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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
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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
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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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