Your SlideShare is downloading. ×
Upcoming SlideShare
Loading in...5

Thanks for flagging this SlideShare!

Oops! An error has occurred.

Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total Views
On Slideshare
From Embeds
Number of Embeds
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

No notes for slide


  • 1. Retail CRM (Consumer Relationship Management) Retailing MKTG 3346 Professor Edward Fox Cox School of Business/SMU
  • 2. Customer Relationship Management
    • Recognizes that the customer, rather than individual purchases or contracts, is the source of value to the firm
      • Focuses on customer acquisition and retention
      • Highlights repeat purchase and loyalty over time as key goals
      • Recognizes the importance of customer satisfaction
      • Requires customer data to forecast their response to potential offerings and manage customers over time
  • 3. Customer Relationship Management
    • Relating with few customers
      • Emphasizes sales force
      • Usually B-to-B
    • Relating with many customers
      • Emphasis is on purchase history
      • Often, though not always B-to-C
    • With retail consumers (i.e., many customers)…
    • The retailer must be able to customize the product or price or service offering
    • The retailer must be able to address consumers individually
  • 4. Customer Relationship Management OBJECTIVES
    • Create loyal purchase behavior
    • Customize product and price offerings to target customers
    • Increase customer lifetime value
    Mass Marketing Micro-Marketing Consumer Targeting Continuum Segment Marketing Niche Marketing
  • 5. Customer Relationship Management ORGANIZATIONAL REQUIREMENTS
    • Performance measures
    • Internal incentives
    • Customer information / data architecture
  • 6. Customer Relationship Management PROGRAMS
    • Card programs
      • Discount
      • Credit
      • Membership
    • Specific examples
      • Catalina coupons catalina marketing
      • Collaborative filtering (recommenders)
      • Virtual model landsend .com
    How can the retailer reward loyalty rather than purchase volume?
  • 7. Customer Relationship Management LOYALTY PROGRAMS
    • Loyalty programs are set up to reward customers with incentives such as discounts on purchases, free food, gifts, or even cruises or trips in return for their repeated business.
    • Retailers use them for three reasons:
      • to retain loyal customers
      • to increase loyalty of non-loyal customers
      • to collect information about them and what they buy
    • Loyal customers are the source of most profits
    • Less price sensitive
    • More purchases per customer – higher share-of-requirements
  • 8. Customer Relationship Management RETAIL CUSTOMER DATA
    • Customer Relationship Management (CRM) is enabled by the gathering and warehousing of consumer data
    • Retailers gather customer data from:
      • Frequent shopper or shopper loyalty cards
      • Store credit cards
      • Identifiable tender
  • 9. Customer Relationship Management RETAIL CUSTOMER DATA
    • Retail customer databases are organized collections of data about individual consumers including:
      • Geographic
      • Demographic
      • Behavioral data
        • Purchase histories
        • Appended behaviors
    Databases may enable retailers to gain a competitive advantage Adapted from Prentice Hall
  • 10. Customer Relationship Management RETAIL CUSTOMER DATA
    • Most leading retailers use card programs
      • 89% of retail “leaders” in the practice of CRM use card programs (Progressive Grocer, 2001)
    • However, retailers are not using the resulting data effectively
      • “ The retailers have collected all of this frequent shopper data, but few, if any, attempts have been made to mine the opportunities that it probably presents.” (Shulman 2003)
    • Issues
    • How can retailers better exploit consumer data?
    • How can it be used for targeted marketing offers?
  • 11. Customer Relationship Management DATA WAREHOUSING
    • Data warehousing is the coordinated and periodic copying of data from various sources, both inside and outside the enterprise, into an environment ready for analytical and informational processing
    • Wal-Mart makes good use of its data warehouse. It should. Experts estimate that it is second in size to that of the U.S. government
  • 12. Customer Relationship Management DATA MINING
    • Data mining is the process by which insights are derived from vast amounts of data, such as that contained in a data warehouse.
    • Statistical algorithms are applied to customer data to identify merchandise buying patterns and relationships.
  • 13. Customer Relationship Management MARKET BASKET ANALYSIS
    • A market-basket analysis is uses data mining techniques to determine what predominant categories individual consumers are buying.
    • Based on these analyses, Wal-Mart has changed the traditional locations of several items:
      • Since bananas are the most common item in America’s grocery carts, they sell bananas next to corn flakes (to help sell more cereal) as well as in the produce section.
      • Kleenex tissues are in the paper-goods aisle and also positioned among the cough and cold medicines.
      • Measuring spoons are in housewares and also hanging next to Crisco shortening.
    • How does the retailer respect the shopper’s privacy while gathering information to respond more effectively to that customer?
    • What does the retail shopper get out of CRM? Why should (s)he give is the retailer information about (her-)himself?
    • Should the retailer offer different levels of price or service? What is the advantage of uniformly high prices or customer service?
    • What is the appropriate level of customization? How much does the retailer gain by individual, rather than store-specific offers? At what cost?