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resen a on

on

CRM and RETAILING

On the subject

Retail Marketing

Submitted by:

Nirmal Yadav

Roll No.54

INSTITUTE OF MANAGEMENT STUDIES

KURUKSHETRA UNIVERSITY

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Customer Relationship Management

CRM is a combination of policies, processes, and strategies

implemented by a company that unify its customer interaction andprovides a mechanism for tracking customer information.

A business philosophy and set of strategies, programs, and systemsthat focus on identifying and building loyalty with a retailers most

valuable customers

Customer relationship management (CRM)

Term applied to processes implemented by a company to handle itscontact with its customers

CRM is a software-based approach to handling customerrelationships

Store information on current and prospective customers.

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CRM Business Strategy Perspective

Three key phases 1. Customer Acquisition

2. Customer Retention

3. Customer Extension

Three contextual factors

4. Marketing Orientation

5. Value Creation

6. Innovative IT.

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CRM as Business Strategy

Three key phases

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1. Customer Acquisition

Attracting our customer

For the first purchase

We have acquired our customer

Growth Market orientation, innovative IT & value creation

Aim is to increase the number of customers that purchase from usfor the FIRST TIME.

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2. Customer retention

Re-purchase

Our customer returns and buys for a second time

This is most likely to be the purchase of a similarproduct or service, or the next level of product or service.

Growth Market orientation, innovative IT & value creation

Aim is to increase the number of customers that purchase from usREGULARLY

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3. Customer Extension

Additional, supplementary purchases

Our customers are regularly purchasing

We introduce products and services to our loyal customers different from original purchase

Once purchased, our goal is to retain them as customers for the extended products or

services

Growth

Market orientation, innovative IT & value creation

Aim is to increase the number of customers that purchase ADDITIONAL products

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CRM as Business StrategyContextual factors

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4.Marketing Orientation

Focused upon the three levels of needsof customers

Actual, tangible product

Core product and its benefit

Also the augmented product such as a

warranty and customer service.

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5. Value creation

Generation of shareholder value

Based upon the satisfaction of customerneeds (as with marketing orientation)

Delivery of a sustainable competitiveadvantage.

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6. Innovative IT

Updated IT

Efficient, speedy and focus upon customer needs

Whilst IT and/or software are not the entire story for CRM, it isvital to its success

CRM software collects data on consumers and their transactions

Organizations will track individuals, and try to market productsand services to them based upon similar buyer behavior seen inother individuals

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The CRM Process

CRM is an iterative process that turns customer datainto customer loyalty through four activities:

1. Collecting customer data

2. Analyzing the customer data and identifying targetcustomers

3. Developing CRM programs

4. Implementing CRM programs

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Collecting Customer Data:Customer Database

Transactions a complete history of purchases

Purchase date, price paid, whether or not the purchase was stimulated bya promotion.

Customer contacts by retailer (touch points) inquires to call center,direct mail sent to customer

Customer preferences.- what the customer likes,

Descriptive information about customer Demographic and psychographic data that can be used in developing

market segementation.

Customers responses to marketing activities

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Collecting Customer Data:

Identifying Information

Approaches that store-based retailers use:

Asking for identifying information Telephone number, name and address

Offering frequent shopper cards Loyalty programs that identify and provide rewards to

customers who patronize a retailer

Private label credit card (that has the stores name onit)

Connecting Internet purchasing data with thestores

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Privacy Concerns

Control over Collection Do customers know what

information is being collected?

Do customers feel they can

decide upon the amount andtype of information collectedby retailers?

Control over Use

Do customers know how theinformation will be used by theretailer?

Will the retailer share theinformation with third parties?

Steve Cole/Getty Images

http://www.oprah.com/

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Analyzing Customer Data

and Identifying Target Customers

Ryan McVay/Getty Images

Analyze the customerdatabase and convert the

data into information thatwill help retailers developprograms for buildingcustomer loyalty

http://www.oprah.com/

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CRM Possesses and System

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1.Understand and differentiate

Understand

Demographics, purchase patterns & channels

Segmentation to identify logical unique groups

Primary research to capture needs and attitudes

Customer valuation to understand profitability

Differentiate

Based on the value customers are expected to deliver.

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2.Develop and Customize

Develop

Products, services, channels and media can

be customized based on the needs of

quantitative customer segments.

Customize

Based on the potential

value delivered by

customer segment

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3.Interact and deliver

Interact

Not just through marketing, sales and media.

Distribution, shipping, customer service & online.

Deliver Delivering value is a cornerstone.

Factors including quality, convenience,speed, ease of use,

responsiveness and service excellence.

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4. Acquire and Retain Acquire

Learning about customers makes it easy to identify those producing the greatestvalue.

Retain

Maintain interaction;

Deliver on value

Customers change as they move through

differing life stages

Modify the service

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Benefits of CRM

Benefits of CRM include : reduced costs, because the right things are being done (ie., effective and

efficient operation)

increased customer satisfaction, because they are getting exactly whatthey want (ie. meeting and exceeding expectations)

ensuring that the focus of the organisation is external

growth in numbers of customers

maximisation of opportunities (eg. increased services, referrals, etc.)

increased access to a source of market and competitor information

highlighting poor operational processes

long term profitability and sustainability

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Retailing

Retailing

A set of business activities that adds value to

the products and services sold to consumers

for their personal or family use.

A retailer is a business that sells products

and/or services to consumers for personal

or family use.

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NEED FOR CRM IN RETAIL

Changes in the Business Environment

Customers becoming more demanding

Market share saturated

Databases today are huge:

Databases a growing at an unprecedented rate

Decisions must be made rapidly

Decisions must be made with maximum knowledge

Need for CRM in Retail

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Extremely large datasets

Useful knowledge that can improve processes

Can not be done manually

Sophisticated data search capability that uses

statistical algorithms to discover patterns and

correlations in data.

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