Sainsbury's Argument Against Tesco Mailing

Creating the mailing
There were strong arguments against Tesco when it made its decision to mail every member of its loyalty program four times a year. Why make customers wait for their reward? Why not let them take it as and when they feel like it by claiming it at the checkout and getting an instant discount on their shopping? Why go to the massive extra cost of sending out millions of mail packs? Where the questions that were asked.
When Sainsbury’s launched the Rewards program, they rejected the concept of accumulated value, deciding to let customers take rewards on demand. Yet this also dissipated the effect of the Rewards investment, turning it into a small discount casually accepted and often taken for granted by most customers. Nectar, the replacement scheme for the Reward Card, had adopted the Tesco mailing scheme.
Keith Mills, the creator of Air Miles who now also runs Nectar agreed that Tesco got it right, adding another disadvantage of rewards given only on demand.
“One of the problems with the Sainsbury’s idea of giving rewards at the checkout was that there was no incentive for customers to tell you where they live. The value of the data they give you quickly goes out of date.”
(Clive Humb, Terry Hunt, Tim Phillips, 2004, p. 72)

However it was not the first, but it more single-minded and ultimately more successful. What the marketers at Tesco had the imagination to exploit was the growing Clubcard data to target the magazine in a way that some publishers only dream of. Such is the proven value of this targeting that today if a brand wants to advertise in Clubcard Magazine, a page (a page is only half the size of an A4 page) will cost up to £37,000. They are competing with national magazines who sell their advertising between £5,000 and £7,000. The advantages of a magazine were obvious: a free magazine would make the mailing statement even more valuable, it would also support the ‘Thank You’ theme. It would be a way to promote featured items in the store and inspire readers to spend their clubcard vouchers on a new or premium product. It would be a medium to talk about the complete loyalty card story, updating customers on store improvements and new ranges. [4], Clive Humb, Terry Hunt, Tim Phillips, 2004, pp.