This document summarizes Nespresso's customer relationship management (CRM) and sales strategies. Nespresso uses analytical CRM to segment and select high-value customers. It focuses on relationship marketing through exclusive membership in the Nespresso Club, which sells coffee capsules and accessories. Nespresso aims to increase customer loyalty and consumption through cross-selling additional products and personalized customer service via direct mail, internet marketing, and magazine publications. The combination of innovative product design, portioned coffee capsules, and CRM strategies have made Nespresso a global leader in premium coffee sales.

1. NESPRESSO CRM & Sales Management Presentation: Leonor SILVA Xiaoran XIE Yingyu LIU Gang WANG Adedeji Osobukola

2. Contents of the Presentation Introduction: Company’s Background CRM & Sales: Relationship Marketing & Selling Practices; Analytical CRM; Operational CRM What the Future Holds: Poster References & Resources;

3. C ompany’s B ackground Nestlé Nespresso S.A. is the worldwide pioneer and market leader in premium portioned coffee ; Nespresso’s ‘ Ultimate Coffee Experience’ consists on a combination of the world’s highest-quality Grand Cru coffees, smart and stylish coffee machines and second-to-none customer service. ( Nespresso Academy Website ) Born in Switzerland in 1986, their products are now sold in more than 50 countries , directly to its customers . ( Nespresso Corporate Website ) They currently operate more than 79 prestigious boutiques in key cities around the world, such as London, Lisbon, Paris, etc. Nespresso Academy Website

4. R elationship M arketing: Diagram of Trade Relations Customer as the unique point of contact between Retailers & Club; The retailers as a POS for machines only & as recipients of sales techniques training; Company as a recipient and a sender of the customer needs; The Club as a link between customers & Company Original Diagram by Leonor Silva Nes p resso Nespresso Club Retailers Customers

5. Selling Practices Retailers – Sell Machines only; Nespresso Club – Sells/ Provides everything else: Exclusive membership for customers only; Coffee capsules (sale & distribution); Cups & saucers, sugar bowls, milk jugs, Aeroccino; Spoons, sugar, cookies, chocolates; Customer service, technical service, machine maintenance; Nespresso Magazine.

6. R elationship D ata M anagement Two types of analysis questions are found in Nespresso: Segmentation and selection questions: Divide the customer database into groups; Draw a list of the name-address-city information for person and organizations; Acquisition analysis and selection questions: Emphasize on customer retention. Pictures: Nestlé Nespresso website

7. S egmentation & S elections Nespresso targets high-income households as its main customer ( Markides , 1999); Segmentation of customers based on their value and loyalty for various products and customer type, with the objective to increase loyalty and/or consumption of the high potential customers .

8. C ross S elling & R elationship M arketing Marketing a lifestyle brand... Magazine: Attempts to portray Nespresso as a lifestyle choice for only the world’s most upmarket and discerning coffee drinkers. Nespresso Boutiques: Coffee Sample to try; sales assistents available everywhere to help you choose either coffee or accessories; Limited editions of coffee ‘special club’ Pictures: Nestlé Nespresso website

9. R etention and C ross S elling NESPRESSO system - capsule, machine and club Customers retention – cross selling - capsules, sugar, crockery, cases, machine accessories etc. Pictures: Nestlé Nespresso Website

10. T he E ffects of M arketing A ctivity Establish Nespresso as the Super-Premium Brand and Concept Become the Icon for perfect portioned coffee worldwide. Source: Nestlé Nespresso Investor Group Meeting 2006

11. I nternet and W ebsite

12. I nternet and W ebsite NESPRESSO’S WEBSITES: Loading time and versions; Contents and lay out: The Nespresso system; The premium blends; The machine; The Nespresso club; Nespresso at the Office; Nespresso at the Office: ‘ Free trial’ program.

13. D irect M ail and I nternet M arketing. ● Personalized customer services designed exclusively for the customer: ● Through the Website ● Sending magazine ● Sending Offers ● Sending Catalogues ● Making Regular Calls ● Providing after Sales Service Favorable Word of Mouth & Boost in Sales

14. W e C oncluded T hat… - this is an innovative product (design, espresso coffee, clean), that filled a void in a market that expressed a need for it. Not a solution looking for a problem; - a great complement strategy between machines and coffee dose refills; - innovative marketing, in particular in terms of CRM ; - a viral approach for a global product. The combination of these 4 factors can be applied to the tech sector, and be used maybe as a recipe or framework for success.

15. R eferences & R esources Business Source Complete (2004) ‘RTD Tea & Coffee in the United Kingdom’. (Euromonitor Report); Jobber, D & Lancaster, G (2006) Selling and Sales Management,7th Ed. Harlow : FT Prentice Hall Lewis, Herschell Gordon (2007) ‘A Capital Idea? Well….’,Direct, 19 (2), p64. Markides, Constantinos C. (1999) A Dynamic View of Strategy. Sloan Management Review, 40(3), p55-63. Mascarenhas, O. A; Kesavan, R & Bernacchi, M (2006) ‘ Lasting customer loyalty: a total customer experience approach’ . Journal of Consumer Marketing 23(7), pp. 397–405. Emerald Group Publishing Limited [ISSN 0736-3761] Nespresso UK (corporate website) available from http://www.nespresso.co.uk Nestlé Nespresso Investor Group Meeting Report (2006) Peelen, E (2005) Customer Relationship Management. Harlow : FT Prentice Hall Ryals, Lynette & Knox, Simon (2001) ‘Cross-functional issues in the implementation of relationship marketing through customer relationship management.’ European Management Journal, 19 (5), pp. 534-542 Verhoef, Peter C. (2003) ‘Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development’. Journal of Marketing, 67 (4), pp. 30-45 Winer, Russell S. (2001), ‘A Framework for Customer Relationship Management,’ California Management Review, 43, pp. 89-105. Xu, M. and Walton, J. (2005) “Gaining customer knowledge through analytical CRM”, Industrial Management & Data Systems, (105) 7, p.p. 955-971.

16. The End Thank you. Any Questions?

17. CREDITS Slides Design /Editing Leonor Silva Graphics Leonor Silva Theory Content Leonor Silva Gang Wang Xiaoran Xie Yingyu LIU Adedeji Osobukola Hand-Outs & Poster Leonor Silva