general design patterns for service oriented architecture (SOA).

The Roadmap to IT Maturity — Matching Strategy to Infrastructure for Business Success

This paper defines a roadmap for matching infrastructure strategy to business success.

Advertisement

Keep up to date with the latest products, services and technologies from the world's leading IT companies; ITHound.com brings you over 6,000 white papers, case studies and analyst reports.

Advertisement

Newsletter signup

Sign up for our range of FREE newsletters:

More available - click 'submit' to view

Existing User

Newsletter user login:

Jobs

Related jobs

Job of the week

Job alerts

Sign up here

Find your next job

IT Salary Checker

Check salary here

Advertisement

Latest poll

NHS centralised data

NHS centralised data

Do you think the NHS can be trusted to safely look after personal data electronically?

View poll results

Latest audio and video articles

Video

HP unveils S Series notebooks

'Prosumer' line overhauled 01 Mar 2010

Web Seminar Listings

Preparing for enterprise-scale Windows 7 migration

The web seminar on 18 Feb will discuss how Windows 7 migration can increase IT efficiency in large enterprises, freeing up budgetary and personnel resources to focus on business innovation. Our panel of experts will examine the strategies, tools and services IT leaders can use to migrate successfully and reap the rewards of increased efficiency. 19 Feb 2010

Latest in-depth articles

Wayne GibbonsComment

Social networks are key to cracking China

Business social media can unlock the door to the world’s second-largest economy 10 Mar 2010

Neil SandersonComment

Choosing the virtualisation set-up that suits your firm

Decide on a system that best fits your business needs and plans – and don’t forget security, says Neil Sanderson 10 Mar 2010

Primary Navigation