What Are the Disadvantages of Customer Relationship Management?

Customer relationship management case analysis, also known as CRM, was first proposed by Gartner Group and is defined as a business strategy that effectively organizes enterprise resources according to the classification of customers, cultivates customer-centric operations and implements customer Centralize business processes and use this as a means to improve corporate profitability, profits, and customer satisfaction.

Customer Relationship Management Case Study

CRM is short for Customer Relationship Management in English, which is generally translated as "customer relationship management". CRM originated in the United States, and the concept of CRM was first proposed by Gartner Group. Since the 1990s, the tide of the Internet and e-commerce has developed rapidly. Different scholars or business organizations have different views on the concept of CRM.

IBM believes that by improving product performance, enhancing customer service, increasing customer delivery value and customer satisfaction, CRM has established a long-term, stable, and trustful relationship with customers, thereby attracting new customers, maintaining old customers, and improving efficiency. And competitive advantage.

SAP: The core of the CRM system is the management of customer data. The customer database is an important data center for the enterprise. It records the various interactions between the company and customers during the marketing and sales process, and the status of various related activities. Various data models to support later analysis and decision making

Based on the above-mentioned classic CRM concepts, CRM can be defined as three levels of sales philosophy, business process and technical support: CRM is a combination of modern information technology and business thinking. It uses information technology as a means to The important combination and design of "customer-centric" business processes forms an automated solution to increase customer loyalty and ultimately achieve increased business operation benefits and profit growth.

Regardless of how CRM is defined, "customer-centricity" will be at the core of CRM. By meeting customer's individual needs and improving customer loyalty, CRM achieves the goals of shortening sales cycles, reducing sales costs, increasing revenue, expanding markets, and comprehensively improving corporate profitability and competitiveness. The original intention of any enterprise to implement customer relationship management is to create more value for customers, that is, to achieve "win-win" between customers and enterprises.

Customer Relationship Management Case Study

Chain supermarket customer relationship management

Trail Blazers: Ken Rob, Senior Vice President of Marketing

Significance: Collecting large amounts of customer information is not enough. The key to success or failure depends on using this information to develop tailored service policies for individual customers.

Ken Rob has a secret, but in fact he is not the kind who does not want to reveal his mind. He is outgoing and cheerful, and says what he thinks. He never hesitates. This is good because he is the senior vice president of marketing at Dick's, a supermarket with eight branches in rural Wisconsin. Oh, this is not the same as being the head of the CIA, so his "secret" is unlikely to interest James Bond. . We just want to say that Rob knows something not known to his opponent.

Rob's secret is that when his customers come to the mall to buy, he knows what these customers want to buy. This, together with the good reputation of the quality service provided by supermarkets, is the main defense of Dick's supermarket chain against low-priced competitors and category killers. Dick Supermarket uses DataVantage, a software product developed by the Relationship Marketing Group (RMG) in Connecticut. By combing the data in the scanning device, its customers can be predicted. When will I buy certain specific products again. Next, the system launches special prices "just in time".

Here's how it works: Customers who spend more than $ 25 a week at Dick's receive a customized shopping list every other week. This list is derived from the customer's previous purchase records and the current price, transaction policy or discount of the goods provided by the manufacturer. Customers can carry this list with them when shopping or keep it at home. When the customer goes to the checkout counter, the cashier will scan the shopping list printed with barcodes or the discount club membership cards commonly used by customers. Either way, any special items on the shopping list will be automatically redeemed, and the customer's shopping record at the store will be refreshed to generate the next shopping list.

"This is good for us and the manufacturers, because you can customize the promotion plan according to the customer's needs. From this you can make a plan that is proportional to the customer's business value," Rob said.

Dick Supermarket also relies on customer-specific information to target customized promotional items across a range of product categories to the most valuable customers. For example, users of non-aspirin products (such as Tylenol) can be divided into three groups: national brands, store brands, and swingers. Each group of customers in these groups can be divided into three sub-groups based on low, medium and high usage. The amount of use represents the long-term value that customers provide to Dick Supermarket in a certain category of goods (in this product category alone, there are six "modules", resulting in a total of 9 different types of customers-this Enough to launch a mass custom marketing campaign).

Assuming that the goal of the supermarket is to transform Tayno users into store brand users, Rob will devote his most aggressive marketing campaigns to high-volume customers because they have the most potential value. The initial discounts for high-volume customers are much higher than those for low- and medium-volume customers. The timing of the promotion will coincide with each customer's unique purchase cycle, and Rob can make a reasonable prediction by analyzing the customer's past shopping records.

"Customers think this is great because the shopping list accurately reflects what they want to buy. If the customer has a dog or cat, we will give him a dog or cat food discount; if the customer has a child, they will You can get discounts on children's products, such as diapers and baby food; customers who often buy a lot of vegetables will get discounts on many vegetable products, "said Rob." If they do nt just shop in a supermarket, they will miss us based on their shopping records. And some special offers, because obviously we ca nt know what they bought elsewhere. However, if most of the goods they buy come from our store, they usually get a fair value return. We More loyal customers often get coupons worth $ 30 to $ 40 along with their shopping list. Our goal is to reward those customers who spend most of their daily spending with us. "

Sometimes you can minimize the economic losses caused by discounts by obtaining sponsorship from other relevant units; in turn, these units can share the information you continuously collect. Take Dick's supermarket as an example, manufacturers will subsidize most of the discounted goods. As part of the overall agreement, manufacturers can obtain the analysis results (consumer names removed) found in extremely detailed sales information. The processing and processing of these sales information is carried out by the relationship marketing group, which not only provides software products, but also provides scanning data mining services.

Important note: watch out here. Although frequency marketing and concession card programs are effective ways to collect customer information, they are often abused, resulting in unfavorable results. The first task of a one-to-one marketer is to identify and differentiate customers, so in the retail industry, frequency marketing programs like Dick's may become an indispensable auxiliary tool. It encourages individual customers to "raise their hands to declare their identity" every time they enter the store, in order to get discounts. The actual operation of the frequency marketing plan also provides a good platform for interaction with customers. This interaction can be carried out by letter, or through the cashier or online.

But danger is hidden here. Frequency marketing is only a strategy for obtaining information and interactions with individual customers, not a strategy that is sufficient to keep customers loyal-it is not possible to face the same promotions from competitors. To turn this customer information and interaction into a learning relationship, and make customers realize that it is more convenient for them to stay loyal rather than participate in similar activities offered by competitors, then you must follow the Dick supermarket approach. You must customize the relevant service policy for each individual customer based on the information collected. In this way, with the increase of any individual customer information collected, the service policy for that customer will be adjusted to be more specific and accurate, while also allowing the customer to make a collaborative investment in the services you provide. In addition, to the maximum possible extent, this plan should not only include discounts that are precisely tailored to customers, but also include rewards beyond the price, such as recipes, weekly diet plans, product usage tips, and healthy nutrition Knowledge, fast checkout channels, and door-to-door service.

Keep in mind that the purpose of marketing is more than just giving away gifts.

In the short term, this is easily forgotten immediately after the launch of the loyalty program. You may mistakenly think that giving something will make customers more loyal to you. But what if your competitor has launched a similar plan and now your customers can get discounts in any store? Who wants a group of customers who are always looking for discounts? The full effect of your doing this is undoubtedly the same as training your most valuable customers to pursue price concessions.

In 1997, ACNielsen conducted a survey of a "typical" U.S. city. Each of the three major local grocery stores competing with each other had a frequency marketing plan. Loyalty program participants account for more than 90% of sales in each store. However, three-quarters of these participants not only have a loyalty program discount card in their wallets, but more than half have all three.

Keep in mind what makes Dick Supermarket one of the few successful one-on-one marketing practitioners: Rob uses information from his customers to provide customers with incentives that competitors can't easily imitate because of these incentives It is specially designed and customized according to each customer's own hobby and shopping cycle. The more a customer shop in Dick's, the more special offers the supermarket has tailored for them, which in turn will motivate customers to stay loyal. This makes it difficult to compete with the plan.

Rob sees this information as his little secret. "In most cases," he said, "if your opponent wants to know the price of your product, they just need to go to your store to check the price tags on the shelves, or they can also browse your weekly ads. But With this type of shopping list, competitors don't know anything about what you are doing now, because each customer's shopping list is different. "