You have been Appointed as the Marketing Manager of Morrisons to Ensure Their New Loyalty Card: Relationship Marketing Report, Singapore

Subject Relationship Marketing

Assignment Details:

You have been appointed as the Marketing Manager of Morrisons to ensure their new loyalty card is fully integrated as part of their CRM strategy. Making use of the information from the Morrisons case study as well as your further research, you are required to address the following two questions as in a single report to senior management.

Question 1: Using the CRM Buttle Value Chain Model, produce a report to show how the various stages in the model are incorporated and used to design the “Match and More” card so as to effectively retain customers.

Question 2: Identify opportunities for using sales force automation to enhance the ‘Match and More’ loyalty programme offered at Morrisons.

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Morrisons was founded over 100 years ago, as a stall in Bradford market. It has been a family business for most of the time since. Under Sir Ken Morrison’s 55-year leadership, until he retired in 2008, the company grew steadily ‘from market stall to superstore.’ With over 450 stores, it is now the UK’s fourth-largest food retailer.

Differentiating the business

Amongst the large supermarkets, several features make Morrisons stand out and differentiate it from competitors. By promoting its ‘fresh approach’ and commitment to sustainability, customers become aware of the freshness of its food and its concern for the environment. Morrisons holds great control of its supply chain known as the ‘field to fork’ approach. As a result, it possesses more control over the quality of its produce.

This helps create a competitive advantage. Fresh produce is sourced locally wherever possible, which is then processed in Morrisons’ own manufacturing facilities. Fresh produce is delivered into its own temperature-controlled warehouses and packing plants in the UK and abroad. Produce is then carefully transported to stores nationwide. This vertical integration allows Morrisons to support local producers and UK farmers.

Achieving competitive advantage

Morrisons employs more specialist butchers, fishmongers and bakers than any of the other UK leading supermarkets. Morrisons’ fresh and innovative business focus is reflected in its approach to recruitment. In 2010 it employed more than 131,000 people who served over 11 million customers each week. It offers career opportunities in a variety of areas including logistics, manufacturing, specialist trades, IT, marketing and finance.

Morrisons prides itself on its dedicated approach to career advancements through its ‘shop floor to top floor’ approach. Morrisons is passionate about creating careers for fresh new talent. This is reflected in its aim to attract 1,000 new young people to join the team next year. Morrisons won the Employer of the Year Award at the 2011 Grocer Gold Awards. This demonstrates the focus it places on colleagues and their ability to deliver fresh produce and exceptional customer service.

This case study shows how Morrisons uses customer service to differentiate itself from its competitors, motivate its colleagues and help the business to grow.

Customer service

High quality customer service is a key way in which a business can differentiate itself from another. Morrisons’ customer service strategy is simple: to provide the best customer service by developing the best-trained and motivated colleagues within an environment where the top large supermarkets compete for market share. Its specialist in-store butchers, bakers and fishmongers work on Morrisons’ Market Street to ensure customers get personalised service from a trained professional. By building high levels of customer satisfaction, Morrisons creates a significant competitive advantage.

Delivering customer satisfaction

To provide the best customer service, a business needs to know what its customers expect of it and then meet these expectations. Customer satisfaction is vital for keeping customers happy and loyal to the business. It can often be much more cost-effective to retain customers than to attract new ones. Morrisons achieves this by offering products and services, through its Market Street, that is not offered by its competitors, therefore, maximising customer retention.

Morrisons has invested heavily in training and developing colleagues to generate its high-quality customer service and has attracted more customers this past year than ever before. This shows that Morrisons’ customers are becoming more satisfied with its focus on personal service, efficiency, reliability, quality and freshness. Quality customer service adds value as it improves customers’ experience, making them feel valued and therefore more likely to become a repeat customer.

Customers expect to be valued and to be assisted by helpful and friendly colleagues. They need clear information and good aftersales service. They also want their queries dealt with competently, quickly and accurately. They seek value for money and high levels of colleague knowledge and expertise.

Elements of customer service

Four key components of customer service are:

  • Information – this includes information given directly to customers by colleagues and details given on published material such as websites, packaging, catalogues and leaflets. In-store, directions and signs to products allow customers to navigate through the store more effectively.
  •  Specialist attention – advice must be accurate, available when and where customers need it and from colleagues who know what they are talking about. At Morrisons, this includes expertly trained specialists such as butchers and fishmongers who advise on the best meat or fish for different menus as well as how to cook it appropriately.
  • After-sales service – this refers to all areas of customer involvement once the sale has taken place. It includes packaging, guarantees, complaints, refunds and exchanges. At Morrisons, helpful and friendly colleagues deliver an exceptional checkout experience to help retain customers.
  • Convenience – this includes the location of stores, ease of access and car parking, availability of public transport and convenient ways to pay, such as cash, card and ‘chip and pin’ facilities. At Morrisons, 5% of all car parking is dedicated to blue badge holders to enhance accessibility for those with recognised disabilities.

Measuring customer service

Morrisons measure its customer service in a number of ways. Quantitative measurement often takes place through exit surveys in every store each month. Qualitative measurement often takes place through methods such as mystery shops, which allows the gathering of customer opinions and comments.

The ‘Morrisons miles’ card rewards regular petrol station users who collect points from fuel purchases with shopping vouchers to spend in-store. This helps to retain loyal customers by rewarding them regularly for repeat purchases.

Morrisons focuses on customer service through an initiative called ‘HOT’ which stands for ‘Hello, Offer, Thank-you’. The focus of ‘HOT’ aims to bring Morrisons’ colleagues and customers closer together with its principle aim to: ‘Establish rewarding experiences which create an emotional relationship between the customer and the store.’

Encouraging customer-focused behaviour

The behaviour of Morrisons’ colleagues has a direct influence on the level of customer service received in store. To ensure that colleagues perform to the best of their ability, Morrisons offers extensive training and development opportunities and recently won the title of ‘Employer of the Year’ at the 2011 Oracle Retail Week Awards for its dedication to colleague skills development and training. Training is the process that directly benefits the business.

Development benefits individuals through enhancing their skills. Morrisons’ philosophy of ‘learn while you earn’ means that existing colleagues and new recruits can gain qualifications and experience whilst working. This benefits both themselves and the business.

The ‘one-team’ approach

Everyone at Morrisons from store colleagues through to head office and throughout the supply chain are part of ‘one-team’. This approach prevents inter-departmental competition at the expense of customers’ experience. Instead, everybody works together to help provide the best service possible. Rewards for team members range from colleague discounts and long service awards to profit sharing.

Everyone has the opportunity to share in the success of the business over the year with a lump sum payment related to earnings.

The benefits of customer service

Morrisons focuses on developing colleagues in order to satisfy customers in the best way possible. Colleagues are encouraged to engage with customers and help them to feel that they are a part of the Morrisons’ family. This helps create loyal customers by offering the best fresh produce and excellent customer service. Colleagues are trained to help play a key role in delivering good customer service. Colleagues are therefore an integral part of the customer service offering and their training helps them to deliver this. The high levels of customer service at Morrisons leads to satisfied customers and repeat trade, with the number of customers visiting the store up from 10.5 million to 11 million per week.

Supporting business objectives

It can be seen that good customer service feeds directly into strategies for improved business performance and business growth. The emphasis placed on customer service also helps with colleague motivation. When colleagues receive positive customer feedback, this makes them proud which in turn motivates them to deliver even better customer service. Praise from customers fed back to colleagues is one of the key positive outcomes of delivering quality customer service for any colleague at Morrisons.

Making a difference

Morrisons has launched the latest attack in the escalating supermarket price war with its new “Match & More” card. The scheme aims to match the prices of the German discount chains Aldi and Lidl, which have soared in popularity in recent years, enjoying double-digit growth in sales, while the “big four” – Tesco, Asda, Sainsbury’s and Morrisons – have continued to lose market share. Morrisons was hit particularly hard this year, with sales falling by 3.8% in the 12 weeks Sept-Dec’14. To combat this, its loyalty card has been designed to encourage customers to shop more frequently as they try to build up their points to earn a £5 money-off voucher. The card also enables the company to gather more customer data to help it target shoppers with loyalty offers.

Morrisons is the first grocer to include Aldi and Lidl in a price-matching offer. Andrew Stevens of Verdict, a retail consultancy, said that Morrisons’ decision to match the discount retailers’ prices was “incredibly bold”.

“Whether shoppers will be enamoured with the scheme remains to be seen; with a slow roll-out initially and such ubiquitous price-based marketing out there already, it may take some time for Morrisons to see decent levels of participation,” he said.

How does the card work?

Shoppers must first register online to start earning points on the loyalty card. You will have to fill in an online form, giving details such as your date of birth, how many people there are in your household and your postcode. Your card will then be posted to you.

When you have done your shopping, the card will be swiped at the till and the cost of your goods compared with products at Tesco, Asda, Sainsbury’s, Aldi and Lidl. If they would have been cheaper elsewhere, points are added to your Match & More card, with 10 points equal to 1p. So, if the shop would have been £1 cheaper elsewhere, you will get 1,000 points.

When you reach 5,000 points – the equivalent of £5 – you will be handed a £5 money-off voucher to use the next time you shop. The “more” element of the card gives shoppers additional points on “hundreds of products in store and online”, as well as 10 points for every litre of fuel bought from Morrison’s petrol stations.

Is it any good?

If you don’t normally shop at Morrisons, there may be little point taking out a card. With only 500 Morrisons stores across Britain, compared with about 3,000 Tesco stores, for instance, Morrisons isn’t a local supermarket for most people, so travelling farther to earn some points is hardly worthwhile.

Also, products in the chain’s 129 “M Local” convenience stores will not be eligible for price-matching. Price-matching is available if you shop at Morrisons online, however . Shoppers also have to spend a minimum of £15 to qualify for price matching. If you do smaller, more frequent shops, this could be a drawback.

One big bonus of the card is that it price-matches against branded and own-brand goods, as well as items on the promotional offer. This differs from Sainsbury’s price match offer, which doesn’t include comparisons against own-brand goods.

Customers will also be able to use their £5 money-off voucher for up to 56 weeks after it is issued. Vouchers from Tesco, Sainsbury’s, Asda and Ocado expire much sooner.

Will my basket of goods be cheaper at Morrisons?

Asda is the cheapest supermarket, according to an analysis of 89 branded products by Which? This suggests that price-matching at Morrisons on certain goods will result in points being accrued when equivalent products at Sainsbury’s and Asda were cheaper.

Other price match promises

  • Asda – If Asda isn’t 10% cheaper on your comparable grocery shop, it will give you the difference. Price matches against Morrisons, Sainsbury’s, Tesco and Waitrose
  • Tesco – If grocery shopping would have been cheaper elsewhere, Tesco will give you a voucher for the difference, up to £10. Matches against Asda, Morrisons and Sainsbury’s
  • Sainsbury’s – Matches only against Asda. If you could have paid less at Asda, you receive a coupon for the difference. You need to buy a least 10 different products to qualify.
  • Ocado – If shop isn’t cheaper than, Ocado will give you a voucher for the difference, up to £10


Morrisons aims to be the best supermarket for fresh foods to give it an advantage over its competitors. This is achieved through its unique ‘field to fork’ integrated approach which allows it to control its own supply chain to ensure that food is fresh and of the highest quality.

With the bold move to launch the new loyalty card, Morrisons needs your help to ensure the scheme is fully integrated into their CRM strategy.

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