Customer Relationship Management in Retailing

Customer Relationship Management in RetailingRELATIONSHIP MARKETING INVOLVES CREATING, MAINTAINING, AND ENHANCING STRONG RELATIONSHIPS WITH CUSTOMERS.RELATIONSHIP MARKETING IS AN ON GOING INTERACTION BETWEEN A BUYER AND A SELLER IN WHICH THE SELLER CONTINUOUSLY IMPROVES ITS UNDERSTANDING OF THE BUYERS NEEDS AND THE BUYER BECOMES INCREASINGLY LOYAL TO THE SELLER. IT GOES BEYOND CONVENTIONAL MARKETING AND SEEKS TO ESTABLISH AN ENDURING RELATIONSHIP WITH THE CUSTOMERS.

Modus operandi THE COMPANY HOPES TO CONVERT MANY OF ITS QUALIFIED PROSPECTS IN TO FIRST TIME CUSTOMERS, AND TO THEN CONVERT THOSE SATISFIED FIRST TIME CUSTOMERS INTO REPEAT CUSTOMERS. BOTH FIRST TIME CUSTOMERS AND REPEAT CUSTOMERS MAY CONTINUE TO BUY FROM COMPETITORS AS WELL. THE COMPANY THEN ACTS TO CONVERT REPEAT CUSTOMERS IN TO CLIENTS

THE NEXT CHALLENGE IS TO TURN CLIENTS INTO ADVOCATES, CUSTOMERS WHO PRAISE THE COMPANY. THE ULTIMATE CHALLENGE IS TO TURN ADVOCATES INTO PARTNERS, WHERE THE CUSTOMER AND THE COMPANY WORK TOGETHER ACTIVELY. IN RELATIONSHIP MARKETING THE FOCUS IS ON RETAINING THE CUSTOMER AND GETTING THE REPEAT BUSINESS. HENCE THE QUALITY OF PRODUCTS, SERVICE AND DIRECT CONTACT WITH CUSTOMERS RECEIVE A HIGH PRIORITY.THE BASIC PHILOSOPHY UNDERLYING RELATIONSHIP MARKETING IS THAT THE GOAL OF ALL MARKETING ACTIVITY SHOULD BE THE ESTABLISHMENT OF MUTUALLY BENEFICIAL PARTNERSHIPS WITH CUSTOMERS. HENCE THE CHALLENGE TO MANAGEMENT IS TO DEVELOP MARKETING STRATEGIES THAT ARE DESIGNED TO CREATE ENDURING CUSTOMER RELATIONSHIPS.

Indicators of Effective Relationship Marketing in RetailingA high level of commitment between consumer and retailerA high level of trust between consumer and retailerOpen communication channels between both parties with free exchange of informationRetailer having the consumers interest at heart

A commitment to quality for both partiesAn attempt by the retailer to favourably lock-in or retain the customer

CRM Strategies in RetailingCRM Strategies refer to any effort that is actively made by a seller towards a buyer and is intended to contribute to the buyers customer value above and beyond the core product and / or service efforts received ,and can only be perceived by the buyer after continued exchange with the seller. Hence, CRM strategies attempt to provide benefits to the buyer beyond the core service performance.For instance, many traditional Indian retailers treat the regular customers in a warm and personal way and also provide them with special in terms of home delivery, discounts etc. These benefits are an attempt to provide benefits in addition to the core service performance.CRM strategies could be a combination of one or all of the following benefits ;

Personalization benefitsSpecial treatment benefitsRewardsCommunication benefits

Personalization BenefitsPersonal exchanges between buyers and sellers are important in influencing the quality of relationship.In certain situations, sellers and shoppers may develop buyer-seller relationship akin to personal friendships.There are many personalized shoppers who appreciate personal contact in the store.In fact , sometimes the social interaction works as a prime motivator for some consumers to visit retail establishments.These people consider retail encounters as valuable sources of social contact.Personalization refers to the way in which employees relate to customers as people- cold and impersonal on the one end, and warm and personal on the other.

Special treatment BenefitsConsumer focus and selectivity, i.e, all consumers do not need to be served in the same way, is a key aspect of CRM.If a consumer receives personalized, customized service from retailer A but not from retailer B- and if this service is valued- then the consumer will be less likely to leave retailer A for B.Customers, generally, perceive such customization efforts as preferential treatment not normally provided to the other customers. The retailers can distinguish between atleast two identifiable customer segments ; loyal customers and non-loyal customers. Differentiating between loyal and non-loyal buyers enables a seller to address a persons basic human need to feel important. Most retailers use core-service upgradation and service augmentation as ways to provide special treatment benefits to customers in return for their loyalty. Communication BenefitsCommunication is often considered as a necessary precondition for the existence of a relationship.A sellers communication with a buyer conveys their interest in the buyer and serves to strengthen the sellers relationship with the latter.Efforts to stay in touch with the customers have been identified as the key determinants of relationship enhancement in retailer-customer relationship.

Generally, communication strategies as part of CRM efforts refer to direct communication to the customers, as against mass-media communication, which does not afford selectivity.However, it does not include face to face interaction, which forms part of the personalization efforts by the retailer.Many retailers adopt direct mail, e-mail, telephone, and SMS as means to interact with their loyal customers or members of loyalty programmesRewardsProviding customers with tangible rewards is often referred to as level one CRM. This level of CRM relies primarily on pricing incentives and money savings to secure customers loyalty.It implies that clients earn extra based on purchasing performance.As opposed to the previously discussed relationship efforts, rewarding efforts are of a more functional, economic nature.