4. CONCLUSIONS
4.2. Future research directions
In the case of implementing a customer value metric to the Myiittala customer loyalty program, it became evident already in the beginning how vital and imperative it is for a company to have visibility to the customer level margins. All calculations executed in this masters’ thesis rely on the average sales margin of the retail chain and webstore. This leads to a misleading end result: we are not able to pin point those customers, who only buy discounted products, nor are we able to see what the real reason to join the program is for the customer.
A number of research directions rose during the master’s thesis project. First, it is highly recommended that as soon as the new KPI for customer specific margin is in place, Fiskars runs another analysis regarding customer lifecycle value and customer profitability. The same analysis should be done in other markets as well in order to gain a full picture of the whole program and how the profitability falls into different markets and countries. As different markets have different pricing policies, it can be seen that comparing the profitability between the different markets would be a very interesting and insightful exercise.
Secondly, as Kumar (2006) pointed out, the relationship between loyalty and profitability is much weaker and more nuanced as claimed; it would be interesting to study this relationship within Myiittala too. The last time the Myiittala members were asked about their preferences or ideas was when the program was in the designing phase. It would be good to interview some members in order to find out more about the relationship between loyalty and profitability. Through this exercise the company would gain information on how to develop the program further and what benefits the customers really value other than the monetary ones..
Thirdly, once the data is in for individual customer profitability and value, and the relationship between loyalty and profitability is analyzed, it would be interesting to have insight into the financial situation and personal preferences of various customer segments.
This could be done by enriching the existing data with for example Fonecta’s customer behavioral data. Through enriching the data the company would be able to see where their most profitable customers live, what are their interests and values, where do they shop and how do they behave online. However, before doing this it should be determined for what this
information is needed for and how would the company use it in the decision making.
Managers often wish to have more information and through customer loyalty programs a big amount of data is already collected and not used. This is an important matter to keep in mind while designing new ways to gather and maintain information. The first question should always be that what you would do differently if you had this information.
Fourth research path and a place for improvement within Fiskars can be seen in category management, where the Myiittala database can help to improve the inventory policy, as well as guide the pricing and promotion policy. The need for the category management within Fiskars retail is evident and also advocates the investment in the customer margin report acquisition in the cash register system.
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