Tesco is one of the leading retailers in the global market. This UK-based multinational is also regarded as one of the pioneers of the use of Customer Relationship Management (CRM) as it launched its CRM program as far back as the 1990s (Mollah 2014). It is noteworthy that the system was employed successfully, and it positively affected the company’s relations with customers as well as the overall development of the organisation.
The company managed to provide the necessary training to equip its employees with the necessary skills needed to use CRM. Researchers note that the company failed to construct the lifelong loyalty as various factors have an impact on the development of the relationships between the customer and the retailer (Hassan & Parves 2013). Nonetheless, the organisation managed to make the process more efficient through the use of CRM.
The major stimulus for the use of the CRM system was the company’s focus on ‘creating value for customers, to earn their lifetime loyalty’ and understanding their customers better (cited in Mukerjee 2013, p. 121). The company utilised the data obtained with the help of CRM tools to implement thorough research concerning the customers’ preferences, particular purchases, money spent and so on. The information was crucial for the development of the retailer’s pricing strategy as well as loyalty programs.
Tesco introduced its Club cards in the 1990s. It is remarkable that the company created different clubs where customers with similar interests and incomes could be found. Some of these clubs are ‘My Time’ and ‘Customer Championships’ (Hassan & Parves 2013). Members of the club receive a card with a bar code that processes information quickly, which is beneficial for both the customer and the retailer. The introduction of cards that could be adjusted to key rings was another effective solution (Mukerjee 2013). People could be sure that they had the card whenever they shop. This was also important for the retailer as every purchase could be traced and processed.
Apart from the use of cards, Tesco used other types of communication. For instance, the customers received magazines that were developed for a particular group of clubs (Mukerjee 2013). The magazines differed in the products promoted as well as messages delivered. It is possible to note that the magazines were another form of communication that made the customers feel specific care of the retailer who tried to meet the needs of every customer.
As for the form of the CRM, Tesco used a package-based system (Dalfard, Jafari & Alizadeh 2012). The system involved the use of software and hardware as well as such type of communication as calls (through call centres) and magazines. The introduction of the company’s website enabled the company to introduce other types of communication. For example, chats and later communication through social networks.
In conclusion, it is possible to note that the CRM employed in Tesco has proved its efficiency. Although, the organisation has not achieved its aim to develop a network of lifelong loyal customers, it increased the number of loyal customers significantly. The company managed to develop proper communication channels with its customers. Importantly, the organisation has developed effective strategies to collect data concerning customers’ preferences, needs and buying capacity. This information can help the retailer to come up with the most appropriate pricing strategies and loyalty programs. The use of diverse tactics and tools within CRM shows that the system can help any organisation meet its goals.
Critical Success Factors
Reference List
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