Implementation of a customer relationship management strategy to enhance customer satisfaction in the retail selling industry
A case study of Sainsbury's Becton
Studienarbeit 2017 25 Seiten
2.0 Main Literature
3.1 Discuss in detail types of methodologies used in research (quantitative and qualitative)
3.2 Explain types of research techniques/approaches (quantitative and qualitative)
3.3 Discuss your means of data collection
3.4 Data analysis and interpretation
4.0 Discussions and findings (Critical review of the results of the research)
5.0 Recommendation and action plan
In its capacity of retailer with reputation Sainsbury aims to offer its customers products of exceptional quality, intermingled with outstanding customer service. The latter enhances the synergetic potential of the company by providing it with the ability to transcend the barriers of functions and locations.
Nowadays, one of the greatest retailers of the United Kingdom is facing several challenges:
- Competition - on part of the other retailers, from European invaders and on part from the bio chains invasion. Thus, the battle of Sainsbury is for every customer.
- Lack of ability to cope with the constantly changing customer demands. Unfortunately, the latter is usually being ignored especially when talking about the invasion of technologies' impact on the relationship Sainsbury-customer. Hence, via the usage of the modern technologies the retail food chain will strive to deliver outstanding customer service. However, those technologies cannot perform any function in the organization itself, so ultimately the customers will return to the employees of Sainsbury.
- The impact of Brexit. The potential exclusion of the United Kingdom from the single market will have tremendous consequences not only for the Sainsbury's staff, but for the working market in the country as a whole.
This paper therefore poses as its objectives the following:
- Design of a more beneficial strategy able to ensure the fulfillment of the customers' expectations;
- Understanding in detail the desires as well as the needs of the customers;
- Establishing effective mechanism for the implementation of customer relationship management strategy;
The research questions, posed in this paper relate to the following:
1. What strategies need to be established in order Sainsbury to develop close connection with its customers?
2. What is their efficacy in the implementation of a CRM strategy?
3. What are the future opportunities, standing in front of the retail seller?
In this regards, the methodology used will be mainly quantitative. In its essence the quantitative research focuses on the numbers. Its basic aim is to measure quantity or amount and compare it with past records; the latter is all done with the aim to project for the future. In addition, the collection of data required was done by distributing the questionnaires to the visitors of Sainsbury, Beckton. The respondents to the questionnaire were chosen at random. However, the primary focus of the research was on shoppers aged 25-60 years of age. This resulted in 40 key informants who agreed to participate and fill in the previously designed questionnaire, containing closed, as well as open-ended questions and having a section for recommendations and personal opinions. However, the major hindrances, standing in front of the research are the low level of response rate, literary bias and the fact that the research is focused on only one shop. Simply put, the researcher's expectation about the response rate of the survey was at about 35%.
2.0 Main Literature
CRM (or customer relationship management strategy) is the process of regulation of all the aspects of synergy of a company with its prospective customers, sales and service (Buttle and Maklan, 2015). Simply put, the business needs CRM applications in an attempt to provide insight into and ameliorate the company's relationship by combing all the customer interaction into one picture (Buttle and Maklan, 2015).
In brief, the customer relationship management strategy comprises in tactics and techniques that are of utmost importance in the modern world (Kumar, 2012). Talking about customer satisfaction, on the other hand, poses the questions of another complex phenomenon; the latter enables managers to determine which customer satisfaction elements have the greatest influence on the retail selling industry and accordingly what amount of financial means need to be spend in order to improve particular customer satisfaction elements. In addition, customer relationship management strategy is one of the complex approaches, designed to pinpoint, acquire and preserve customers. Studies have shown that the latter is basically done in order to enable organizations with the ability to manage and coordinate the customer's interactions across the multiple channels and departments of the company (Buttle and Maklan, 2015).
A case study of Finnegan shows that these days’ companies possess both - the means and the motivation for the significant improvement of their customer relationship management strategies (Finnegan and Willcocks, 2007).
One good CRM strategy, as a hole should target the entire range of marketing activities, establish good relations with customers and augment the potential of company (Drucker, 2003). Thus, CRM is a business strategy helping the company to maximize profits, revenues and customer contentment.
The customer relationship management strategy gives three basic strengths to any company; first, it enables every worker to be able to handle its own contacts, activities, documents and this in brief is the technology effect to employees. Second, it supplies the company with a tool for individualization of the marketing activities. Third, it enhances the synergetic potential of the company by providing it with the ability to transcend the barriers of functions and locations. It is of immense value to implement the CRM strategy successfully, with all the complexity it involves, in order to support the modern organizations of the 21st century.
Following Porter (1980) there exist three types of successful generic strategies that could be applied to the CRM strategy in any organization. The first one or the differentiator strategy allows the company to achieve competitive advantage via offering a completely different product, or service to its customers. In comparison, the cost leader strategy performs this by offering greater efficiency in production and resource usage. As a result of all these, both strategies require highly contrasting roles for the conduction of market research and implementation of CRM systems. A simple example shows that a differentiator strategy could be used in order to establish strong differentiating customer relationships, while the cost leader strategy might be applied to a particular type of a defensive customer retention strategy. In general, the third type of generic strategy, the focus strategy might as well be adopted by differentiators, or by cost leaders the only difference lying in the fact that in the first case its basic target is market niche, while in the second the broad market (Valos and Bednall, 2007).
To have the best chance for successful implementation of the customer relationship management strategy a company needs the right mix of people, process and technology (Barton, 2008). As you may have guessed of the three the company employees is the greatest challenge talking about sensitivity of users to change. The implementation of a CRM system and strategy changes the daily routine and everyday activities of users, and as such it might seem a hurdle for the users that does not want, or have difficulties in adaptation (Barton, 2008).
Many writers believe that most of the companies choose to implement a customer relationship management strategy due to three primary reasons:
- first, high cost of direct sales with an upward trend. On the contrary, the CRM strategy helps the increase of the sales forces productivity, while decreasing the rising sales costs (Barton, 2008; Buttle and Maklan, 2015; Finnegan, 2007).
- second, the competition in global scale is also augmenting. Modern companies are more than ever in need of contemporary market intelligence. Simply put, the monitoring and tracking more effectively market developments is another positive of the CRM strategy.
- third, the success of a particular company depends on the implementation of an effective marketing mix and of the understanding ( on time) of one's competitors marketing mix strategy. The CRM system collects, assembles and disperses the information needed about the market, especially on part of the customers (Barton, 2008).
Increasing emphasis is also being placed on key benefits of the implementation of the customer relationship management strategy. The most important of them are the better sales and marketing information, the improved productivity and the enhanced customer care (Barton, 2008). With this knowledge, managers of the company can better make a decision whether CRM strategy is the right tool for their organization (Barton, 2008).
In addition, the implementation of the CRM strategy gives marketers the opportunity to augment the customer value and to guarantee customer satisfaction (Mukerje, 2007). Parties involved in this kind of process are the customers and the perceived value that actually gets enhanced.
In another study, Morgan (1995) expects companies to consider not just the customer but also the competitors and the outside competition. Additionally, Day (1994) further enhances the issue by elaborating it and adding concepts such as market sensing, customer linking, technology monitoring. For example, Mukerje (2007) refers to the idea that the implementation of the CRM strategy is a critical aspect concerning the CRM initiative. Yet, even before the actual implementation of the CRM strategy a number of factors should be taken into account. The present study attempts to show how this is done in the case of Sainsbury, Beckton.
The customer relationship management strategy is a strategy that affects the entire company (Peelen, 2005); for example, the most imminent change is that product-oriented organizations will have to transform themselves into customer-oriented ones ( Peelen, 2005). Second, some investments need to be made in order to make possible the communication with customers via different channels. Third, the company needs to learn how to conduct the dialogue with these consumers. Fourth, individual customer knowledge needs to be developed and adequate marketing strategy formulated. Moreover, the company needs to implement all these changes in a well-balanced manner, step by step and in the end to become a relationship-oriented organization (Peelen, 2005).
As a matter of fact the CRM strategy consists of multiple dimensions (Kumar, 2012). Still, many companies consider and think about it only in terms of technology, of a software product, without actually examining the key elements of one successful customer relationship management strategy. In fact, this is the reason why nowadays we found so many CRM strategies failures; the companies have abandoned them, while at the same time they have written off their investments as wasted. This is mostly the reason why customer relationship strategy had better be regarded as a company-level philosophy (Kumar, 2012). Actually, the primary goal of the implementation of the CRM strategy is to deepen intensely the knowledge company has about its customers and as a consequence use it to shape the collaboration between them and the company (Kumar, 2012). Thus, the latter would lead to magnifying the lifetime value of customers to the company.
Therefore, the CRM strategy emerges from strict marketing principles (Kumar, 2012). As such it recognizes the need to achieve balance between organizational and customer interests. In this regards, the goal of the implementation of the CRM strategy is to boost the lifetime value of the consumers for the company and in this regard the customer replaces the employee (Kumar,2012). The abovementioned concept also reflects the philosophy that not all customers are created equally, so different or individual treatment should be applied (Kumar, 2012). Furthermore, this also asserts that customers differ in economic value to the companies, as the same applies to their expectations.
Talking about the implementation of a customer relationship management strategy we need to have in mind the fact that the companies will be able to accumulate individual customer knowledge which they may use in offering customized solutions and in the development of a long-lasting, mutually profitable customer relationships. However, even today too many customer relationship management strategy initiatives are dominated by technology, as well as by the strategic and organizational aspects of the CRM. In most of the cases insufficient attention is focused on questions such as: how to develop a successful relationship with the right customers? How to offer what they want? How to conduct a meaningful dialogue with them?
However, one of the greatest challenges in front of the implementation of a customer relationship management strategy is the integration of a great number of various technological resources so the organization could ensure trouble less interaction with its customers. According to Kandell (2000), the mere adoption a customer relationship management strategy requires integration on three levels: all type of interactions, all media for interaction and across all channels for interaction.
Reddy (2001) states three most prominent factors for the CRM strategy implementation failure; these are organizational change, mismatched technology infrastructure and lack of executive sponsorship. Notwithstanding that fact, these factors are not the basic cause of the failure. In most of the cases this is the lack of a successfully-developed CRM strategy. The later argument is theoretically backed by Silverman (2001) when he comments that the CRM can be highly effective if implemented in a strategic, focused and holistic manner.
In summary, the basic ideas within the review of literature comprise in the following: the customer relationship management strategy comprises in tactics and techniques that are of utmost importance in the modern world (Kumar, 2012). As well as in the fact that one good CRM strategy, as a hole should target the entire range of marketing activities, establish good relations with customers and augment the potential of company (Drucker, 2003). Next, in order to have the best chance for successful implementation of the customer relationship management strategy a company needs the right mix of people, process and technology (Barton, 2008). The key benefits of the implementation of the customer relationship management strategy are mostly the improved productivity and the enhanced customers care and in this way the customer replace the employee (Barton, 2008). With this knowledge, managers of the company can better make a decision whether CRM strategy is the right tool for their organization (Barton, 2008). In reality, the primary goal of the implementation of the CRM strategy is to deepen intensely the knowledge company has about its customers and as a consequence use it to shape the collaboration between them and the company (Kumar, 2012). Of course, drawbacks and challenges exist. The most prominent of them is that product-oriented organizations will have to transform themselves into customer-oriented ones (Peelen, 2005). Second and third, investments aiming to ease the communication with customers need to be made, as well as individual customer knowledge needs to be developed and adequate marketing strategy formulated. The basic problem is that today too many customer relationship management strategy initiatives are dominated by technology, as well as by the strategic and organizational aspects of the CRM. In this review of literature we have also indicated that the informational technologies are nowadays a commodity, more than obligational measure. As a matter of fact CRM strategy implementation is an example for the differentiation of technology, information and implementation capability, as well as of technological changes, affecting all the employees. Tracking the abovementioned issue into this literature review we have found some major omissions that will be drawn upon later. From all of these we must conclude that the CRM implementation is a process, involving changes into the social and into the political organizations; it is not only the installation of a technical system into an organization, but it also includes the behavioral process of managing change (Keen, 1981). In reality, the primary goal of the implementation of the CRM strategy is to deepen intensely the knowledge company has about its customers and as a consequence use it to shape the collaboration between them and the company (Kumar, 2012). Thus, the latter would lead to magnifying the lifetime value of customers to the company. Notwithstanding that fact, CRM (or customer relationship management strategy) is the process of regulation of all the aspects of synergy of a company with its prospective customers, sales and service (Buttle and Maklan, 2015). Simply put, the CRM applications attempt to provide insight into and ameliorate the company's relationship by combing all the customer interaction into one picture (Buttle and Maklan, 2015).