Customer Relationship Management in Retailing CRM Definition - CRM in Organized - CRM in Unorganized Sector Loyalty Programmes Managing Retail Chains - Challenges - Decisions on Franchising

1. CUSTOMER
RELATIONSHIP
MANAGEMENT IN
RETAILING
Presented by
DHEERAJ RAWAL
Linkedin: www.linkedin.com/in/djrawal/
facebook: www.facebook.com/rawaldheeraj

2. SUMMARY OF
CONTENTS
CRM Definition
- CRM in Organized
- CRM in Unorganized Sector
Loyalty Programmes
Managing Retail Chains
- Challenges
- Decisions on Franchising

3. WHAT IS
CUSTOMER
RELATIONSHIP
MANAGEMENT
(CRM)?
CUSTOMER RELATIONSHIP MANAGEMENT refers to all
marketing activities directed towards establising, developing,
and maintaining succesful relational exchanges with the
customer.
In Simple Terms,
Customer relationship management is an approach to manage
a company's interaction with current and potential customers.

4. A HIGH LEVEL
OF TRUST
BETWEEN
CONSUMER
AND RETAILER
INDICATORS OF
EFFECTIVE RELATIONSHIP MARKETING IN RETAILING
A HIGH LEVEL
OF
COMMITMENT
BETWEEN
CONSUMER AND
RETAILER
A LONG TIME
HORIZON (AND
LENGHT OF
RELATIONSHIP)
OPEN
COMMUNICATIONS
CHANNELS
BETWEEN BOTH
PARTIES WITH
FREE EXCHANGE
OF INFORMATION
RETAILER HAVING
THE CONSUMER'S
INTEREST AT
HEART

5. - Focus on Single Sale
- Orientation on product features.
- Short Time Scale
- Little emphasis on customer service.
- Limited customer commitment
- Moderate customer contact
-Quality is a concern of production
TRANSACTIONAL
MARKETING
CUSTOMER RELATIONSHIP
MARKETING
DIFFERENCE BETWEEN TRANSACTIONAL
MARKETING AND CRM
Pixelast | Design and Tech
- Focus on Customer Orientation
- Orientation on product benefits.
- Long Time Scale
- High emphasis on customer service.
- High customer commitment
- High customer contact
-Quality is a concern at all.

6. WHAT IS
ORGANIZED
RETAIL SECTOR?

7. CRM IN
ORGANIZED
SECTOR
In Store Retailers
Organized retail sectora can be divided into two segments:
1.
They operate from a fixed point of sale location. They are
located and designed to attract a high volume of walk in
customers.
2. Non Store Retailers
They reach out to the customers at their homes or offices.

8. WHAT IS
UNORGANIZED
RETAIL SECTOR?

9. CRM IN
UNORGANIZED
SECTOR
The unorganized retailers, especially in India, comprises
the kirana or small independent stores located in
neighbourhood centres and central business districts of a
city.
These stores have limited reach in the sense that people
living in a particular locality visit the store in their own
colony. The USP of these stores is the convenience they
provide to the customer by virtue of their location.

10. LOYALTY PROGRAMMES HAVE BEEN ACTIVE IN INDIA SINCE
1995, WHEN BRITISH AIRWAYS LAUNCHED THE SOUTH ASIA
VERSION OF ITS EXECUTIVE CLUB FREQUENT FLYER
PROGRAM IN THE COUNTRY.
BASES OF LOYALTY PROGRAMMES
Loyal Customers are cheaper to serve.
Loyal Customers are wiling to pay more for a given bundle of offerings.
Loyal Customers act as effective marketeers for the store's offering.
1.
2.
3.

11. CHOOSING A
LOYALTY
STRATEGY
HIGH
PROFITABILITY
Good fir between customer's offerings and customer's needs.
High profit potential.
BUTTERFLIES
Aim to achieve transactional satisfaction, not attitudinal loyalty.
Milk the accounts only as long as they are active.
Key challenge is to cease investing soong enough.
Communicate consistently but not too often.
Build both attitudinal and behavioural loyalty.
Delight these customers to nuture, defend and reta
ACTIONS
Good fit between company's offering and customer's need.
Highest profit potential.
TRUE FRIENDS

12. CHOOSING A
LOYALTY
STRATEGY
LOW
PROFITABILITY
Little fit between company's offerings and customer needs.
Lowest profit potential.
STRANGERS
Make no investment in these relationships.
Make profit on every transaction.
Measure both the size and share of wallet.
If share of wallet is low, focus on up and cross selling.
If size of wallet is small, impose strict cost controls.
ACTIONS
Limited fit between company's offerings and customers' needs
Low profit potential.
BARNACLES

13. REQUIREMENT OF LOYALTY PROGRAMME
CUSTOMERS TO
ENROL
REWARDS,
DISCOUNTS, OR
SERVICES BASED ON A
CUSTOMER'S
SPENDING PATTERNS
BENEFITS
CUSTOMERS CAN
RECEIVE FROM
SPECIFIC
PURCHASING
BEHAVIOUR

14. CRITERIA FOR DRAFTING A
LOYALTY PROGRAMME
- ENROLMENTS MUST BE VOLUNTARY.
- RIGHTS AND OBLIGATIONS MUST BE STATED CLEARLY AND IN WRITING
ON CONCLUSING OF AN AGREEMENT.
- INFORMATION REGISTERED MUST BE ADMINISTERED IN AN ETHICALLY
PROPER MANNER.
-THERE SHOULD BE PROPORTIONAL AND UNDIFFERENTIATED EARNING
OF BONUS.
- NO RULES SHOULD BE ESTABLISHED CONCERNING EXPIRY LIMITS.

15. DELIVERY OF LOYALTY PROGRAGMMES
FREQUENT SHOPPER
CARD WITHOUT
CREDIT LINKAGE
STORE CREDIT CARD
WITH TIERED
MEMBERSHIP
BENEFITS
CO-BRANDED CREDIT
CARDS SUCH AS VISA,
MASTERCARD ETC.

16. Types of Loyalty Programmes

17. It is also known as
coalitions. Partnered loyalty
programmes may be multi
sector programmes when
the various partners to the
loyalty programmes belong
to different sector of the
industry. If partner belong to
same sector, it is single
sector loyalty programme.
In a coalition loyalty
programme, the
management is
independent of any of
the partners.
A loyalty card is
primarily an
information card from
which follows better
decision-making in
both marketing and
cost reduction.
MULTI
SECTOR AND
SINGLE
SECTORLOYAL
TY
PROGRAMME
SINGLE
OPERATOR
AND MULTI
PARTNER
PROGRAMME
TRUE
COALITION
PROGRAMMES
LOYALTY
CARD
These programmes are
owned by a single operator,
but members of such
program can collect points
when buying from various
partners in the program.

18. CHALLENGES FOR MANAGING RETAIL CHAINS
Certain Quality Standards at Different Locations.
Certain Service Standards over Different outlets.
Challenge of Expanding Rapidly before others can copy the idea.
Physical Facilities and labour makes it very difficult for service organization
to control quality and deliver a consistent experience to the consumers.
Retail chain has to be sensitive and responsive to the local environment and
culture.
The chains also faces a changing social, technologicalm and political
environment.
1.
2.
3.
4.
5.
6.

19. IT CAN RAPIDLY EXPAND BUSINESS
LEVERAGING ON INVESTMENT
MADE BY FRANCHISEE IN LAND,
BUILDING AND EQUIPMENTS
FRANCHISEE HOLDER IS A PERSON
WHO IS HIGHLT MOTIVATED AND
THUS NOT NEED TO BE MONITORED
FRACNHISEE CAN RAPIDLY GROW
THROUGH THIS ROUTE. IT CAN
QUICKLY ENABLE NATIONAL LEVEL
ADVERTISING AND PROMOTION.
FRANCHISING
Franchising is based on a marketing concept which can be adopted by an organization as a strategy for
business expansion. Where implemented, a franchisor licenses its know-how, procedures, intellectual
property, use of its business model, brand, and rights to sell its branded products and services to a
franchisee.
USE OF LOCAL RELATIONSHIPS
AND KNOWLEDGE OF THE
FRANCHISEE FOR BETTER
PENETRATION INTO THE MARKETS

20. SELECTION OF FRANCHISEE
FINANCIAL STANDING
INFRASTRUCTURE
REPUTATION AND EXPERIENCE
COMPATIBILITY IN WORKING STYLES

21. QUESTIONS? COMMENTS?
LET US KNOW!