Factor+2+-+Customer+Retention

Post any research you find that is useful relevant to this factor here.

e.g.

Market Share CRM Store layout vs web page layout Direct web marketing (through the companies online presence) Brand power (as even more important with tech reducing chance to differentiate through positioning) internet is generally perceived as a bad thing for customer relationships/ quality of service. However, Tesco have released some online tech guru question answer system to assist customers in buying electricals. This is not possible in the traditional business model as they would have to employ guru's in all stores (admitedly they could be the PC world kind of guru's who dont know their arse from their elbow). Still thought it is one of the few positive steps?! (link: [] ) Also I thought this was interesting (although you may have seen it) its Tesco's customer relationship steps based on where the customer sits for them (source:[| http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/Tesco.com-case-study/] )

It states:

As with other online retailers, Tesco.com relies on in-store advertising and marketing to the supermarket's Clubcard loyalty scheme's customer base to persuade customers to shop online. NMA (2005) quotes Nigel Dodd, marketing director at Tesco.com as saying: ‘These are invaluable sources as we have such a strong customer base’. However, for non-food goods the supermarket does advertise online using keyword targeted ads. For existing customers, email marketing and direct mail marketing to provide special offers and promotions to customers is important. According to Humby (2003), e-retailer Tesco.com use what he describes as a ‘commitment-based segmentation’ or ‘loyalty ladder’ which is based on recency of purchase, frequency of purchase and value which is used to identify 6 lifecycle categories which are then further divided to target communications: Tesco then use automated event-triggered messaging can be created to encourage continued purchase. For example, Tesco.com have a touch strategy which includes a sequence of follow-up communications triggered after different events in the customer lifecycle. In the example given below, communications after event 1 are intended to achieve the objective of converting a web site visitor to action; communications after event 2 are intended to move the customer from a first time purchaser to a regular purchaser and for event 3 to reactivate lapsed purchasers.
 * “Logged-on”
 * “Cautionary”
 * “Developing”
 * “Established”
 * “Dedicated”
 * “Logged-off” (the aim here is to winback)
 * Trigger event 1: Customer first registers on site (but does not buy).
 * Auto-response (AR) 1: 2 days after registration e-mail sent offering phone assistance and £5 discount off first purchase to encourage trial. Trigger event 2: Customer first purchases online.
 * AR1: Immediate order confirmation
 * AR2: 5 days after purchase e-mail sent with link to online customer satisfaction survey asking about quality of service from driver and picker (e.g. item quality and substitutions).
 * AR3: Two-weeks after first purchase - Direct mail offering tips on how to use service and £5 discount on next purchases intended to encourage re-use of online services.
 * AR4: Generic monthly e-newsletter with online exclusive offers encouraging cross-selling
 * AR5: Bi-weekly alert with personalised offers for customer.
 * AR6: After 2 months - £5 discount for next shop
 * AR7: Quarterly mailing of coupons encouraging repeat sales and cross-sales Trigger event 3: Customer does not purchase for an extended period
 * AR1: Dormancy detected – Reactivation e-mail with survey of how the customer is finding the service (to identify any problems) and a £5 incentive.
 * AR2: A further discount incentive is used in order to encourage continued usage to shop after the first shop after a break.

Now lets go green.... for Asda. Little bit on website layout... essentially they have this thing that means they can run live trials of differing website layouts. They think it reduces 'exists' by 19%. (I don't know what an exist is, but am working on the basis it is exts mis-spelt :P) Source: @http://www.customer-strategy.co.uk/home/-/asset_publisher/oh2E/content/asda-takes-guesswork-out-of-online-plans;jsessionid=2B3DCC9D2C08A8B31F9207965BFC23FF?redirect=%2Fhome

Oca-oca-oca-do, oca-do, oca-do..... ocado on the ii-phone, iii-phone @http://econsultancy.com/blog/4195-ocado-launches-iphone-shopping-app



Information on customer retention in the economic downturn: []


 * __From Textbook (Farhoomand):__

E-CRM aims 'to create deeper and long-term relationships with new and existing customers' (p.293). **
 * Move to build customer centric businesses as focus on customer interactions has intensified.
 * Another aspect in this exchange is the firm gathering customer details to profile and use in targeted marketing.
 * Overall objective of gaining loyalty to avoid customers switching to rivals.
 * Information is transformed into competitive intelligence.
 * Can integrate information from customer base and supply chain (allows total visibility through supply chain).

Move within companies to customers previously being looked after by sales and marketing to now being looked after by the enterprise as a whole. Success rates in E-CRM vary widely. **Have any of our supermarkets failed???** __Examples:__

//Tesco:// clubcard //Ocado/Waitrose//: online recipe guidance //Asda//: printable e-vouchers

__Why use CRM? Why try and keep customers and create relationships? (p.298)__
 * Cheap growth option.
 * Incremental investments to generate immediate cash flow.
 * React quickly to customer needs and behaviour as one step ahead.
 * Customers can now switch to alternatives easier because of i) greater control over searching and acquiring decision making material e.g. google, and ii) customer can interact with the medium e.g. reviews on my supermarket and other critical websites where consumers/spectators can make their voices heard.
 * 'It costs 6 times more to sell to a new customer than it does to an existing one'.
 * The odds of selling a product to a new customer are 15%. The odds of selling to an existing customer is 50%.
 * 70% of complaining customers will do business with a firm again if it quickly takes care of a service snag. This shows the importance of building up good relationships with customers through CRM.
 * CRM impacts bottom line performance and employee & customer retention (p.299).
 * Anticipate needs and use info to personalise relationships.
 * CRM must be a balance between value to shareholders and value to customers.

CRM is more useful in industries which have: i) high fixed costs, ii) multiple products and/or services, iii) high flow of customers with low dollar transactions. **Does this fit a supermarket?** Maybe.

__Benefits of E-CRM:__
 * 1) 'e-business architecture and internet technologies' are helping to forge deeper customer relationships (p.294).
 * 2) 'a company can re-orient its entire business towards the customer by basing enterprise management on customer interactions' (p.294).
 * 3) 'Mutually satisfactory relationships make it possible for customers to avoid significant transaction costs switching supplier' (p.295)

__Efficiency benefits of E-CRM:__
 * 1) //Marketing efficiency// - Supermarkets can segment and target individual consumers to maximise value. Leads to a fall in 'expense to revenue' relationships.
 * 2) //Back-end efficiency// - Automated processes such as e-commerce e.g. Tesco.com allow reduction in staff count. Also shorter sales-cycle time.
 * 3) //Service centre efficiency// - More customer information to solve problems quicker when customers call the supermarket's call centre. This will lower customer management costs.

CRM can be seen to be a 'lifetime value cornerstone' (p.294). There are 2 steps used: i) attract the customer and ii) build the relationship with the customer. Opportunity for customers to make savings using clubcard. || Good food at a reasonable price. Easy online shopping experience. Vouchers gained when using the Waitrose Credit Card. || Products as very low prices (lower than Tesco often, apparently). || Moving more services into stores such as pharmacies, opticians and now pregancy check-up service! || The more you shop the more vouchers you get! Allowed to use quick checkout in store to make shopping experiences better. Match Tesco prices to deliver consistent price value on essential goods (not branded). Easy recipe and order ingredients service is unique and offers potential lock-in. || Continued low prices and e-vouchers.
 * || Tesco || Ocado/Waitrose || Asda ||
 * Step One || Promise of saving money, 'every little helps'.
 * Step Two || Continued clubcard offers the more the consumer shops. Targeted offers which match the consumers buying patterns.

Very little retention techniques used other than price promise. ||

It could be argued that the 4Ps of marketing are irrelevant as relationship marketing has taken over as e-business has grown. Relationship management is closely linked to business marketing and quality management.

Transactions -> Relationships

Kotler describes this: move from short-term transactions to long-term relationships. Moving 'from a marketing mix focus to a relationship focus'.

__Web services benefits:__

As part of E-CRM customer experience is improved and Web CRM strategies are used. Move toward web based services (p.296). It brings all departments together into one system allowing them to work together and the customer to receive all information through one location: the company's e-commerce page.

__CRM Strategy (p.301)__
 * 1) Bonding stage
 * 2) Personalisation stage
 * 3) Empowerment stage
 * 4) Customer loyalty achieved

__Retention strategy (p.303)__
 * The focus during customer retention shifts to 'locking in' customer with strong customer information and a strong brand or differentiated service.
 * it is important to remember that customers are 'rented' not 'acquired'. **But the tool in the textbook still says they are acquired to this statement is just hypocritical.**
 * CRM application provides consolidated information to enable a firm to extract more revenue per customer.

__**From Textbook (Jelassi):**__

4 elements in E-CRM (p.216):
 * 1) Customer selection
 * 2) Customer acquisition
 * 3) Customer retention
 * 4) Customer extension

= This is the website bit where we talk about how websites achieve retention! =

__How to achieve customer retention:__
 * 1) Personalisation - design of website to meet consumer needs. Creates 'stickiness'. If the customer wants to move to a competitor and begin using their online service then they will incur switching costs (**Transaction Cost Theory**).
 * 2) Communities - Strong online communities can create **Network effects**. I don't know if supermarkets have online forums. Perhaps 'Your Asda' is an example. An interesting (and irrelevant) example is the OcUK Forums LINK

Both of the above encourage consumers to continue using a site and now switch to a competitors.

Slide designs:
 * To do: Add notes from journals from // Xue et al // and Wang

Slide 1: Old versus New CRM including direct marketing **

Slide 2: **Website design**