Sainsbury is a large UK grocery retailer known for its modern CRM framework. It implements various CRM strategies like customer intimacy, developing networks through partnerships, and using data mining and loyalty programs. Sainsbury has invested in technology like a data warehouse to analyze customer purchase data from its Nectar loyalty card program to improve marketing campaigns and store product offerings. The company focuses on understanding customer needs and delivering value to build long-term customer relationships.

1. 4/12/2015
CRM Strategies & Implementation | Karthik Vengatesan-13MBA1031
KARTHIK
VENGATESAN
13MBA1031
CUSTOMER RELATIONSHIP MANAGEMENT –
STRATEGIES & IMPLEMENTATION AT
SAINSBURY STORES

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Sainsbury Stores
* 3rd Largest Retail Store
* 16.5% Market Share (UK)
CRM Strategy & Implementation
Introduction
CRM is a term that has multiple definitions. For example, CRM is simply a bridge between
marketing & IT; and hence CRM is an IT-enabled sales & service function. For others, its little
more than precisely targeted 1-to-1 communications. CRM helps in establishing
relationships through various steps, namely;
1. Customer Portfolio Analysis
2. Customer Intimacy
3. Network Development
4. Value Proposition Development
5. Managing Relationships
Sainsbury store is known for its well known establishment of modernized CRM framework.
In retail business, an effective customer relationship management represents essential, due
to the changing pattern of market dynamics.
CRM Strategies & Implementation – Sainsbury Retail Stores
Customer Intimacy
Choosing customers is one thing. Getting to know them well is altogether different. Most
companies collect customer data. Some industries are overwhelmed with information such
as; scanner data, loyalty card data, complaints files, market research, geo-demographic
data. The challenge is to use the data better for understanding of customer behaviour. At
Sainsbury Stores, Data Mining is an intelligent method through which it sets a competitive
advantage from its competitors.
Sainsbury has a well reputed Customer Intimacy to establish its Customer Relationship
Management. Once there was a letter from a 3 ½ old girl, a consumer of Sainsbury asking,
“Why was tiger bread called a tiger bread, instead of calling it a giraffe bread?” Sainsbury
loved the interaction from the 3 ½ year old child and took action to change the name of the
bread as per the request from the baby.

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Below was the reply from Sainsbury Store along with a £ 3 gift card to promote further
sales.
Not just with the reward for 3 Euro, the company went on to make a public announcement
to rename the bread to Giraffe bread as per the baby consumer’s request.

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Developing Networks
At Sainsbury Stores, competitions are not against companies. That is, Sainsbury doesn’t
compete with Tesco. But their respective networks compete. Tesco’s network includes
Royal Bank of Scotland for its retail banking offer and Privilege Insurance for its insurance
offer, which is working better than Sainsbury. A company’s network position i.e. its
connectedness to other parties whi co-operate in delivering to the chosen customer is a
great source of competitive advantage. CRM requires owners and investors who will commit
to long-term investment in the people, processes, and technology to implement CRM
strategies.
Loyalty Card Holders – Customers
Loyalty card holders of Sainsbury do not shop at other retailers and always come back to
Sainsbury for the next purchase. Whereas, customers who do not hold such Loyalty Cards
tend to switch between different retailers. Newsletters sent to loyalty card
holders/customers are the most reliable way to share information to the customers. The
Loyalty Card scheme was introduced
through the name, Nectar Card Scheme.
The program raised massive response
among customers. The Card Holder
Membership program has been able to
spread over a solid customer base of 11.5
million customers since its introduction at
2002. The Nectar Card scheme is
considered as having connection with
increased number of partners and
attracting the attention of more customers from all over the world. The Nectar Card offers
partnership with retailers and organizations and has been playing the key role to collect
customer data. In terms of TESCO, customer data was collected only within TESCO whereas,
Sainsbury Stores collects data with its partnership organizations and through other sources.
During Christmas 2011, Sainsbury experiences the highest number of Nectar card users that
has allowed redeeming points worth up to £100 million. Rewards generated through use of
Nectar data has been offered in the store that has allowed customers to potential
purchases.

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The Nectar Card Scheme has helped policy makers at Sainsbury stores to understand where
the business can be established or expanded.
Social Networking
Sainsbury stores has managed to have a strong presence in social networking websites such
as Facebook, Twitter, Bebo and few others.
In terms of Social Networking Presence, Sainsbury does effective evaluation in order to find
its Word of Mouth and customer advocacy through various techniques. Below image shows
the sentiment analysis for Sainsbury.
Recent Trends of CRM at Sainsbury
Sainsbury Stores has been in a continual process of applying customer relationship
management strategies into practice. Sainsbury has a magazine that’s being mailed to
customers with the details of latest and exclusive offers. These magazines have
advertisements, articles and latest news on the products and services. Sainsbury has also
been gradually encouraging the shoppers to shop online and in store. Sainsbury has been

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prioritizing on collecting information on the customers experiences. This becomes an
effective element to formulate most beneficial and effective marketing strategies.
Components of CRM Strategy – Sainsbury
 Gender and Age Group as Core Target of CRM
 Frequency of Shopping as a Goal of CRM
 Shopping at other Retailers as an Indicator of Ineffective form of CRM
implementation
 Store selection as a Sign of Recent Trend of CRM
The IT Enabled CRM Way
Sainsbury has invested in Tera Data Data Warehouse System in 2002 in order to enable data
capture, creation, processing and analysis for understanding consumer behaviour. Since its
investment the ROI from direct marketing has risen threefold.
The 5Tbyte Data Warehouse, which is used to analyse Nectar Card Information to improve
the accuracy of marketing campaigns, has provided a number of benefits across the
business. Significant cost savings have been realized by doing the customer analysis in house
instead of using agencies.
The Head of Marketing Analytics – Alex Fovargue says;
Improved information has allowed the retailer to ensure stores are offering the correct
product mix. There are 10 customer segments, which are based on purchase behaviour.
Using Teradata has allowed Sainsbury to create clustered store formats to deal with
variations. Sainsbury has completed its business transformation programme it began with
Accenture in 2000. The merging of Teradata datawarehouses for customer and trading
information. This will allow the marketing department to analyse roll data as well as Nectar
Card Information, increasing accuracy of Campaigns.
IT overhaul at Sainsbury’s has included 14,000 NCR point of Sale systems running Retailix
Software 1000 services based on Sun Microsystems and EMC Technology 6000 Compaq HP
Desktops and Retex Merchandising and forecasing software.
We have a single customer view, which helps other areas of the business, such as energy
and utilities, and we can report how a campaign is going days after it has dropped. Most
importantly, targeting is data-driven rather than being done on gut feel.

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Family Programme & Other Services
In 1998, Sainsbury launched the Family Programme to communicate with family customers
with young children and pregnant women. The aim of this research is to demonstrate that it
has a caring organization that knows it customers well and understand their needs. With
increasing focus on diet, health and nutrition, championing basic everyday quality at
appropriate and fair process. Sainsbury is committed to restoring and delivering its Unique
Customer Proposition. Sainsbury’s traditional focus on fresh and own label products in
order to increase Sainsbury reputation for innovative and quality products at fair prices. In
particular, through sub brands like Taste the Difference and Be Good to Yourself premium
and health ranges will be the best available and a significant point of difference from other
mass market operations.
Sainsbury stores concentrate on an iconic initiative that can make a difference. These
initiatives are based on five corporate responsibility principles;
1. Respect for the environment
2. Best for food and health
3. Sourcing with Integrity
4. Making a positive difference to our
5. Sourcing with integrity.
Marketing Plan
The marketing plan shows how the company will develop and maintain profitable customer
relationships. In the process, however, it also develops a number of internal and external
relationships. It affects how marketing personnel work with each other and with other
departments to deliver value and satisfy customers. All these relationships are important to
the organizations success, so they are be considered when the marketing plan is being
developed.

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The essence of Sainsbury’s CRM
The objectives of a CRM strategy must consider company’s specific situation and its
customers needs and expectations. Information gained through the CRM initiatives can
support the deveoplment of marketing strategy by developing the organization’s knowledge
in areas such as identifying customer segments, improving customer retention, improving
product offerings (by better understanding customer needs), and by identifying the
organizations most profitable customers.
Sainsbury has identified its customers and increasing value added components to the
customer is a key dimension to its profitability. Sainsbury is driving towards establishing a
dialogue with customers, understanding and anticipating customer change, and attempting
to maximize the lifetime value of the customer. Think about what your service, and the
manner by which you deliver it, means to your customer this strategy is helping Sainsbury to
narrow its losses.
Sainsbury’s Research Techniques
There are multiple channels through which Sainsbury which can be listed as below;
 Primary Research
o Direct contact
o Internal research
o Feedback from customers
 Secondary Research
o Market analysis
o e-Business
o Data Analysis
Customer Relation Management
Three Key Methods
1. Customer Acquisition; 2. Customer Retention; 3. Customer Extension
Three Contextual Factors
1. Marketing Orientation; 2. Value Creation; 3. Innovative IT

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Conclusion
CRM is widely misunderstood by marketing management and seriously misrepresented by
software houses. Companies are being sold front-office and back-office solutions, but are
missing on the fundamental, strategic benefits that CRM can provide. CRM at its most
sophisticated has the potential to integrate all business process around the requirements of
strategically significant customers, a fact that most IT Solutions fail to acknowledge. The
basis for better understanding customer behaviour & customer segment for customer
relationship management is the Loyalty Card Holders. Sainsbury stores view that customer
relationship management has been continually covering areas like building and maintaining
relationships with the core base of customer, income and sales. Relationship with customers
is considered as the most influential factor of CRM.
References & Sources
1. International Journal of Managing Value and Supply Chains (IJMVSC) Vol. 4, No. 1,
March 2013
2. The CRM Value Chain - Francis Buttle, Macquarie University
3. www.computerweekly.com
4. www.thisisnumero.com
5. www.ukessays.com
6. Google Images