In-Store Reward Program Implementation in Allmart - Case Study Example

Project Proposal Allmart In-Store Reward Program Implementation Project Manager Source of Template: Project Management Template for Medium to Large Projects, Tasmania eGovernment Project, retrieved online on 18 November 2011 from http://www.egovernment.tas.gov.au/__data/assets/word_doc/0010/77842/Project_proposal_template_and_guide.dot Document Acceptance and Release Notice This document is authorised for release once all signatures have been obtained. PREPARED: Date: / / (for acceptance) Project Manager ACCEPTED: Date: / / (for release) Chief Information Officer, Allmart Table of Contents Project Summary……………………………………………………………………….4 Purpose…………………………………………………………………………………4 Business Policy Context………………………………………………………………..4 Working Title of the Proposed Project………………………………………………....6 Objectives………………………………………………………………………….…...6 Project Complexity………………………………………………………………….….7 Potential Benefits……………………………………………………………….………7 Feasibility Statement…………………………………………………………….……...7 Recommendation………………………………………………………………..………8 Business Assessment………………………………………………………………..…..10 Stakeholders Analysis……………………………………………………………….….10 Work Breakdown Schedule……………………………………………………….…….11 Gantt Chart……………………………………………………………………………...12 Project Budget…………………………………………………………………………..12 Assumptions…………………………………………………………………………….12 Constrains……………………………………………………………………………….13 References……………………………………………………………………………….14 Project Summary Purpose This document is meant act as a guide for the implementation of loyalty programme where apart from accumulating points on their loyalty cards, they will receive random prizes while in the store. It provides an explanation of the rationale as well as well as the context in which the project will be implemented. Business and Policy Context Allmart is a supermarket that deals in fast moving consumer goods, an area that is fairly crowded, in this market. Pricing the goods in a customer friendly way, is not, alone enough to ensure that customers keep coming back. It is this realization that informs loyalty programs. Currently, Allmart has a loyalty scheme that is based on the purchases bought by the customer. It is however imperative to ensure that customers not only make big purchases but also come to the store often. This can be ensured by offering random rewards for customers who are in the store at any time. This is why the random reward project is necessary. This project and the results thereof are an important part of the company’s strategic goals of becoming the biggest retail store in the country. The link between this project and the said strategic goals will be established in this proposal in order to make it clear. This proposal will also develop a budget which will be used to make important decisions, many of which will definitely be based on the cost of the project as proposed. A decision may be made to implement the project in phases, implement it at once or scrape parts of the project. Once the document has been prepared, it is the instrument that will be used to sell the idea of the project to senior management in order for funds and other resources to be availed for the success of the entire project. It is imperative to note that while reward schemes are an important factor in customer loyalty, they have to be implemented along other measures, including measures aimed at boosting product quality, better training for staff, including service managers, better store design etc. While this project is meant to encourage all customers to keep coming back to Allmart stores, suggestions have been made for beneficiaries from this reward scheme to be selected between new and old customers with new customers being more as a way of encouraging repeat visits. This can be done through sorting of all customers in the premises against records of previous visits in days before. A ratio of 70% new customers to 30% repeat customers was suggested in meetings with branch managers, service managers, branch IT managers et cetra. This ratio will ensure a significant percentage of the repeat customers also get the random reward together with ordinary reward from points accrued on loyalty cards in order to make shopping at Allmart worth their while. During preparatory meetings with staff, it was established that Allmart has a general manager is the chain’s Chief Executive Officer and he reports to the board of governors who authorize projects that go into changes in policy. Each of the branches has a branch manager who oversees the day today activities in his or her individual branch and is responsible of ensuring that whatever goes on in their store is in line with the overall policy of the chain. The organization also has service managers who are tasked with ensuring that customer service is of as high standard as possible while at the same time ensuring that it is sustainable in light of costs and structural sustainability. Service managers are in charge of zones which are demarcated geographically. In individual stores, below the managers in authority are supervisors who are stationed on the store floor and their responsibility is supervising store attendants, cashiers and other staff to ensure that customers get the very best services. The IT department, which has a representative dubbed IT manager, will be instrumental in ensuring that the software used in selection of customers for random reward, once they enter the premises is in perfect working order. There is also the customer care representative who, after receiving, feedback from the system announces the winner through the Public Address System and invites them to the customer care desk to receive their award. The shop attendants then deliver a pre arranged award to the winner of the day. Working Title of the Proposed Project The title for this project will be Allmart In-store Random Reward Project. Objectives Allmart is seeking to create a customer reward system that rewards customers for not only visiting their stores but also for visiting the stores often. This system will target customers who have taken the first step and applied for customer loyalty cards. Under this scheme, a customer will have his or her loyalty card scanned at the entrance as they enter the store, the customer information will then be sent to a central database which will give information on the customer including the their name, gender, age, address and the time they got into the store. This information would be important in determining the present that would be most appreciated by the customer. There will be a system within each store which will allow the customers inside the store at any given time to be known and then they will be awarded prizes at random at any given time. When the recipient of the prize has been identified, their name will be called out through the public address system from where they will be informed to receive their prize from a designated place in the store. The prize will be given to them after they have given their loyalty cards to the customer care representative at the desk. The prize offer will be good for a specified duration of time after which the offer will have expired. This project is intended to encourage customers who already hold loyalty cards into the stores and also encourage those who do not hold the cards yet to get the loyalty cards and shop more. This way, Allmart stores would have a regular and reliable customer base. Which would ensure stale levels of sales in this extremely competitive area of discount stores encouraging a big customer turnover is important in ensuring that the stores are as they were billed from the beginning, that is, half the profit, twice the turnover. Project Complexity The project is expected to be fairly complex, complexity of the project due to the fact that Allmart stores are located all over the country and it will present a logistical and technical challenge to ensure that the same system is replicated in all of the branches. It will also be difficult to ensure that the customers will get prizes they will consider important. The other complexity is the need for the stores to ensure the cost of prizes is not so high on the stores as to make the project unsustainable. Potential Benefits The project will increase Allmart’s customer base while ensuring the old ones are retained. The customers will also be more loyal and make more purchases as a result of the project. The project may also strengthen the relationship between Allmart and their suppliers. Feasibility Statement The project is economically feasible, since the cost of procuring the prizes will be shared between Allmart and the suppliers. The benefits it portends for the stores far outweighs the costs involved. Organizational feasibility will be ensured by the presence of structures already established in the stores the project will be run by both the IT and marketing department The system will be developed by the system developer in conjunction with the IT department, this will ensure that the IT department has the know how to deal with any technical matters that might arise. Recommendation In order for the project to be successful, it will be necessary to ensure the coming together of all the necessary, goods, materials (and services and making a framework for them to interact to form the whole project (Schwalbe 2010). These requirements include developing a database system that will enable entry of customers when they come into the market and programming it to select a winner of the prize based on certain preset parameters and also match the winner with the prize he or she is most likely to appreciate depending on the demographic he or she fits in. This system will comprise a database system and filter software which will allocate the most appropriate prizes for customers. This software’s, functional requirement will include allowing the individual monitoring it to log in and log off after they have created an account. The log in will ensure that it is possible for management to track who is in the controls at any given time which will be important in ensuring integrity of the process. It will also keep a record of customers who come to the store and use the number of times they come to ensure that a customer who comes many times will improve their chances of being rewarded with the prize getting bigger for customers who come often. The system will also store information on previous winners of the prizes. After the system has been developed, it will be important to come up with a way of obtaining the prizes to be offered under the programme. There are two ways of going about this, the prizes can be offered exclusively by the stores which would limit the worth of the prizes on offer since the stores can only shoulder a certain amount of the cost without jeopardizing its profits. Having the stores offer the prizes alone might also have the effect of making the prizes too small and therefore less interesting to the potential beneficiaries. The other alternative is engaging different suppliers to give their products as prizes for the promotion, thus making it possible for the prizes to be bigger and the promotion more interesting. Companies that sell goods and are interested in promoting them in the market would be encouraged to sponsor the program which would be an effort in cross advertising. The process involved will be negotiating with the different suppliers whose goods are thought to be of interest as prizes to sell the idea to them. This pitch would best be done by the sales department to the sales department of the suppliers in question. Once the system has been put in place and goods acquired, the next course of action will be to publicize the promotion. This will give information to the general public on how the competition will be organized and what it will take for one to win a prize. Advertisement may be done through placing advertisements in the newspapers, televisions, radios, billboards among other media. Posters will also be placed in all Allmart stores and in the premises of suppliers with who cross advertisement is planned. These adverts will target the regular customers who are already holders of the loyalty cards as well as those who do not hold the loyalty cards in order for them to apply for the cards, thus becoming eligible to participate. It is expected that once they have purchased the loyalty card, they will become regular customers thus boosting the customer base. Business Assessment Stakeholders Analysis The stake holders to be involved in the project include Allmart senior management which will be fully briefed on the development of the project in order for them to release the necessary resources and ensure the project is in line with the overall vision of the chain. The marketing team will also be involved in order for them to come up with strategies on how best the project can become effective in its objective of boosting customer loyalty and the number of visits a customer makes to the store. Other stakeholders will include the IT team which will be involved in development of the system. Should there be a lack of capacity in the department; the option of outsourcing the service to an external software developer should be adopted. If this option becomes necessary, it will be important for the developer to be fully briefed on what the system is expected to do, the number of customers expected at any given time and other details of the process to in order to enable them make the right decision regarding the system they are to develop. This development should be done in conjunction with the stores IT department in order for them to understand the system. It might be necessary to engage an external advertiser to design the adverts that will be used in the campaign. These will also have to work with Allmart marketing team to help them understand the concept preferred by the chain. The other group of stakeholders include staff in the chain, these include the managers, supervisors, cashiers, customer care representatives and floor attendants who will all be informed on the new campaign and what it entails, they will also be tasked to market the promotion to all customers especially those who do not have loyalty cards and encourage them to get the cards hence becoming eligible to participate. The other lot of stakeholders includes the suppliers who will be requested to provide the goods prizes and benefit from the advertisement that will come from the project. Existing and potential customers will also be important stakeholders in implementing this project. Their cooperation and enthusiasm will be vital to the success of this campaign. To gain their enthusiasm, it will be necessary for them to find the prizes on offer worth the effort to obtain the loyalty cards and also make the choice to shop at Allmart. This cooperation and enthusiasm will be gained through bringing in other enterprises that would benefit from sponsoring the campaign with prizes. This will reduce the burden of purchasing the prizes from Allmart, by spreading it across many players, therefore making the campaign sustainable and giving it weight. Work Breakdown Schedule Gantt Chart   Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Constitute PIC                                 Analysis for Software rqmnts                                 Devt & testing software                                 Analysis of advert rqmnts                                 Preperation of adverts                                 Installation & Testing software on site                                 Rolling out of advertising campaign                                 Project launch                                 Project Budget Item Amount $ Transport 20,000.00 Facilitation for meetings 20,000.00 Software Development 100,000.00 Marketing and advertisement 100,000.00 Equipment purchase 200,000.00 Total 440,000.00 Assumptions The main assumptions are: The new rewards system will work alongside the existing rewards system. The system will be trialled in some stores before the full scale implementation can be completed. Constraints The main constraints are: The system will be developed by an outside developer who has no real understanding of the workings of Allmart. Testing of the system must be done without interrupting the existing services Selection of the stores that will be used for assessment has to be representative of the dynamics in all the stores. References Schwalbe, K 2010. Information Technology Project Management 4th Edition. Course Technology, Canada. Read More