Presentation on CRM and RETAILING On the subject Retail

Marketing
Submitted by:
Nirmal Yadav Roll No.54

INSTITUTE OF MANAGEMENT STUDIES KURUKSHETRA UNIVERSITY

Customer Relationship Management

CRM is a combination of policies, processes, and strategies implemented by a company that unify its customer interaction and provides a mechanism for tracking customer information. A business philosophy and set of strategies, programs, and systems that 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 its contact with its customers CRM is a software-based approach to handling customer relationships Store information on current and prospective customers.

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.

CRM as Business Strategy Three key phases

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 us for the FIRST TIME.

2. Customer retention
Re-purchase
Our customer returns and buys for a second time This is most likely to be the purchase of a similar product 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 us REGULARLY

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

CRM as Business Strategy

Contextual factors

4.Marketing Orientation
Focused upon the three levels of needs of customers
Actual, tangible product Core product and its benefit

Also the augmented product such as a warranty and customer service.

5. Value creation Generation of shareholder value

Based upon the satisfaction of customer needs (as with marketing orientation) Delivery of a sustainable competitive advantage.

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 is vital to its success CRM software collects data on consumers and their transactions Organizations will track individuals, and try to market products and services to them based upon similar buyer behavior seen in other individuals

The CRM Process

CRM is an iterative process that turns customer data into customer loyalty through four activities: 1. Collecting customer data

2. Analyzing the customer data and identifying target customers

3. Developing CRM programs

4. Implementing CRM programs

Collecting Customer Data:

Customer Database
Transactions a complete history of purchases
Purchase date, price paid, whether or not the purchase was stimulated by a 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

Collecting Customer Data: Identifying Information

Approaches that store-based retailers use: Asking for identifying information
Telephone number, name and address Loyalty programs that identify and provide rewards to customers who patronize a retailer Private label credit card (that has the stores name on it)

Offering frequent shopper cards

Connecting Internet purchasing data with the stores

Privacy Concerns
Control over Collection
Do customers know what information is being collected? Do customers feel they can decide upon the amount and type of information collected by retailers?

Control over Use

Do customers know how the information will be used by the retailer? Will the retailer share the information with third parties?
Steve Cole/Getty Images

Analyzing Customer Data and Identifying Target Customers

Analyze the customer database and convert the data into information that will help retailers develop programs for building customer loyalty
Ryan McVay/Getty Images

CRM Possesses and System

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.

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

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.

 Acquire

4. Acquire and Retain

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

Retain
Maintain interaction;

Deliver on value
Customers change as they move through differing life stages

Modify the service

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 what they 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

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.

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

 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.