CUSTOMER RELATIONSHIP MANAGEMENT

Assignment -1
Give an introduction of customer relationship management in the
retail sector.

Answer - Customer relationship management (CRM) is the process of carefully

managing detailed information about individual customers and all customer “touch
points” to maximize loyalty. A customer touch point is any occasion on which a
customer encounters the brand and product—from actual experience to personal or
mass communications to casual observation. For any retail store, the touch points
include check-in and check-out time spent in the store, quality of service,
employee interaction, add-on facilities (parking etc), good ambiance, product
quality, and handling of returns.

1. Discuss the types of customers in the retail sector and the need
of CRM in the retail sector.
Answer –
1. Discount Customers: These types of customers contribute a good amount
of sales to a brand but not huge margins.
2. Brand Loyal Customers: These types of customers are loyal to a
particular brand that they like and most likely continue to buy from it. It’s
easier to sell any new product to the customers who are loyal to the
brand.
3. Impulse Buyer: These are unplanned buyers and may buy the product if
they get impressed by it.
 4. Window Shoppers: Window shoppers are mostly attracted into the store
due to visual merchandising in window displays. This group of shoppers
can be really helpful to build a brand image.
5. Need Based Customers: Need based customers are shoppers with a
requirement and plan in hand as the name suggests. They are articulate
and know what exactly they need.

Need of CRM in retail sector:

 It make customers happier

 It strengthens customer loyalty
 It improves company performance
 It creates successful marketing campaigns with a higher ROI
 It increases customer retention rate
 It encourages repeat sales and return customers

2. Select retail sector outlets of your choice and discuss the

technology used in the respective outlet.

Answer – Hamleys toy store took the decision to move away from their existing
customer support tool, BoldChat, to a more versatile solution that would be fit for
purpose as the level of customer service expectation increased and the customer
service operation scaled up. Therefore, a cloud based delivery model was decided
as a way forward to solve existing challenges and meet the company’s changing
needs. New solution was the implementation of Freshdesk which is a cloud based
customer support solution. One of the tasks that it does it automating manual
reporting tasks frees up time for the team to focus on other deliverables.
3. Telephonic interview of frontline employees as well as
managers and identify various customer relationship
management practices in the respective outlets.
Answer – At Hamleys, whenever customers go to the stores, salesperson let
them try different kinds of toys which they want to buy. They would even
demonstrate the product especially in front of children. After the sale,
customer would receive a thank you SMS and email.
Its customers like to reach out via the company’s social media accounts. The
way it uses its solution to track and respond to client inquiries left on all
their social media accounts is a great CRM example.
They even send out a special discount coupons to their customers on their
birthdays.

4. Interview customers from the retail sector and understand

various customer service strategies used by these outlets.
Answer – After interviewing various types of customers, it was found that
different types of customer service strategies are being used by different
outlets.
 Constantly keeping in touch with the customers through social media.
They get to know about new products and offers and even customers
can give feedback publicly and discuss issues if any in a forum.
 Responding to the feedbacks on social media and addressing the
problem and giving solutions their itself
  Using AI, chatbots are present on the retail outlets website. Customers
can get in touch directly with the executive and even find a solution to
some common problems.

5. Highlight the findings from the interviews and discuss how

customer relationship practices have evolved in the retail
sector and any new practices which can be put forward. (Use
graphs and tables wherever necessary to discuss statistical
interpretations.)

Answer – Earlier, retailers used to take customers for granted because there were
not any demands from them. Now customers want service, value for money and
quality purchase. So, keeping these factors in mind, retailers today evolved from
traditional marketing to modern marketing and building strong relationship with
their customers. Some of customer relationship practices that are implemented
today are – retaining customers (customer retention), this is done by providing
incentives and discounts, giving special customer service, personalization and
informal communication.

Some new practices that can be put forward are keeping in constant touch with the
customers through social media and frequently giving them recommendations and
updates about the new upcoming product and asking for previews.

6. Also comment on customer contact programs and customer

interaction management practices across all touch points of the
respective retail outlets and changes if any suggested.
Answer – For a retail outlets, the touch points include check-in and check-out time
spent in the store, quality of service, employee interaction, add-on facilities
(parking etc.,) good ambiance, product quality, and handling of returns. The
customers tend to come back to the store on personal touches, such as a staff that
always addresses customers by name, high-powered employees who understand
the needs of customers, and at least one best-in-region facility.

CRM enables stores to provide excellent real-time customer service through the
effective use of individual account information. Based on what they know about
each valued customer, stores can customize market offerings, services, programs,
messages, and media. CRM is important because a major driver of company
profitability is the aggregate value of the stores customer base.

7. Prepare an existing CRM model of the outlet and a

comparative model suggested by you.
Answer – Existing CRM Model -
Payne’s five-process model - It was developed by Adrian Payne. This
model clearly identifies five core processes in CRM: the strategy
development process, the value creation process, the multichannel
integration process, the performance assessment process and the information
management process. The first two represent strategic CRM; the
multichannel integration process represents operational CRM; the
information management process is analytical CRM.
Suggested by me -
The IDIC model - This was developed by Peppers and Rogers, the
consultancy firm, and has featured in a number of their books. The IDIC
 model suggests that companies should take four actions in order to build
closer one-to-one relationships with customers:
a. identify who your customers are and build a deep understanding of
them.
b. differentiate your customers to identify which customers have most
value now and which offer most for the future
c. interact with customers to ensure that you understand customer
expectations and their relationships with other suppliers or brands
d. customize the offer and communications to ensure that the
expectations of customers are met.
This model clearly fits for the respective outlets because it talks about
retaining the customers and having a long term relationship and it
analyses the data in depth which gives clear insights.

8. Conclusion
Answer – CRM today has become a synonym to success in business. The
retailers can effectively achieve it, if they identify the opportunities to
enhance customer value. Retailers can personally create programs and
develop products for each individual customer. In order to create a long term
relationship with the customers, customer satisfaction and loyalty will lead
to customer lifetime value and retention. Thus, both will have a profitable
and sustainable achievement at the end of the day.

B-Customer loyalty as defined by Oliver is a deeply held commitment to re-buy or

re-patronize a preferred product or service consistently in the future despite
situational influences and marketing efforts having the potential to cause switching
behavior.

1. Identify various categories of customer loyalty.

Answer – a. Convenience loyals.
b. Social loyalty
c. Engagement loyalty
d. Behavioral loyalty
e. Satisfied customers

2. Discuss various determinants of customer loyalty.

Answer – The main determinants of customer loyalty that are identified and
studied in past researchers are: satisfaction, trust, commitment, involvement,
perceived risk, switching costs and habit. All these factors are positive
correlated with loyalty.

3. Design a questionnaire for customer loyalty assessment for any

industry of your choice.
Answer – E-commerce industry
- How likely are you to recommend our services?
a. Very likely
b. Likely
c. Neutral
d. Somewhat likely
e. Not likely

- How often do you buy the products from our website?

 a. Once a week
b. 2 or 3 times per month
c. Once per month
d. Once every 2-3 months
- How much do you like or dislike our services as compared to other
e-commerce websites?
a. Very much dislike it
b. Somewhat dislike it
c. Neutral
d. Somewhat like it
e. Very much like it
- How well do our customer support team answer your question?
a. Very well
b. Quite well
c. Neutral
d. Worse
e. Worst
- Would you like a customer reward system?
a. Yes
b. No

4. Collect data and classify the customers on the loyalty status.

Answer –
 Recommendation

5% Very likely
12% Likely
Neutral
10% 45% Somewhat likely
Not likely

28%

How often do you buy the products?

40

35

30

25

20

15

10

0
Once a week 2 or 3 times per   Once per month Once every 2-3
month months

From the above data, we can say that for a respective industry, customers are
loyal towards that brand.

5. Recommend incentive schemes for customers

Answer –