Tesco Company’s Customer Relationship Management

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

Source Success Factors Justification
Long and Khalafinezhad (2012)
Oluseye, Tairat, Emmanuel (2014)
Interaction management Interaction management involves the use of the most appropriate and convenient channels of communication. Customers should be able to provide their feedback easily, and the company should ensure the introduction of various programs that can be easily accessed.
Kordalipoor, Shahhosseini and Hamidi (2015) Research The use of CRM should be facilitated by extensive research. It has been acknowledged that research can provide companies with the most effective strategies and tools to develop and manage relationships with customers.
Soliman (2011) Culture It is essential to make sure that CRM is a part of the organisational culture. More so, top management should encourage employees to embrace the culture and make use of CRM. All the employees should understand the importance of CRM and its benefits. Otherwise, the utilisation of CRM will be ineffective as employees will fail to use CRM efficiently.
Alipour and Mohammadi (2011) Understanding and separating customers Researchers state that understanding and separating customers are instrumental in the development of proper relationships with them. It also enables the company to meet the customers’ needs. The example of Tesco is very illustrative as the company divided its customers into groups in accordance with their interests, which has proved to be effective.
Dhaka and Nahar (2014) Staff training and development It has been found that companies that provide staff training and development implement CRM effectively while the lack of training has a negative effect on the system’s implementation. Therefore, it is crucial to make sure that employees receive the necessary training and support associated with the use of CRM.

Reference List

Alipour, M & Mohammadi, MH 2011, ‘The effect of customer relationship management (CRM) on achieving competitive advantage of manufacturing tractor’, Global Journal of Management and Business Research, vol. 11 no. 5, pp. 26-36.

Dalfard, VM, Jafari, A & Alizadeh, T 2012, ‘Application of knowledge management in customer relationship management processes’, Research Journal of Applied Sciences, Engineering and Technology, vol. 4, no. 12, pp. 1762-1766.

Dhaka, VP & Nahar, P 2014, ‘A review: benefits and critical factors of customer relationship management’, International Journal of Advanced Networking and Applications, vol. 6 no. 1, pp. 2191-2194.

Hassan, A & Parves, M 2013, ‘A comparative case study investigating the adoption of customer relationship management (CRM) the Case of Tesco and Sainsbury’s’, International Journal of Managing Value and Supply Chains, vol. 4, no. 1, pp. 1-10.

Kordalipoor, M, Shahhosseini, R, Hamidi, K 2015, ‘A literature review on customer relationship management and critical success factors’, Applied Mathematics in Engineering, management and Technology, vol. 3, no. 3, pp.401-411.

Long, CS & Khalafinezhad, R 2012, ‘Customer satisfaction and loyalty: a literature review in the perspective of customer relationship management’, Journal of Applied Business and Finance Research, vol. 1, no. 1, pp. 6-13.

Mollah, AS 2014, ‘The impact of relationship marketing on customer loyalty at Tesco Plc, UK’, European Journal of Business and Management, vol. 6, no. 3, pp.21-55.

Mukerjee, K 2013, ‘Strategizing for CRM to leverage its benefits’, Business Strategy Series, vol. 14, no. 4, pp.118-122.

Oluseye, OO, Tairat, BT, Emmanuel, JO 2014, ‘Customer relationship management approach and student satisfaction in higher education marketing’, Journal of Competitiveness, vol. 6, no. 3, pp.49-62.

Soliman, HS 2011, ‘Customer relationship management and its relationship to the marketing performance’, International Journal of Business and Social Science, vol. 2, no. 10, pp.166-182.