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Jared O’Connor Member Acquisition Summer Project Member Acquisition Proposal The Challenge In a retail world that continues to expand, change, and fluctuate, the challenges of identifying and implementing effective marketing strategies are increasing exponentially. The umbrella term marketing represents a wide array of conceptual models, strategies, and goals, but the specific task of this project was marketing materials in relation to member acquisition. In all areas of business, but specifically in club model retailers, the need to acquire new customers is of the utmost importance in order to promote the longevity and growth of the business. Considering the average age of a BJ’s member is over fifty years old, the need to acquire new, younger members is the prevailing challenge of member acquisition and would represent millions of dollars in revenue, if properly achieved. As such, our group was tasked with identifying marketing materials, strategies, and platforms that pertain to a highly valuable target demographic: millennial, smart saving families. We respond by identifying an inherent disconnect between the core business model and current marketing practices, propose a new macro level marketing theme, and suggest specific avenues and platforms that pertain to younger, smart saving families. The Opportunity In order to achieve a more effective, coherent marketing framework, we suggest a fundamental departure from an affective, emotional oriented campaign as it is incongruent with BJ’s core message of superior value proposition. This recommendation is based on a reevaluation of consumer sophistication, in relation to the target demographic, and further suggests a macro level shift to a basic, informational, emotional, and value driven marketing message. This value-centric message will equip prospective members with the necessary information to effectively receive the value proposition of BJ’s. We maintain that this shift in marketing theme directly pertains to the defining features of a smart saving family: pragmatism and economic rationalism. By facilitating a better understanding of how the BJ’s club model is designed to confer superior value, economic

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Page 1: Member Acquisition Proposal

Jared O’ConnorMember Acquisition Summer Project

Member Acquisition ProposalThe Challenge

In a retail world that continues to expand, change, and fluctuate, the challenges of identifying and implementing effective marketing strategies are increasing exponentially.  The umbrella term marketing represents a wide array of conceptual models, strategies, and goals, but the specific task of this project was marketing materials in relation to member acquisition. In all areas of business, but specifically in club model retailers, the need to acquire new customers is of the utmost importance in order to promote the longevity and growth of the business. Considering the average age of a BJ’s member is over fifty years old, the need to acquire new, younger members is the prevailing challenge of member acquisition and would represent millions of dollars in revenue, if properly achieved. As such, our group was tasked with identifying marketing materials, strategies, and platforms that pertain to a highly valuable target demographic: millennial, smart saving families. We respond by identifying an inherent disconnect between the core business model and current marketing practices, propose a new macro level marketing theme, and suggest specific avenues and platforms that pertain to younger, smart saving families.

The OpportunityIn order to achieve a more effective, coherent marketing framework, we suggest a

fundamental departure from an affective, emotional oriented campaign as it is incongruent with BJ’s core message of superior value proposition.  This recommendation is based on a reevaluation of consumer sophistication, in relation to the target demographic, and further suggests a macro level shift to a basic, informational, emotional, and value driven marketing message. This value-centric message will equip prospective members with the necessary information to effectively receive the value proposition of BJ’s. We maintain that this shift in marketing theme directly pertains to the defining features of a smart saving family: pragmatism and economic rationalism. By facilitating a better understanding of how the BJ’s club model is designed to confer superior value, economic rationalism can be used to drive member acquisition more effectively than emotionally based advertising.

Current PracticesThe “smart saving family” has been clearly identified as the target consumer profile of

BJ’s members and this archetype directly extends to member acquisition.  A typical smart saving family is not particularly affluent, with household incomes anchored in the middle class; as a result, these families seek to maximize the utility of their spending .These families are confronted with stringent economic constraints and respond by being economically rational and pursuing the best value in a given marketplace.  Considerations of key value items, which are items that dynamically contribute to price perception and the constant examination of price sensitivity at the executive level, speak to the inherent economic pragmatism at the core of BJ’s members.  Despite delivering superior value being the central pillar of BJs’ business model, and economic rationalism being a definitive feature of a BJ’s member, current marketing materials are tailored away from concrete value proposition and towards affective, emotional based material which represents a fundamental problem. Affective advertising, which appeals to the emotion of prospective members is not likely to be effective when targeting economically

Page 2: Member Acquisition Proposal

Jared O’ConnorMember Acquisition Summer Project rational families; instead a message based in the economic value of a BJ’s membership is more instructive. In short, a fundamental shift in marketing tactics is required to properly target the highly valuable millennial cohort; a simple economic message of value proposition is most consistent with the concept of a smart saving family.   BJ’s must develop new, informational based marketing which seeks to simplify how the club model and BJ’s delivers superior value to smart saving families.

Basic ProposalThe defining feature of a smart saving family is economic rationality and pragmatism.

These families seek the most return available when spending in a market place. While consumers are economically rational and seek the maximum utility for the money they spend, an incomplete or inept understanding of club model retailers serves as an impediment to understanding the value proposition of BJ’s in comparison to the market and by extension, an impediment to driving member acquisition. An understanding of club model retailers is an esoteric abstraction that is not easily grasped by the general member of the target demographic. Before prospective members can recognize the superior value a membership can deliver, a basic understanding of how these savings are delivered is instructive.  In short we develop the following framework: if a prospective BJ’s member is defined by economic pragmatism and BJ’s does in fact deliver superior value, than simple economic rationality will direct prospective members to BJ’s as they rationally pursue savings. It must be considered that economically rational prospective customers can only exercise their rationality to the extent which they understand the firms in a given market and how their value propositions compare.  In other words, because third party data confirms BJ’s superior value proposition, marketing materials can simple appeal to the economic rationality of consumers which is more effective and predictable than appealing to the emotions of consumers. Simply ensuring prospective members have an adequate understanding of BJ’s model, how it cuts costs, and how these reduced costs translate to savings for the member, could increase member acquisition. Materials which explain how an upsized scale pack translates to savings, per item, for the member, which explain how BJ’s low cost, no frills presentation translates to savings, and which highlight how BJ’s offers superior value in comparison to supermarkets are required. It is essential that BJ’s avoids the misguided stigma that it is simply a destination for large quantity pack sizes and select niche items and instead work to confer an understanding of the value proposition of BJ’s. An effective marketing campaign would first ensure members understand the cost saving benefits of club and wholesale retailers, explain what differentiates BJ’s from other club models, and finally pair this information based material with a supplementary affective theme.

ConclusionIn short, we recommend future marketing materials work to exploit the defining feature

of the smart saving family: economic rationalism. Smart saving families exist in the context of stringent financial restraints and respond by seeking the best available value in the market place. Therefore, a focus on value proposition is most likely to drive an incremental increase in membership acquisition. Independent data which substantiates BJ’s claims of superior value proposition should be emphasized in future marketing materials as it serves to legitimize perceptions of value in the minds of consumers. By highlighting independent data regarding BJ’s value proposition and ensuring prospective members understand how BJ’s business model is designed to deliver value are essential to driving member acquisition in the future.

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Jared O’ConnorMember Acquisition Summer Project