Customer Relationship Management [Year]

Customer Relationship
Management
TESCO

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 Customer Relationship Management

Table of Contents:
Table of Contents:............................................................................................................................1

Introduction:....................................................................................................................................2

Customer Relationship Management:..............................................................................................2

Customer Realtion Management Strategy:......................................................................................2

CRM Strategy of TESCO & its Impacts:........................................................................................2

Loyalty Cards:..............................................................................................................................3

Online Shopping Facility:............................................................................................................3

Trading Stamps:...........................................................................................................................4

Healthy Eating Campaign by TESCO:........................................................................................4

Stores Format:..............................................................................................................................4

1. Express..............................................................................................................................4

2. Metro.................................................................................................................................4

3. Compact............................................................................................................................4

4. Superstores........................................................................................................................4

Other Campaigns by TESCO:......................................................................................................4

Checkout at TESCO.................................................................................................................5

Safeway Inc..............................................................................................................................5

First Class – Service.................................................................................................................5

One-on-Front Scheme..............................................................................................................5

Effects of CRM:...............................................................................................................................5

Drawbacks of CRM:........................................................................................................................6

Recommendations:..........................................................................................................................6

Conclusion:......................................................................................................................................7

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References:......................................................................................................................................8

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Introduction:
In this report, we will discuss the important of Customer Relation Management with reference to
leading supermarket in UK named TESCO. We will further discuss the effectiveness of customer
relation management along with role & function of customer relation manager. In the end, we
will evaluate the customer relation management strategy of TESCO and will provide
recommendations on the basis of research and case studies.

Customer Relationship Management:

The core objective of any organization or company is to satisfy its customers or target audience.
The company adopts and follows many strategies to achieve its main objective – customer
relationship management is one of them. It can be defined as a system for managing company’s
interaction with its customers and future customers. In the modern world, customer relationship
management is related to such technological system through which data is organized and
synchronized for sales, marketing and customer relations department [ CITATION Bus143 \l
1033 ].

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Customer relationship management follows the technology trends and skills and keeps the data
of every customer up-to-the-second. It helps to analyze the customer, its sales trends and
followings. These findings can help to build a relation with customers and can be used for
increase in sales. Even every click of the customer is tracked and analyses in online sales.
Customer relation management includes call centers, social media, direct mail, data storage files,
banks, and customer data queries [ CITATION Sal00 \l 1033 ].

Customer Relation Management Strategy:

Customer Relationship Management Strategy is aligned with objective, mission and vision,
mission and business strategies. The objective of CRM strategies can be articulated if CRM
strategies is designed as per business strategy. There are many CRM softwares available in the
market but the software alone will not achieve the targets; combination of CRM strategies is
designed to attain the desired objective [ CITATION Chu14 \l 1033 ].

CRM Strategy of TESCO & its Impacts:

TESCO is a multinational grocery and general merchandise super market. It is the first super
market to sign the Ministry of Defense’s Armed Forces Corporate Convent. It was founded in
1919 by Jack Cohen. In 1924, the brand TESCO started its journey and in 1932 it appeared as a
private limited company. It was started from a small stall and now it is the super market operated
in 12 countries. It has employee structure of almost 530,000 across the world serving millions of
customers every week [ CITATION TES14 \l 1033 ].

It is the essential requirement of TESCO to gather, organize, and analyze the date of its
customers to plan customer relation management strategies accordingly. TESCO has introduced
many CRM strategies to strengthen the relations between TESCO and its expanding customers.
If we talk about TESCO – UK, it has introduced customer service efforts, loyalty cards scheme,
marketing strategies, and game play to develop a relation with customers. Moreover, millions of
people in UK receives TESCO magazine. Many companies use this tool to introduce the services
and offers by the company. It contains promotional schemes and discounts coupons as well to
attract customers. The uniqueness of TESCO magazine is its content and discount coupons.

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TESCO ensured that it’s all the customers receive the magazine and this has been possible by the
customer services management department.

Loyalty Cards:
TESCO has continued to win market share in UK and expand the scope of its business – both in
the range of products and services it offers. Similarly, TESCO is considered champion of
customer relationship management. The reason is its curiosity to introduce new techniques and
skills to create a lasting relationship with its customers. In 1995, TESCO UK introduced loyalty
cards which set a foundation of TESCO’s fast growing CRM strategies. The data of its all the
customers was collected and their loyalty cards were issued through which formulating strategy
of loyal cards was designed. Through loyal cards customers were offered personalized services at
cost-effective manner [ CITATION Cli14 \l 1033 ].

The concept of loyalty cards proves that effective customer relations management strategies
help to establish long lasting relationship with retailers and customers. It helped to secure a
massive achievement and positioned the TESCO as number one grocery business in UK. It is the
effective marketing technique to attract to customers, to become members of the brand, and
continue long lasting relationship with company. It is such sort of relationship which can be kept
at arm’s length from rest of the marketing and the company does [ CITATION Mai14 \l 1033 ].

Although it came with a boost in the business structure of TESCO but with the passage of time,
its outcome ratio appeared to be falling. One of the reasons of this decline was over-
concentration on the means and lack of focus on the end: in other words, too much attention was
given on IT – how to collect data, how to analyze and how the data will be helpful for managing
and introducing CRM strategies and the execution level was not the same as it was focused in the
beginning. In the statistics of 2002, the market shrank by 5 percent and it continued to shrink.
One of the key factors that researchers found about the decline was unrealistic approach of
expectation on the behalf of customers.

Online Shopping Facility:

After the registration of the customers at TESCO, they can enter the number of their card and can
avail the facility of online shopping. Online customers avail all the benefits of offline customers-
they avail promotional campaigns and all other benefits. Most of the important documents are

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created and stored automatically in TESCO. TESCO was the first retailer in the world to offer a
robust online shopping service. According to the annual report of TESCO 2005, it claims to
provide services to 98% population of UK through its 300 chair stores and more than 120
thousand order every week.

Trading Stamps:
Retail Price Maintenance system restricted the retailers from pricing of goods below the price
agreed upon MRP. TESCO was not able to compete on price with small retailing outfits. Then
TESCO again proved itself as champion of CRM and came with the idea of trading stamps.
These stamps were given to the customers in return for making purchase in their stores.
Customers were given chance to redeem these stamps against cash or gift. This scheme of
trading stamps proved very successful and lead to get the RMP abolished [ CITATION Azi13 \l
1033 ].

Healthy Eating Campaign by TESCO:

This campaign was launched by TESCO in 1985. The aim of this campaign was to educate the
customers about healthy eating and nutritious benefits of products. This was a unique idea to
communicate with clients and at the same time introduce some of health-related brands. It was a
healthy campaign to provide people with information of healthy eating at the place where they
eat and where they shop [ CITATION Bus95 \l 1033 ].

Stores Format:
TESCO came up with an idea of stores format according to the shopping pattern of the
customers. They flexibility of this idea helps to give comfort to the customers. As TESCO
offered a vast variety of products and services, that is why, they want to get the idea of convent
time saving trip. So they planned and executed different stores format in 1994 and these formats
were:

1. Express
Petrol station forecourt shops selling a range of everyday products.

2. Metro
City-centre stores serving the need of busy working population.

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3. Compact
Superstore range but with a compact environment.

4. Superstores
Large stores offering a full food range and many non-food products.

[ CITATION TES14 \l 1033 ]

Other Campaigns by TESCO:

In customer services management, every customer is valued and given priority. A company
where millions of customers visit every week gives priority to its each customer as well but in
this scenario, the customers are categorized according to value and customized products. It helps
CRM team to plan strategies accordingly. It the CRM software that helps to categories the
customers and design strategies accordingly. TESCO, following the same rule, introduced many
techniques and strategies to give benefit to its customers from time-to-time. Some of the
campaigns are listed below;

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Checkout at TESCO
1979, TESCO introduced ‘check out at TESCO’ – a price cutting campaign.

Safeway Inc
In 2000, company tied up with Safeway Inc to launch an online grocery shopping service.

First Class – Service

This service was launched by TESCO during 1993-94.

One-on-Front Scheme
In 1994, TESCO introduced one-on-front scheme to save the time of customers at checkout
counters.

Effects of CRM:
TESCO is one of the leading super stores in UK for all types of household items. The business of
any retail store is dependent upon the walk in customers because they are the actual purchaser or
customers. The retail business directly deal with the customers so they are required to design
such CRM strategies that can help to deals directly with the customers. We have discussed in
detail about the strategies introduced and launched by TESCO with their effects and drawbacks.
Now we discuss about the benefits or advantage they have through effective customer relation
management and these can be listed as below [ CITATION Sim03 \l 1033 ]:

 All data relevant to sales, customer services, marketing and products is available at one
place thus helps to design effective strategies
 CRM allows multiple business departments to integrate and collaborate on activities
 Wide array of softwares is available, from general purpose softwares to more specialized
softwares as per requirement
 Ability to analyze data to find trends and other useful information to aid decision making
 CRM makes easy to understand customer behavior and preferences
 It helps to understand the psychology of the customers which is influenced by their
environment and many other factors
 Helps to study the sales trends of any product or brand
 Explains success or failure of any product in the market

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 Helps to build long lasting relationship with customers

 A number of marketing activities are dependent upon CRM i.e. customer targeting,
pricing, marketing competition management so effective CRM helps to manage these
marketing activities successfully
 Analytical functions of a company i.e. customer value analysis, customer presentation
rate analysis and sales forecasting can be made easy and accurate by CRM
 Productivity of any company can be increased by effective CRM
 CRM influence management of a company
 Centralization of the information of customer is possible through CRM
 CRM improves communication between sales and finance
 Order tracking is possible by CRM which is a very important tool to strengthen customer
relations
 Sales forecast is possible by CRM which helps to take decision in critical situations
[ CITATION Gal12 \l 1033 ]
[ CITATION Bob04 \l 1033 ]
[ CITATION Rog07 \l 1033 ]

Drawbacks of CRM:
Despite of all the above mentioned benefits which an effective CRM provides to an origination,
there are certain limitations or drawbacks as well which are mentioned as below:

 Different softwares are available as per requirements but these softwares can be very
expensive to achieve desired objectives
 After you have purchased a software, you need to hire a trained staff or need to train your
existing staff which could be time taking and expensive as well
 Many organization cannot be integrated with CRM softwares easily
 New software can be difficult to start and sometimes it interrupts business
 In some cases, external companies are here to access and handle data, for certain
guarantee for the security and privacy or data but it can be risky

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Recommendations:
The main objective of customer relation management is to develop a healthy, trusty worthy and
log lasting relationship between customers and the organization. The organization has two
extremes one is its employees and other is customers. Such system should be designed which
could made both of them satisfied. Some recommendations, in this regard, are listed below:

 CRM needs to identify the key customers of the organization and plan strategies
according to their priority; one strategy cannot be applied for all the customers
 There should be such measures to educate the staff, motivate them and reward them to
keep them satisfied as well
 Every customer should be required to fill a form of their general information which could
be helpful to deal with their banking data
 There should be some source of external data as well to attract the new customers
 A project of CRM is usually launched with boost but there should be a team which make
sure to continue the boost till the end of the campaign
 There should be such software which could define customer’s experience – how they feel
about the organization, what they consider important and what measure should the
company take to improve the services etc.
 It is important for the organisation to target customers individually enabling the customer
feel that they are important to the organization
[ CITATION Bob04 \l 1033 ]

Conclusion:
We have discussed in detail customer relation management, its components and what strategies
TESCO used in different time frames along with their outcome and response. We see how
effectively they launch the scheme of loyalty cards and which effects they measured in their
sales and customers ration. Then we discussed how an effective customer relation management
strategy can help an organization to grow and boost its sales with increased rate of customers’
satisfaction. As it is very important for the companies to design CRM strategies to get maximum
satisfaction by their customers. At the same time we discussed the limitation of the customer
relation management strategies as the softwares that are used by CRM are expensive, difficult to

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handle and could be risky if another party is involved to manage the data. In the end, some
recommendations are given to improve the CRM strategies for getting maximum benefits and
outcome.

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References:
Azizul Hassan; Masud Perves (2013) A Comparative Case Study Investigating the adoptation of
CRM the case of TESCO and Sainsbury, vol. 4, no. 1, March, pp. 1-10.

Business Case Studies (1995) The Healthy Eating Brand, [Online], Available:
http://businesscasestudies.co.uk/tesco/the-healthy-eating-
brand/introduction.html#axzz3IhD3oO6p [10 Nov 2014].

Business Dictionary (2014) Custom Relation Management, [Online], Available:

http://www.businessdictionary.com/definition/customer-relationship-management-CRM.html
[10 Nov 2014].

Cabe, M.M. (2014) TESCO mulls new strategy on loyalty, 13 M arch, [Online], Available:
http://www.campaignlive.co.uk/news/1284708/ [11 Nov 2014].

Clive Humby; Terry Hunt; Tiim Phillips (2014), in Scoring Points, Kogan Page Publishers.

Gallangher, C. (2012) Impact of CRM on Today Business, June, [Online], Available:

http://www.academia.edu/1949886/Impact_of_CRM_on_todays_businesses [11 Nov 2014].

Sales Force (2000) Introduction to CRM, [Online], Available:

http://www.salesforce.com/uk/crm/what-is-crm.jsp [10 Nov 2014].

Schaeffer, C. (2014) CRM, [Online], Available: http://www.crmsearch.com/laurence-

buchanan.php [10 Nov 2014].

Simon Knox; Adrian Payne; Stan Maklan (2003), in Customer Relationship Management,
Butterworth Heinemann.

TESCO (2014), [Online], Available: http://www.tescoplc.com/index.asp?pageid=276 [10 Nov

2014].

Thompson, B. (2004) Succssful CRM, Oct, [Online], Available:

file:///C:/Users/S/Downloads/B460.pdf [10 Nov 2014].

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Trapp, R. (2007) How CRM can be of benefit to your business, 5 June, [Online], Available:
http://www.independent.co.uk/news/business/sme/how-customer-relationship-management-
systems-can-be-of-benefit-to-your-business-451821.html [10 Nov 2014].

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