Sample Essay on Introduction of a customer Loyalty Program Service for Wal-Mart

Introduction of a customer Loyalty Program Service for Wal-Mart


A loyalty program is a tailor made marketing structure that entices clients into consuming specific type of goods with an aim collecting points towards a higher level of service or an incentive. Customer loyalty is also known to be one of the most rewarding bonding forms between a firm and its clients, yet at the same time, it helps to boost and build trust raising the company’s portfolio to greater heights.

Retail markets using the programs have also proven accomplishment records of faithful clients always wanting to buy more from the stores (Hughes 124). The sensation of buying to be more rewarded a very appealing to many, if also to consider Wal-Mart has a huge client base around the globe.

Implementing a loyalty will help bring new benefits to the company

How Customer Loyalty Program Works

Implementation of a loyalty program is carried out the issuance of loyalty card to its clients. A loyalty card is also electronic identity card given by a company to its clients for collecting or points each time a client buys a product or service from a given company. Clients can also use the card to collect gifts and receive discounts from the company.

When a client shops at Walmert, he or she is entitled to points depending on the amount of money spent. These points can also be converted to equivalents of cash and is used by clients to shop from the stores. Therefore, clients shall always pay less. Besides Walmart can run different promotions based on the amount of points they have on their cards. For example, clients can redeem up to 200,000 points to get a smartphone.

Project Description

Wal-Mart boosts up to 5,500 global stores operating in 27 countries (Wal-Mart Stores 14). This is a huge figure compared to many of its competitors across the globe. If the company takes advantage of investing in client loyalty, it is beyond doubt that numbers are bound to increase. This is based on the fact that clients yearn for a new experience while shopping and at the same time being cautious of retail prices.

If customer loyalty program is implemented, clients will always be persuaded to purchase more in the long run. Consequently, this triggers the revenue for the company to climb up to greater heights. Customer loyalty program is also an irresistible platform that one can invest in, especially if a firm seems to tighten bonds with its clients (Zentes 56).

Furthermore, customer loyalty cards are designed with microchips that can comfortably keep tract of client data. It is a step that also tracks the interests of a client in specific product brand eventually offering a feedback to suppliers on the type of goods that are highly preferential to the clients.

For example, if client A consumes most of product P and frequently uses his or her loyalty cards for shopping, the firm can keep track of how often product P is consumed. At the same, it offers a feedback to suppliers of the amount of product P should be supplied. In the meantime, customer a preferences may vary a great deal depending on personal tastes of clients. Therefore, suppliers can always create a worksheet that keeps track of favorite consumables of a client and send a distress signal.

This is also a very simple illustration of how the program works and goes an extra mile to create mutual benefit between the company and its clients. Therefore, there is no doubt that despite the program at hand, Wal-Mart has an inevitable opportunity to increase and retain its client base.

The Cost

Implementation of a loyalty program shall cost $50,377,240. This is almost 0.3% of Walmart’s net income.

Line Item Labor Materials Other Total
Feasibility study $ 270,000   $ 23,000 $ 293,000
System layout and design $ 459,000   $ 49,540 $ 508,540
Database Integration $1,825,000   $ 150,000 $ 1975000
Installation of systems and software $ 9, 500,200 $ 22,000,000 $ 280,000 $ 31,718,200
Launching and marketing $ 2,400,000 $ 5,620,500 $ 7,800,000 $15,820,500
Total $ 14454200 $ 27,620,500 $ 8,302,540 $ 50,377,240




Loyalty programs at the startup stages and installation are quite expensive and therefore, to prevent a risk factor, the project will run within a specific period and on a pilot program, for about 3 months. This will also enable the company to closely keep track of customer reaction to a new system and to reduce overall launching costs of the project before it stands out on its feet. Below is a summary of a systematic procedure used in developing a workable loyalty program.

Building a solid loyalty strategy plan

This involves a lot of creativity. Building a successfully loyalty program is imperative in creative its focal parameters. In this case, the most viable plan that is considered cost effective is also concerned with plastic cards usage. There are many plastic card suppliers in the market with Innovate Graphics in Charlotte, N.C, Longbehn and Co., Inc. and Inc.-Downers Grove Illinois being the major ones.

Wal-Mart can therefore enter into partnership with suppliers for them to access card services at an agreeable cost.

Embracing a loyalty mindset company wide

This aims at offering a psychological change in the way Wal-Mart considers loyalty of its suppliers, employees and other third parties involved. It is imperative for everyone to support, approve and understand how the program works from top management to the lowest.

If possible, Wal-Mart can conduct training for its employees in respect to how to embrace the program and even provide franchise materials to be used for advertisement purposes.

Setting up the system

A functional system must be put in place for a loyalty program to run smoothly. These includes different tasks such as developing efficient and effective software plans that monitor client records of accomplishment, calculate redeemable points for each client and register current clients as well as new ones. Wal-Mart may also consider an agreement with a trusted software provider which, is in most cases available as a complimentary service by manufacturers of plastic cards.

Setting up the program in a broad area that not only deals with software system also plays a crucial role that should be aligned with Wal-Mart and its close associates.

Marketing and Launching

Since the system will progress on a pilot program, it will not cost Wal-Mart much as far as advertisement is concerned. However, mini advertisement methods can be employed to steer the popularity of the business in question to a given market. They include online promotions, e-mailing, texts, in store advertising and social media use.

Following an extensive research on the progress of the products, loyalty programs can also be launched to a larger company client base.

Project Merits

Woolf, who is an expert in customer loyalty program systems describes the benefits of loyalty programs as ‘ ‘ an endless merit that runs till infinity’’ (67). Besides endless client relation experience, loyalty programs have also been proven as great sources of business success. This is especially in the retail industry.

They are also meant to encourage clients to purchase more goods and despite the revenue factor, loyalty programs come with many benefits to the company and to the clients.

Retaining existing clients

The customer loyalty program system provides data information that enable client needs to be addressed effectively. Through such an engagement, enthusiasm for the product by clients increases thus giving more reasons to stay.

Acquiring new clients

New clients are essential for every business because it indicates growth. Wal-Mart is a global company known for its low cost policy (Reuters 5). Introduction of loyalty cards would be great news for clients who were previously hesitant to shop at the company. This will in the long run increase client base.

Increase customer lifetime value

Customer lifetime value is imperative in measuring worth of its clients. It helps in client value expectations over a lifetime thus; marketers can efficiently use C.L.V to gauge whether its product is working.

Deselecting unprofitable clients

It is highly to lose bad clients than to gain new ones. This group of clients also known as ‘‘Cherry pickers’’ are more interested in buying products placed on discounted lines. It is through such loyalty programs that better clients can be rewarded based on their purchase details and frequency of their consumption of non-discounted products.


Besides having existing card services offered by Wal-Mart including Refundable Master Cards, Credit Cards and Visa Debit Cards, customer loyalty card would be a great move in expanding the corporate image of a company as a provider of multiple billing methods. Additionally, to show a clear distinction with the cards earlier stated, the loyalty card in specific is less prone to fraudsters because its content is made up of reward points for the client and not cash. I believe this is an incredible opportunity for Wal-Mart to outshine itself once more as a leading retail store across the globe.

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Works Cited

Hughes, Arthur M. The Customer Loyalty Solution: What Works (and What Doesn’t) in Customer Loyalty Programs. New York: McGraw-Hill, 2003. Print.

Reuters. Wal-Mart Stores Inc (WMT.N). 2013. Print. 30 October 2013.

Wal-Mart Stores. Our Mission: Saving people money so they can live better. Global Sustainability Report. Arkansas: Wal-Mart, 2013. Print.

Woolf, Brian. Loyalty Marketing; 2nd Act. U.S.A. .2001. Print.

Zentes, Joachim, Dirk Morschett and Hanna Schramm-Klein. Strategic Retail Management: Text and International Cases. Wiesbaden: Gabler, 2007. Internet resource.