crm project final

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1.1 INTRODUCTION

With the plethora of goods and services available in almost every sector of industries, the

educated, well bred customers have a variety to choose from, and every business wants the

customers to choose its products. This results in incessant luring of customers, done in all

possible manners. The activity of attracting customers was present even in the yesteryears of

business but not to the extent and intensity it has gained today. Today managing customers

has turned into a well formulated, well studied science and art, known as Customer

Relationship Management and of late Customer Relationship Marketing or CRM. CRM

can be defined as an activities that an enterprise performs to identify, select, acquire,

develop and retain increasingly loyal and profitable customers. CRM integrates sale,

marketing and service functions through business process automation, technology solutions

and information resources to maximize each customer contact. CRM facilitates relationships

among enterprises, their customers, business suppliers and employees.

As defined by the management gurus of CRM Customer Relationship Marketing is a

business strategy to select and manage the most valuable customer relationships. CRM

requires customer centric business philosophy and culture to support effective marketing,

sales and service process. CRM applications can enable effective Customer Relationship

Management, provided that an enterprise has the right leadership strategy and culture.

Keeping in mind the pace at which technology is changing today, any company which is astep ahead of others because of some product or services will not be able to hold on to that

advantage for long. Key to stability in todays dynamic marketplace is forging long-term

relationship with the customers.

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1.2 History of Managing Customer Relationship

Pre industrial age: relationship between producer and consumer

Traders who sold artesian products/ commodities in faraway countries did it through a

trading partner whom they trusted and who in turn understood the local needs of the market.

Information systems about consumers were personal knowledge held by individuals.

Industrial age: Mass production/creation desegregation between producer and

consumer

It has the benefit of reducing per unit cost through volume production and quality control by

production automation. Relationship moved primarily on cost advantages offered by

producer. As production is high, there was a push from the manufacturer to push the products

into the market.

Service economy age: production combined with intangibles to deliver solution to

consumers

Co-creation of values for the user through collaboration became an essential ingredient for

success of both parties. It meant efficiency enhancement for the buyer and oppourtunities for

additional revenue streams to the supplier if their relationship moved beyond just selling

transactions.

Since products become commoditized due to standardization of the manufacturing techniques

and application of basic qualities tools- one enterprise differentiates its products from othersin the market on the strength of the relationship with its customers.

Knowledge Economy Edge: Information combined with products and

services to deliver personalized customized solutions

Current increasing digitization of knowledge and powers of internet have led to

classification of the present age by some as the knowledge economy- where

value creation is happening through collaboration of knowledge workers across

different geographical boundaries.

Industrial age Relationship economy

Functional orientation Process orientation

Customer as a recipient Customer as a driver

Transactional management Collaboration

Batch mentality Real time mentality

Relationship needs arise out of four goals that exist when an organization and

consumer are engaged with each other on a win-win basis:

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Need fulfillment Goal: At the fundamental level it is supplying a solution

customized to the needs of the consumer- stated or latent

Economic goal: A consumer seeks saving by being in a relationship- while an

organization seeks to maximize the share of wallet in cultivating relationship.

Security goal: to the consumer a relationship provides a cover of

trustworthiness- in case of any problem during the purchase of product or its

uses.

Esteem goal: a consumer likes/appreciates acknowledgement and prestige

enhancers for patronizing a companys products and services.

1.3 Key principles of Relationship Management

1. Manage customer as an asset: - Understanding andmanaging value creation of each individual customer for a win-winperspective.In order for a relationship to be meaningful to the customers it has to be

unique and valuable to them. In the present scenario when all and

sundry product or service is trying to forge a unique relationship with the

consumer, forging a close and committed relationship requires a constant

reaffirmation of both parties to each other that there is value addition toeach while engaging with one another.

Example is one of the loyalty program offered by American Express Cards

which charges an annual fee for its loyalty club membership and in turn

rewards the members on the basis of their usage and age of relationship.

In this way consumers spend more on their cards foe encashing the

benefits.

In order to achieve customer asset appreciation, there is an underlying

need to understand and appreciate the context in which a product/service

is put to use in a customers day to day life.

2. Rate customers on the basis of their profit stream-current and future potential: - In order to establish ameaningful and mutually beneficial relationship at different levels ofengagement customers are classified on their profitability potential on alife cycle basis.Often the current spends are used as the basis for classification of

customers while developing relationship programs but this approach has

some demerits:

Current spend does not necessarily imply 100% share of the wallet.If revenue profit maximization is the objective then this approach

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fails to include the large section of the customers who may havemultiple relationships for the same product/service.

Merely classifying on current spend is a snapshot that has nocorrelation with future spending potential.

3. Customize relationship to individual customer-using

information based decision making capabilities: -today information technology systems are enabling organizations tomaintain 1:1 relationships with their consumers. Today the individualpreferences and needs are being catered. Whether it is an attribute of aproduct design, service specifications or channel customization is the keyto make the relationship more meaningful and personal.

4. Implement innovative ways and means to get closeto the customer to hear the Voice of theCustomer: - True customer intimacy- the backbone of a successfuland rewarding relationship requires a deep understanding of the contextin which the product and services are used in the course of customersday to day lives. Some situations arise when a product is designed andmanufactured but contexts get developed when the consumers start usingthe product totally unrelated to what the manufacturer may haveconceived.

Understanding the contexts at the point of selling/servicing help:

Fit customer needs more precisely.

Make modifications in design to increase usage convenience.

Identify opportunity to cross-sell and up-sell.

TO SUCCEED IN THE RELATIONSHIP ECONOMY COMPANIES MUST

Create capabilities to service the

new customer

Connect the Business to the

Customer

Driven by voice of thecustomer.

Align mindset andconnectivity.

Listening and learningprocess.

Invest in enoughknowledge to get the jobdone.

Customer experiencemapping.

Balance elements of modelbusiness (strategy, people,process, knowledge andtechnology).

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Appropriation level ofsegmentation.

Develop efficient andeffective fulfillmentsolutions (self service vsfull service).

1.4 Techniques and Application to manage Relationships

Different stages in a customer life cycle calls for different techniques in Relationship

Management.

Acquisition Stage:

From the time a company decides to target a prospective customer to the time a customer

makes the final purchase.They need to focused on ensuring that the product features,qualityand costs are:

Well understood by consumers.

Provide consumers avenues to raise any issues.

Have product-service return guarantee.

Post-Acquisition Stage:

A)Single Product/service User:

Education:For exploiting value from the product/services,consumers expect an

organization to facilitate the process of education trough user manuals,websites,query

desks,contact centres,product demos onsite support etc.

Complaint/request and Query management support:Quick addressal through a

contact centre.Request fulfillment and facilitation within reasonable time frame and

complaint addressal.

Relationship recognition:As a recognition for his keeping a relationship with the

company a consumer desires some reciprocation from the company.

B) Multiple product/service relationship:

Recognition of total share of walletinstead of discrete spends made by consumers.

Catering to individualized/personalized needs.

Parenting of different discrete accounts.

IT enabled means to establish key fields that throw up linkages.

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C) More favourable terms for additional business :A consumer expects to be offered the best

terms for additional business in return for his loyalty.

All these indicate that for building acquisition/post acquisition relationship an organization

needs to build capabilities to capture the following:

Transaction history.

Socio economic characteristics.

Behavioral traits.

Identification of customer uniqueness.

Long term potential for additional services.

Acquisition Cost Versus Relationship Costs.

Relationship management entails expenditure on maintaining the various relationship

programs.While acquisition costing/profitability are well understood,it is found that

companies struggle to appropriate a correct costing structure to support relationship

management aspects.This costs can be spread over the following.

Post purchase transaction handling.

Loyalty programs-retaining customers,increasing loyalty.

Partnering programs- Co-partnering,Affinity Partnering.

Personalised services-One to one marketing.-Meeting and satisfying each customers

needs in a unique and individual manner.This is aimed typically at high yielding

customers,service recovery and training programs.

1.5 Experimental Relationship Framework

Customer experience is the buzz phrase that almost everyone is gearing these days. Whetherit is a five star hotel or a product it is realized that beyond product/service it is the

experiential component that builds long term loyalty of the customers.

Customer experiment management is the final frontier of marketing and branding. Mastering

creation of an experience is the key to sustainable market success of any product/service.

Experience Realms

Absorption

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Immersion

1. Entertainment: while being entertained, people absorb the experiences through their

senses such as while viewing a performance.

2. Educational: here the person absorbs the events unfolding before him, while also

creatively participating.

3. Escapist: during an escapist experience the person actively participates in an

immersive environment.

4. Esthetic: individuals immerse themselves but remain passive, when they view things.

There are five operating principles from the behavior findings which helps in managing

customer relationship:

Principle 1- Fishing Strong

The beginning and the end of an encounter is not equally weighted by the customers. The endis far more important because that is what remains is the customers reflections. While it is

important to achieve a base level satisfactory performance at the beginning it is extremely

important to end on a strong note.

Peoples innate preference for improvement is another factor in the principle. This desire not

only applies to a lengthy encounter but also to short technology- mediates encounters such as

on websites.

Principle 2- Get the bad experience out of the way early

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In a sequence of events involving good and bad outcomes, people prefer to have undesirable

events come first- so they avoid dread and to have desirable events come at the end of the

sequence- so they can savour them.

Customers want to know the bad events well in before. For example, the wait time in a queue

while rendering a service in park for getting into a joyride.

Principle 3- Segment the Pleasure- combine the pain

Experiences seem longer when they are broken into segments. In addition, people have

varied reaction to losses and gains. So it is important to break pleasant experiences into

multiple stages and combine unpleasant ones into a single stage. Not many businesses have

grasped this notion because of which they fail to understand their customers well.

Principle 4- Build Commitment through choice

People are happier and more comfortable when they believe they have some control over a

process, particularly an uncomfortable one. Often, the control handed over, is largely

symbolic. This principle can both save money and make client happy.

Principle 5- Give people and stick to them

Most service encounter designers dont realize how ritualistic people are. They find comfort,

order and meaning in repetitive, familiar activities. This is particularly important in longer

term professional service encounters- it is used to mark key moments in the relationship,establish professional credentials and create a feeling of inclusion. Flatter customers, set

expectations and get feedback.

CUSTOMERS CAN BE DIVIDED INTO 3 ZONES-

1. Zone of defection: Where customers are extremely hostile and the lowest level of

satisfaction.

2. Zone of indifference: Where customers are not sure. They have a medium level of

satisfaction and loyalty towards the company.

3. The third level of customers is in the zone of affection described as Apostles. CRM

focuses on bringing customers from zone1 to zone3 and retaining apostle customers.

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CRM recognizes that marketing starts after sale is over and not during when sale is

completed. This results in improved customer retention and has a sizeable effect on

companys bottom line. This approach leads to:

Greater Customer loyalty.

Enhanced Retention

Identification of most causes of defection and related key service issues; and

Development of corrective actions to improved retention.

BENEFITS OF IMPLEMENTING CUSTOMER RELATIONSHIP MARKETING:

The efficacy and benefits can be expounded and enhanced by looking from the standpoint of

the inputs and outputs encompasses by the Customer Relationship Marketing.

A) CRM encompasses inputs like: -

1. Understanding customers and their requirements;

2. Their (i.e. customers) expectations and benefits sought;

3. Individual care;

4. Attitude and attention;

5. One to One partnership;

6. Information sharing;

7. Value added products and services, etc with quality being the main concern.

B) The Output/Payoff of CRM like: -

1. Customers delight;

2. Enhanced customer retention;

3. Enhanced customer loyalty and trust;

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4. Zero customer defection;

5. Increased customer profitability;

6. Decreased customer efforts and costs;

7. Customized offerings;

8. Superior value through better services;

9. Reduction in order procurement uncertainties;

10. Increased customer share;

11. Positive referrals;

12. Life time customer recognition;

13. Total customer commitment;

14. Extensive customer contact, respect, reward etc.

GOALS OF CUSTOMER RELATIONSHIP MARKETING:

CRM is an ongoing process, which aims at retaining customers by creating a long lustful,

fruitful relationship/alliance with them and gaining prospective customers utilizing the

current customers as positive referrals.

Thus, in context to the above the basic goals of CRM and also its achievement in due course

of time, becomes an imperative task for the organization.

Therefore, the basic goals of CRM are to:-

1. Identify the right customer to focus;

2. Getting closer/intimate to customers;

3. Understanding their techno-economic requirements;

4. Delivering the right message to the right customers at right time;

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5. Optimizing delivered value by offering a better value proposition;

6. Offering quality services that are expected;

7. Making the customers feel that they are unique and are truly special;

8. Managing their techno-financial concerns with empathy etc, thereby making them

loyal and intimate to the organization.

CRM calls for putting the customers at the center and reorganizing and aligning all facets of

organization to deliver sustained customer delight every time. In reality, CRM tends to

realign policies, values and culture, processes and practices, technology and people of the

organization.

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SHOPPER'S STOP

2.1 An Overview

Shoppers Stop is an Indian department stores promoted by the K Raheja Corp Group

(Chandru L Raheja Group), started in the year 1991 with its first store in Andheri, Mumbai

Shoppers Stop Ltd has been awarded "the Hall of Fame" and won "the Emerging Market

Retailer of the Year Award", by World Retail Congress at Barcelona, on April 10, 2008. [3]

Shoppers Stop is listed on the BSE. With the launch of the Navi Mumbai departmental store,

Shoppers Stop has 34 stores in 15 cities in India.

Shoppers Stop is one of the leading retail stores in India. Shoppers Stop began by operating achain of department stores under the name Shoppers Stop in India. Shoppers Stop has 35

stores across the country and three stores under the name Home Stop.

Shoppers Stop retails a range of branded apparel and private label under the following

categories of apparel, footwear, fashion jewellery, leather products, accessories and home

products. These are complemented by cafe, food, entertainment, personal care and various

beauty related services.

Shoppers Stop launched its e-store with delivery across major cities in India in 2008. The

website retails all the products available at Shoppers Stop stores, including apparel,

cosmetics and accessories. Shoppers Stop opened stores in Amritsar, Bhopal and

Aurangabad.

Products

Shoppers Stop retails products of domestic and international brands such as Louis Philippe,

Pepe, Arrow, BIBA, Gini & Jony, Carbon, Corelle, Magppie, Nike, Reebok, LEGO, and

Mattel. Shoppers Stop retails merchandise under its own labels, such as STOP, Kashish,

LIFE and Vettorio Fratini, Elliza Donatein, Acropolis etc. The company also licensees for

Austin Reed (London), an international brand, whos men's and women's outerwear are

retailed in India exclusively through the chain. In October 2009, Shoppers Stop has bought

the license for merchandising Zoozoo the brand mascot for Vodafone India.

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In April 2008, Shoppers Stop changed its logo and adopted the mantra "Start Something New

mantra.And introduced international brands like CK Jeans, Tommy Hilfiger, FCUK,

Mustang, Dior across the stores. The focus of the reposition was on the service, ambience

upgradation and customer connect. Shoppers Stop connects with the youth audience through

adopting the communication routes relevant to youth, up the fashion quotient through

merchandising, and create ambience that connects with the mindset. The brand campaign

addresses environment-related issues in a youthful, tongue-in-cheek manner. Shoppers Stop

as a brand active on social media marketing platforms with Facebook and Twitter to connect

with this audience.

Merchandising opportunities like the launched Zoozoo merchandise and film merchandise.

Shoppers Stops has a loyalty program called First Citizen. They also offer a co-branded

credit card with Citibank for their members.

Shops

Shoppers Stop's sister stores are

Crossword Bookstores

Crossword Bookstores is the largest chain of bookstores in India with 52 branches. Shoppers

Stop acquired 100 per cent stake in bookstore chain Crossword. Crossword is positioned as a

lifestyle bookstore with their spacious, well laid out stores which encourages customers ease

in browsing through the merchandise of books, music, stationary and toys.

HomeStop

HomeStop is premium home furnishings home concept store, which offers products in home

decor, furniture and accessories, bath accessories, bedroom furnishings, mattresses,

draperies, carpets, modular kitchens and health equipment.

Brio

Brio has 20 outlets in select cities. Caf Coffee Day (CCD), the retail division of

Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers Stop to run

its BRIO outlets.

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Desi Cafe

Desi Caf and their operations have been taken over by Caf Coffee Day (CCD), the retail

division of Amalgamated Bean Coffee Trading (ABCTL), has signed an MoU with Shoppers

Stop to run its Desi Caf outlets.

HyperCity

HyperCity provides customers a wide variety of range of products for shopping in a large and

modern retail environment. It offers a contemporary range of products, sourced from both

local and international markets. The product range covers: Foods and Grocery, Homeware,

Home Entertainment, Hi-Tech, Appliances, Furniture, Sports, Toys & Fashion.

M.A.C.

M.A.C. and Shoppers Stop Ltd. entered into a non exclusive retail agreement with cosmetics

major Estee Lauder to open up M.A.C. Cosmetics stores in India. M.A.C. Makeup-Art

Cosmetics - the professional brand of choice, is the first brand under the Estee lauder Group

of Companies portfolio to enter the Indian retail market. Currently there are 9 M.A.C. stores

operating.

Arcelia

Arcelia is a new retail concept aiming at the growing accessories and cosmetics segment,

with a strong emphasis on experience and indulgence and primarily caters to discerning

women shoppers. It retails cosmetics, fragrances, fine jewelry, footwear, handbags.

MotherCare

MotherCare and Shoppers Stop come together to introduce products for infant and toddler

care which stocks a variety of products for mother and babies, toddlers and children till eight

years of age with the focus being on style, function and safety. The UK-based maternity and

kidswear brand has nine standalone and 13 shop-in-shop formats.

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Nuance Group

Nuance Group with Shoppers Stop makes an entry into airport retailing. The alliance is

marked with a joint venture with The Nuance Group AG of Switzerland, the worlds leading

airport retailer. Shopper's Stop Ltd. is handling the retail operations at the duty free zones in

international terminals. The joint venture company, called Nuance Group (India) Private

Limited. is operating outlets at the International airports at Bengaluru and Hyderabad.

HyperCity-Argos

HyperCity-Argos and Shoppers Stop, the two retail ventures of K Raheja group had signed a

memorandum of understanding with UKs leading retail chain Home Retail group to develop

the Argos (retailer) retail format stores in India. [13] Two years later, Shoppers Stop Ltd has

informed Bombay Stock Exchange shall wind down and discontinue its catalogue retail

operations under the Hypercity-Argos brand.

Time zone

Shoppers Stop forayed into the Entertainment sector by acquiring 45% stake in Timezone

Entertainment Private Limited which is in the business of setting up and operating FamilyEntertainment Centres (FECs). It has 5 outlets in Ahmedabad, Hyderabad, Kolkata, Navi

Mumbai and Mumbai.

2.2 CUSTOMER RELATIONSHIP MANAGEMNT AT SHOPPERS

STOP

Tracking of consumers has helped shape many moves of Shoppers Stop from

merchandising and increasing the ticket size of purchases to opening of new stores The

slowdown that came fast and furious in 2008 drove home the virtues of thrift to the countrys

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retailers. Most renegotiated rents, squeezed the last paisa out of the vendor, shut down stores

that were no longer viable and pruned the workforce. There was also a rush for private labels

though cheaper than brands, they offer better profit margins to the retailers. There was

also some rethink on the merchandise: Why not write more affordable prices?

The exuberance was gone and there was a general tendency to slow the pace and move down the

value chain. In contrast, Shoppers Stop, the Raheja-owned chain of departmental stores, decided it

would be brand-led and rebranded itself as a premium-to-luxury retailer.

When others retracted their expansion plans, Shoppers Stop opened shop beyond the top-tier cities.

What made it take the contrarian strategy was its base of repeat customers and the loyalty cards they

held. Tracking this band of consumers has shaped the retailers many moves merchandising,

increasing the ticket size of purchases, new store openings et al. For the record, Shoppers Stop came

out of the red in 2009-10. From a loss of Rs 63.65 crore in 2008-09 on net sale of Rs 1,438.3 crore, it

turned to a profit of Rs 35.88 crore on net sale of Rs 1,611.83 crore.

Shoppers Stop Vice-president (marketing and loyalty) Vinay Bhatia says there are 1.8

million loyalty cardholders who account for 73 per cent of the total sale. The First Citizen

card, like any other loyalty programme, logs all the purchases made by the customer; points

are assigned to the money spent, which can be redeemed by the customer. We get

information of every purchase of every such customer right from the first day, says Bhatia.

Ernst & Young Partner (retail and consumer products) Pinakiranjan Mishra says, More than

the number of loyal members, what matters is how the retailer manages the data.

To rein in the juggernaut of such information (16.5 million product units of every year),

Shoppers Stop has put in place a four-member analytics team to monetise the insights they

read from the transactions. We dont see the information logged as an aggregation of cash

memos but as vital clues to the purchase behaviour from our stores, says Bhatia. What we

dont know is the purchase from other stores which we ascertain through our wardrobe

studies for new stores, says Bhatia.

The company has also invested in technology to log such transactions on its other platforms

as well: Homestop (furnishing and kitchenware), Crossword (books and music) and

Hypercity (hypermarket); however, the Shoppers Stop scheme remains the largest. It is

more effective than sample-based market research which would never have given us insights

on actual purchases, notes Bhatia. The usual analysis around festivals and communities is

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one part of it, something that Future Group has mastered well. More comes into play during

opening new store or for targeted communication.

Shoppers Stop does not depend on sample-based market research alone when opening a new

store. It is aware that shoppers outside its catchment areas travel to its stores to shop. Its First

Citizen base, which puts data down against pin codes, tells it that people from Amritsar

would shop in Delhi, Aurangabad in Pune or Mumbai and even people in Vashi in Navi

Mumbai in its Chembur and Mulund stores areas it has recently opened outlets in.

Shoppers Stop Managing Director Govind Shrikhande says: We already have consumers in

our database from places near major cities where we intend to open stores. In Amritsar and

its nearby towns, for example, we had 2,000 existing members.

From premium to luxury

Thus, when it opened in Vashi in 2009, Shoppers Stop knew what to provision for. With

cardholders from Vashi already on its radar, it analysed their purchases to find a skew

towards accessories. People who would come down from Vashi to other stores in Mumbai

would opt for accessories such as bags and shoes rather than shop for apparels to change their

looks, says Bhatia. The beauty and accessory section, right at the entry, was therefore bigger

compared to the other stores. Similarly, women from Amritsar shopped more for ethnic wear

and men for casuals (the absence of a corporate environment and of more business), helping

the retailer stock accordingly; makeup was a big draw too with more time at their disposal for

even small outings. Shoppers Stop launched its full-fledged make-up brands including the

top-end MAC in the Amritsar store. A large population of non-resident Indians means the

shoppers know their way around premium and luxury brands, says Bhatia.

When a new store opens, analysis of the data lets the retailer calculate the extent to which therevenue of its existing stores will get hit. With the Vashi store, we knew that there would be

a dip of 4 to 5 per cent in sale in the other stores. We dont have to wait for the new store to

open to gauge the cannibalisation for the last seven or eight launches that we have done. We

brace for it in advance, adds Bhatia. This is important. A large part of the retail business is

to keep the supply chain as lean as possible; proper demand projection helps bring in great

efficiencies into it. It helps in another way: Once it knew that customers would shift to the

new store, the retailer took some of its employees from the other two stores and posted them

in Vashi since the traffic would have gone down. We did not have to depend only on fresh

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recruits for the new store; likewise, while we cant shrink the area of the stores, we

rationalised the volumes of the different SKUs in these stores to account for the diverted

traffic, says Bhatia.

Shoppers Stop also does third-party surveys such as wardrobe studies before opening in a

new catchment area. Wardrobe studies help it ascertain the aspirations as well as the actual

mix in a towns wardrobes. Not just demographics, it also studies the financial profile of the

town from the kind of bank brands there to the number of credit cards. A city with a high

use of credit cards would mean an environment conducive to a departmental store, says

Bhatia. Number of vehicles, telecom penetration, the presence of educational institutions and

even denim-wear consumption also help it fine tune a towns profile. The type of vehicles

help it negotiate with the mall developers for more space accordingly; if, for instance, there is

greater dependence on two-wheelers then provisions for helmets and more space for two-

wheelers are marked out. We keep the look of the stores the same everywhere; but in

Bhopal, for example, we would not have too many full-length luxury cosmetic brands such as

Dior or Clinique. We would start with Lakme, Maybelline and LOreal but still have Tommy

Hilfiger to make that aspirational statement, says Shrikhande.

One-stop shop

Still, Shoppers Stop has not reverted to the pre-downturn eagerness to open stores. It is

concentrating only on anchor stores in contrast to the standalone format. Bhatia says: We

have shortlisted 26 cities from the 45 in India with a population of over 1 million. We are

already present in 15 of them and will enter 11 more in the next four years. In line with our

positioning, we will cater to the top end of India. In the next four years, we will target 26

more stores. There are 34 stores of Shoppers Stop. The First Citizen analytics has been fine-

tuning its entry into new catchments such as Amritsar, Aurangabad and Bhopal over the past

few months. Next up are Durgapur, Mysore and Vijayawada.

Early March last year, it had segmented its consumers under categories such as bridge to

luxury (BTL, straddling luxury and above-premium brands), premium, popular (mass brands)

and value (those who buy during a sale). Our BTL cardholders alone contribute to 91 per

cent of the full BTL sale, says Bhatia. BTL brands account for 15 per cent of Shoppers

Stops revenue, up from 2 per cent in 2008, before the retailer repositioned itself. How does

this help? Instead of spending on wide-ranging communication, often called the shotgun

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approach, Shoppers Stop has used the segmentation for sharper advertisements with mailers

and mobile-phone messages for its BTL loyalists when it launched Mustang, one of its

exclusive brand tie-ups, last year. Relevant and discreet communication will make the

consumer take our messages seriously, says Bhatia.

Once in the store, it has lined up for the cardholders personal shoppers and an upgraded store

experience. Shoppers Stop has trained its eyes on increasing the ticket sizes that customers

run up when encashing their loyalty points. Regular reminders of the expiry of points in

simplified rupee-value terms are sent. This festival season it let shoppers choose their own

gift for high bill amounts rather than saddle them with trinkets and accessories that might not

match their tastes. Loyalty cardholders dropping off its maps are coaxed back with

personalised offers if they havent paid for with the card for the last 12 to 18 months. We

charge shoppers a nominal fee of Rs 200 to enroll in our programme in the first place, hoping

that their involvement in such a paid-for system would be deeper and they would carry the

card every time they come in, Bhatia says.

The cross-referencing of purchase history of cardholders revealed an odd buying behaviour:

Men would come in and buy shirts but would not pair these with trousers. We broke them

into three types: Those who needed a benefit in such as an offer, for whom we said we will

discount the second trouser they buy; the second was the one who bought shirts and even

casual trousers but not formal trousers, and for them we introduced bundling shirts with

trousers; the last was the one who wanted new brands to purchase, to whom we did not

communicate discounts but appraised him of the new brands and fits that came in our stores,

says Bhatia. All of these measures are geared to send the average ticket size up north.

Purchases among the 100,000 members who got such communication shot up by 30 per cent,

compared to the control group whom Shoppers Stop did not send any to gauge the change.

Shoppers Stop also tied up with a jewellery brand in its stores and sent out mailers to 15,000

members who had shopped for jewellery but had not bought any in the last 18 months. Bhatia

claims there was an increase of 40 per cent in jewellery purchases among this group over the

ones who had not received such communication.

Gaining an edge through loyalty cards over competition took on a different tone in 2008

when Future Groups brand-led format, Central, invited cardholders of other department

stores such as Shoppers Stop and Lifestyle to avail of additional discounts at its Gurgaon

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outlet. The campaign of course ran into legal proceedings but not before underlying the

import of loyalty programmes for Indian retailers during and after the downturn. Shoppers

Stop had the added burden of trying to keep its positioning as a more premium brand alive.

Shopper sentiments have since picked up, as have exclusive international brands on Shoppers

Stops floor such as Mustang, Mothercare, Guerlin cosmetics and Austin Reed.

2.3 Customer loyally and Customer Referral programme

First of all when any customer do some purchase in Shoppers Stop and feel very delighted by

the store then automatically the sales increases. He visits the store again and again to

purchase any goods or article. These customers get the loyalty cards form Shoppers Stop

(First Citizen card) which provides them additional benefits and services. Delighted by such

benefits, the loyalty of the customer towards the store increases and they prefer to have

shopping in the store for long time to come. Moreover, they spread the same information

about Shoppers Stop and its benefits among their family members and friends. Resultantly,

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the sales of the store go up further. Thus, we find that a loyal customer help in the referral

programme a lot.

Referral programmes of Shoppers Stop-

1. The store sends direct mail and SMSs to their loyal customers about the new products

or new launches available at the store.

2. The store also give some prizes to those customers who referred some customers to

Shoppers Stop and when during the purchase mention the name of the referring

customer.

3. Shopper Stop Gift Voucher

Shoppers Stop Gift Voucher-

Shoppers Stop Gift Voucher is one of the prominent tools of Customer Referral programme

at Shopper Stop. The value of this voucher ranges from Rs.50/- to Rs.2000/-. These vouchers

are basically gift vouchers which can send by any individual customer to his friend or

relatives or an employer can gift to his employees.

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Sales increases

Loyalty

Customer

Increased sales Refer to friends and


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Suppose, there is a birthday of a friend of one of the customer. So in that case the customer

can send this gift voucher in an envelope written-Happy Birthday. The friend of this

customer who never knew about shoppers Stop or never did shopping at Shoppers Stop

would use the gift voucher inside the envelope ranging from Rs.50/- to Rs.2000/- and can fell

delighted by the experience of shopping at the store. In case this new customer is too much

delighted by the shopping experience, he can become a referrer and can add more new

customers.

Key benefits of Referral Program

Generate new customers from existing customers.

Simple, low cost and effective marketing strategy.

People feel more comfortable when a product or service is recommended by someone

they know.

A good referral marketing system can quickly multiply.

A customer who is referred to you is a much easier sale.

Referral program is an excuse for company to get in touch with their customers and

maintain regular contact.

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2.4 Conclusion

Relationship Marketing is a term has yet to acquire uncontested status and meaning. For

some, Relationship marketing is simply a traditional marketing dressed up in new clothes; for

others, it represents a significant change in the practice of marketing. For some, relationship

marketing refers to all internal and external organizational relationships; for others,

Relationship marketing is focused clearly on external customer relationships. The voice of

customer is partially absent from such Relationship Marketing. Indeed, it is not known whatcustomer wants, in significant numbers to enter into relationships with their suppliers.

Companies routinely communicate more frequently and make special offers to their more

valued customers. Whether this is seen by customers as adding value is a moot point.

At its best, Relationship Marketing is characterized by a genuine concern to meet or exceed

the expectations of customers and to provide excellent service in an environment of trust and

commitment to the relationship. To be a successful relationship marketer, companies must

develop certain tools and techniques (i.e. from macro and micro analytical point of view) in

such a way so that the objective of Relationship Marketing is judiciously achieved.

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