Kudler Loyalty Program Flow Chart

Kudler Fine Foods has expressed a desire to track purchases at the individual customer level. The basic process by which this will work is this. At the checkout, the customer will bring the items for purchase. The existing system can log what purchase are made, and what purchases are made together. That is data already gathered. What Kudler wishes to build into this system is its loyalty program. This additional layer of information provides Kudler with data that links what it knows about its customers with what it knows about purchases. The customer loyalty program highlights demographic information about buyers, and their purchasing habits, such as how often they shop and what their average ticket will be.

By combining this data, Kudler will have better information that can be used to target sales and promotions, because it will be able to offer customers promotions that are more likely to get them into the store. As an example, if Kudler sends out an email to all loyalty members about its weekly flier, the top item displayed in the email, even in the subject line, would be something that this person is most likely to purchase. Thus, the email will be more enticing and theoretically more effective. This data can also be used in assisting with new store location decisions by aligning demographics of Kudler's customers with the demographics of potential new locations. Indeed, if Kudler finds that one area is contributing a lot of business to a store three towns over, that is a pretty good indication of a potential new location. So there are several good reasons for gathering this data, and it can clearly be used to create competitive advantage for Kudler.

The requirements for the new system are as follows. First, it must be something that can be scanned at the checkout. The customer can have a card, preferably a small card that attaches to a key ring. The customer must also be able to access the account another way, such as with their phone number. This helps customers when they forget their card. Third, the customer has to be able to access their account when they go onto the Kudler website. When the customer's card is scanned, the account is then linked to the transaction.

At that point, the functionality switches to the back end. Kudler needs an additional field on every transaction in its data set, so that the account number can be linked for data processing purposes. The system has to be able to accept transactions where there is no account, by defaulting to a null value when no account is entered. When queries on run on the data, there needs to be a link between the account number and purchase information that allows the software to access the different demographic data that is linked to that account number. For example, Kudler might want to estimate how many hot dogs to order for the Fourth of July at a new store. It knows there will be a spike, but how much? The answer could come from older stores with similar demographics. If it knows that nationwide, certain customers buy 200% more hot dogs that weekend, and the new store has 50% of its customer base of that certain customer type, then the system can crunch out an estimate of how many extra hot dogs the new store will need to order.