RESEARCH PROJECT REPORT

ON
Customer Relationships Management in Retailing (CRM)

FORTUNE CONSULTANCY SERVICES

SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE
DEGREE OF
BACHELOR OF VOCATIONAL (RETAIL MANAGEMENT)

Submitted To: Submitted By:

Professor: Bawanpreet
Singh
Mr. Ratneshpal Singh Roll no: 2408
MATA GUJRI COLLEGE B.Voc (RM)
SRI.FATEHGARH SAHIB
 DECLARATION

Bawanpreet Singh, Roll no = 2408 Student of BACHELOR OF

VOCATIONAL (RETAIL MANAGMENT), MATA GUJRI
COLLEGE, SRI.FATEHGARH SAHIB. Hereby declare that the
project work entitled FORTUNE CONSULTANCY SERVICES is
an authenticated work carried out by me under the guidance of
Mr.Ratneshpal Singh for the partial fulfillment of the award of the
degree of BACHELOR OF VOCATIONAL (RETAIL
MANAGMENT)

Date:
Place:
(BAWANPREETSINGH)
 CERTIFICATE

TO WHOM IT MAY CONCERN

This is to certify that the Project Report entitled FORTUNE

CONSULTANCY SERVICES has been completed by
Mr.BAWANPREET SINGH under my supervision. To the best of my
knowledge, this is his own work and he has not submitted the same
elsewhere for the award of any other degree or diploma.

I approve it for submission in the partial fulfillment of the requirement

for the degree of BACHELOR OF VOCATIONAL (RETAIL
MANAGMENT

Mr.Ratneshpal Singh
 ACKNOWLEDGEME
NT

I would like to acknowledge the guidance and effort of Internship and

placement committee for arranging such a nice program for co-relating
theoretical learning with real life situation.
Its a pleasure to convey my heartiest gratitude and greeting to my honorable
supervisor Mr. Shamsu Uddin S hakib, Lecturer of Marketing, Department
of Business Administration, Leading University. Without his co-operation it
would have not been possible to prepare the report into a nice ending.

I would also like to acknowledge and thanks the following personnel who
has extended their whole-hearted co-operation for preparing the report.

Mr Md Foysal ahmed and Saleh Ahmed the owner of Saleh cloth store and
readymade corner for their kind guidance and support during my project
work.
Mr Khalil Ahmed the owner of Khalil Readymade and Mr Mintu the manager
of Alahi cloth for cordially helping in data collection and preparing my
project.
I am also owe to Mr Pervez Ahmed and Mo hi Uddin for earnest
co-operation.
Finally, I would like to convey my heartiest thanks and
gratitude to a ll of my teachers, friends, and many others who
extend their support to prepare the report.
 PREFACE

We shall be benefited of by our education if we can effectively apply the

institutional education in practical fields. Hence, we all need practica l
learning to apply theoretical knowledge in real world. This report is not only
a report but it is the reflection of my practical experience in retail market. I
tried to present here those things which I practically encountered and
closely observed in rea l market.

I tried my best to conduct effective study by collecting current data. Even

though if mistake appears, it is truly undesirable. So I would request to look at
the matter with merciful eyes.
 Executive
Summary

This report has been made with my practical knowledge of how retailers manage
customer relationships. Customers are the king in retail business and retailer acts as a
facilitator to fulfill the needs of their customer (king).

Retailers emphasize mainly on CRM to create loyal customer. Loyal customers are
the maximum profit generating source of retailer. C RM enable retailers to identify
their best customers and manage conflicting customer. Effective CRM implementation is
possible if all the units of a retailer act simultaneously to ensure better service and
satisfy customer uniquely. Proper allocation of resources and strategies to retain loyal
customer are integral part of CRM.
 PROJECT REPORT
ON
Customer Relationships Management in
Retailing
This report is submitted as the partial fulfillment of
BACHELOR OF VOCATIONAL (RETAIL MANAGEMENT)
Program
 CHAPTER I

COMPANY PROFILE
 COMPANY PROFILE

About

FORTUNE is leading strategic IT Company offering integrated IT solution.

FORTUNE is having rich experience managing global clients across various
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Our skilled team of professionals make sure that the product is developed as per
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component of the program's success. They are listed below.
 T ABLE OF CONTENTS

Title No Chapter 01-Scope,Objectives,Methodology P.N-01-

and 03
Limitations

1. Scope of the study 0

0 1
1. Significance of the study 0
1 1
1. Objecti ve of the study 0
2 1
1. Research Methodology 0
3 2
1. Limitations of the Report 0
4 3

Chapter 02 (Theoretical Framework) 04-12

2. Introduction 0
0 4
2. History of CRM 0
1 5
2. Why C ustomer Relationship Management? 0
2 6
2. Ways to keep customer for life 0
3 6
2. Things need to done for CRM 0
4 7
2. Key CRM pri nciples 0
5 8
2. CRM programs 0
6 9
2. Architecture of CRM 10-11
7
2. Tools needed for CRM 1
8 2

Chapter 03 (CRM in Retailing) 13-26

3. What is retai ling? 1

0 3
3. Necessity of CRM in retaili ng 1
1 3
3. How retailers benefitted by CRM 1
2 4
3. Satisfaction dri vers for building relationships in 15
3 retaili ng
3. Process of CRM in retailing 16-26
4
3. Collecting Customer data 16-17
5
3.5. Customer database 16-17
1
3.5. Approaches for collecting information 17
2
3. Analyzi ng customer data and identify target 18-20
6 customer
3.6. Data mining 18
1
3.6. Market basket analysis 18
2
3.6. Identifying market segment 18
3
3.6. Identifying best customers 18-20
4
3.6.4. Lifetime value 19
1
3.6.4. Customer pyramid 19
2
3.6.4. RFM (Recency, Frequency, Monetary)Analysis 20
3
3. Developing CRM programs 21-22
7
3.7. Retaining the best customers 21
1
3.7. Converting good customers into best customers 21-22
2
3.7. Dealing with unprofitable customers 22
3
3. Implementing CRM process in retailing 23-26
8
3.8. Critical success factor implementation of CRM in 24
1 retailing
3.8. Reasons for CRM implementation failure in 25
2 retailing
3.8. Suggestion for successful implementation of CRM 26
3 in
Retailing
3. Conclusion 26
9
3.1 References 27
0
1.0 Scope of the Study
The scope of this report is to analyze the customer relationship
management (CRM) in retailing (clothing business) from the stages of
collecting customer information to the successful implementation.

1.1 Significance of the study

The C RM (customer relationship management) is an integrated effort to

strengthen the network of relationship for the mutual benefit of both the
retailer and customer. The biggest management challenge in the new
millennium of liberalization and globalization for a business is to
maintain good relationship with the king the customer. This study is of
great significance because

A 5% increase in the customer retention will increase the profit up to

125%.
It costs five times more to attract a new customer than to serve an old
one.
20% of the companys loyal customers account for the 80% of its
revenues.
To study on customer relationship management has enabled me to
know about the
CRM practices adopted in the retail industry (clothing business).

1.2 Objectives of the study

To study the current practices of CRM in retailing.

To find out the impact of C RM on the profitability of the clothing
business.
To study the factors affecting the CRM practices.
To study the methods and tools for implementing CRM in retail
sector (clothing business)
To study the necessity of CRM in retail sector as well as
suggesting them the ways for successfully implementing it.
1.3 Research Methodology

A research design is simply a plan for study in collecting and analyzing the
data. It helps the researcher to conduct the study in an economical method
and relevant to the problem.
Research methodology is a systematic way to solve a research problem.

1.3.1 My research design for CRM analysis in retailing

The study conducted here is exp loratory and descriptive. I also closely
observed the retail market so observational technique played vital role in my
study.

1.3.2 Collection of the data

There are two types of data I collected for my study.

Pr ima r y dat a primary data is that data which is collected for the first time.
These data are basically observed and collected by the researcher for the first
time. I have collected primary data by asking questions.

Seconda r y data secondary data are those data which are primarily collected
by the ot her. I used secondary data to obtain structure of doing my study. I
also used existing literature to clarify CRM concept.

1.3.3 Data collection

Data is collected via using questionnaire
1.4 Limitations of Customer Relationship Management
By studying a few retail market it is hard to assume the overall C RM
policy used in retail industry.
Information gathered from retailers may not fully truthful because no
retailer shows their weakness.
Lack of retailer knowledge about modern C RM concept.
Time constraint is unavoidable limitation of my study.
As few works has been done earlier in this regard so scarcity of
secondary data is also there.
Inadequate disclosure of tactical information by retailer is also the
problem.
2.0 Introduction
The biggest management challenge in the new millennium of liberalization
and globalization for a business is to serve and maintain good relationship
with the king the customer. In the past producers took their customers for
granted, because at that time the customers were not demanding nor had
alternative source of supply or suppliers. But today there is a radical
transformation. The changing business environment is characterized by
economic liberalization, increasing competition, high consumer choice,
demanding customer, more emphasis on quality and value of purchase etc.

All these changes have made todays producer shift from traditional
marketing to modern marketing. Modern marketing calls for more than
developing a product, pricing it, promoting it and making it accessible to
target customer. It demands building trust, a binding force and value added
relationship with the customers.

Customer relationship management (CRM) is a business strategy to

acquire and manage the most valuable customer relationships. CRM
requires a customer-centric business philosophy and culture to
support efective marketing, sales and service processes. CRM
applications can enable efective customer relationship
management, provided that an enterprise has the right
leadership, strategy and culture.

The process of developing a cooperative and collaborative relationship

between the buyer and seller is called customer relationship management
shortly called C RM.
2.1 History of CRM

Customer Relationship Mana gement (CRM) is one of those

magnificent concepts that swept the business world in the 1990s with the
promise of forever changing the way businesses small and large interacted
with their customer bases.

In the beginning

The 1980s saw the emergence of database marketing, which was simply
a catch phrase to define the practice of setting up customer service groups
to speak individually to all of a companys customers.

Advances in the 1990s

In the 1990s companies began to improve on C ustomer Relationship

Management by making it more of a two-way street. Instead of simply
gathering data for their own use, they began giving back to their
customers not only in terms of the obvious goal of improved customer
service, but in incentives, gifts and other perks for customer loyalty.

True CRM comes of age

Real C ustomer Relationship Management as its thought of today.

Instead of feeding information into a static database for future
reference, C RM became a way to continuously update understanding
of customer needs and behavior. In recent years however, several
factors have contributed to the rapid development and evolution of
CRM. These include: -

The growing de- intermediation process

Advances in information technology
The growth in service economy.
The total quality movement.
Changing C ustomer expectations
Retaining customers is less expensive than acquiring new ones.
Necessity to have global account management for the customers.
2.2 Why customer relationship management?

A satisfied customer in 10 years will bring 100 more customers to the company.
It costs 5 times more to attract a new customer than to serve an old one. 20%
of the companys loyal customers account for 80% of its revenues. (Paretos
principle).
The chances of selling to an existing customer are 1 in 2, the chances of
selling to a new customer are 1 in 16.

2.3 Ways to keep customers for life

1. Every part of the companys marketing effort should be geared towards

building life timerelationships.

2. People want to do business with friendly people. To have effective

relations a friendly attitude must permeate in the organization.

3. Information technology developments should be positively used to serve

the customers.
4. The company should always be flexible to bend its rules and procedures
in the clients favor.
5. The company should communicate with its customers even when it is
not trying to sell something.

6. The company can communicate and develop stronger customer bonding

by providing financial and social benefits.

7. The company should try to know all its customers including their
lifestyles, hobbies, likes and dislikes etc.
8. The company should make it a point to deliver more than what is promised.
2.4 Things need to done for CRM

A good C RM program can improve customer service by facilitating

communication in several ways :

Provide product information, product use information, and technical

assistance that are accessible 24 hours a day, 7 days a week.
Identify how each individual customer defines quality, and then design a
service strategy for each customer based on these individual requirements and
expectations.
Provide a fast mechanism for managing and scheduling follow- up sales calls
to assess post-purchase cognitive dissonance, repurchase probabilities,
repurchase times, and repurchase frequencies.
Provide a mechanism to track all points of contact between a customer
and the company, and do it in an integrated way so that all sources and types
of contact are included, and all users of the system see the sa me view of
the customer (reduces confusion).
Help to identify potential problems quickly, before they occur.
Provide a user- friendly mechanism for registering customer complaints
(complaints that are not registered with the company cannot be resolved, and
are a major source of customer dissatisfaction).
Provide a fast mechanism for handling problems and complaints (complaints
that are resolved quickly can increase customer satisfaction).
Provide a fast mechanism for correcting service deficiencies (correct the
problem before other customers experience the same dissatisfaction).
Use internet cookies to track customer interests and personalize product
offerings accordingly. Use the Internet to engage in collaborative customization
or real-time customization. Provide a fast mechanism for managing and
scheduling maintenance, repair, and on- going support (improve efficiency and
effectiveness).The CRM program can be integrated into other cross- functional
systems and thereby provide accounting and production information to
customers when they want it.
2.5Key CRM principles

2.5.1 Differentiate Customers

All customers are not equal; recognize and reward best customers
disproportionately. Understanding each customer becomes particularly
important.
What CRM needs to understand while differentiating
customers is:
- Sensitivities, Tastes, Preferences and Personalities
- Lifestyle and age
- Culture Background and education
- Physical and psychological characteristics
2.5.2 Differentiating Offerings
Low value customer requiring high value customer ferings.
Low value customer with potential to become high value in near future
High value customer requiring high value service.

2.5.3 Keeping Existing Customers

Grading customers from very satisfied to very disappoint should help the
organization in improving its customer satisfaction levels and scores. As
the satisfaction level for each customer improves, so shall the customer
retention with the organization.

2.5.4 Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying
life stage and life event trigger points by customer,
marketers can maximize share of purchase potential.
2.5.4 Increase Loyalty
Loyal customers are more profitable. Any company will like its
mindshare status to improve from being a suspect to be ing an advocate.
Company has to invest in terms of its product and service offerings to its
customers.
2.6 CRM Programs

2.6.1 One-to-one Marketing

Meeting and satisfying each customers need uniquely and individually. In the
mass markets individualized information on customers is now possible at
low costs due to the rapid development in the information technology
and due to availability of scalable data warehouses and data mining
products. By using online information and databases on individual
customer interactions, marketers aim to fulfill the unique needs of each
mass- market customer. Information on individual customers is utilized
to develop frequency marketing, interactive marketing, and aftermar
keting programs in order to develop relationship with high- yielding
customers.
2.6.2 Continuity Marketing Programs

Take the shape of membership and loyalty card programs where

customers are often rewarded for their member and loyalty relationships
with the marketers. The basic premise of continuity marketing programs is to
retain customers and increase loyalty through long-term special services that
has a potential to increase mutual value through learning about each other.

2.6.3 Partnering
Programs
The third type of CRM programs is partnering relations hips between
customer and marketers to serve end user needs. In the mass markets, two
types of partnering programs are most common: co-branding and affinity
partnering.
2.7 Architecture of CRM

There are three parts of application architecture of C RM:

Operational - automation to the basic business processes (marketing, sales,
service)
Analytical - support to analyze customer behavior, implements business
intelligence alike technology
Collaborative - ensures the contact with customers (phone, email, fax, web,
sms, post ,in person)
2.7.1 Operational CRM

Operational CRM means supporting the "front office" business processes,

which include customer contact (sales, marketing and service). Operational
CRM provides the following benefits:
Delivers personalized and efficient marketing, sales, and service through
multi- channel collaboration.
Enables a 360-degree view of your customer while you are interacting with
them.
Sales people and service engineers can access complete history of all
customer interaction with your company, regardless of the touch point.
The operational part of CRM typically involves three general areas
of business:
3 Sales force automation (SFA)- SFA tools are designed to improve
field sales productivity. Key infrastructure requirements of SFA are mobile
synchronization and integrated product configuration.
4 Customer service and support (CSS) - CSS automates some service
requests, complaints, product returns, and information requests.
5 Enterprise marketing automation (EMA) - EMA provides information
about the business environment, including competitors, industry trends,
and macro-environmental variables
2.7.2 Analytical
CRM

In analytical C RM, data gathered within operational CRM and/or other

sources are analyzed to segment customers or to ide ntify potential to
enhance client relationship. Examples of Campaigns directed towards
customers are:

Acquisition: Cross-sell, up-sell

Retention: Retaining customers who leave due to maturity or attrition.
Information: Providing timely and regular information to customers.
Modification: Altering details of the transactional nature of
the customers' relationship.

Analysis of Customer data may relate to one or more of the

following analyses:

Contact channel optimization, Contact Optimization, C ustomer Acq uisition

/ Reactivation / Retention, C ustomer Segmentation, Customer Satisfaction
Measurement / Increase, Sales Coverage Optimization, Fraud Detection
and analysis, Financial Forecasts, Pricing Optimization, P roduct
Development, Program Evaluation, Risk Assessment and Management

Data collection and analysis is viewed as a continuing and iterative process.

Therefore, most successful analytical CRM projects take advantage of a data
warehouse to provide suitable data.
2.7.3 Collaborative
CRM

Collaborative C RM facilitates interactions with customers through all

channels (personal, letter, fax, phone, web, e-mail) and supports co-
ordination of employee teams and channels. It is a solution that brings
people, processes and data together so companies can better se rve and retain
their customers. The data/activities can be structured, unstructured,
conversational and/or transactional in nature. Collaborative C RM provides
the following benefits:

Enables efficient productive customer interactions across all

communications channels
Enables web collaboration to reduce customer service costs
Integrates call centers enabling multi-channel personal customer
interaction
Integrates view of the customer while interaction at the transaction level
2.8 Tools Needed for CRM

2.8.1 Customer
database
A good customer information system should consist of a regular flow
of information, systematic collection of information that is properly
evaluated and compared against different points in time, and it has sufficient
depth to understa nd the customer and accurately anticipate their behavioral
patterns in future. The customer database helps the company to plan,
implement, and monitor customer contact. C ustomer relationships are
increasingly sustained by information systems. Companies are increasingly
adding data from a variety of sources to their databases. C ustomer data
strategy should focus on processes to manage customer acquisition,
retention, and development.

2.8.2Data Mining for CRM: Some Relevant issues

Data mining is an important enabler for CRM. Advances in data storage
and processing technologies have made it possible today to store very
large amounts of data in what are called data warehouses and then use data
mining tools to extract relevant information. Data mining helps in the process
of understanding a customer by providing the necessary information and
facilitates informed decision-making.
3.0 What is retailing?
Retailing is the business activity that involves selling products/services to
custo mers for their non-commercial, individual or family use. Normally,
retailing is the final stage of the distribution process.
CRM (Customer Relationship Management) in retailing aids to increase
efficiency, serves to aid the sales unit in all of its efforts, manages to boost
sales, and fundamentally contributes to the overall development of the
business. It also manages to work towards organizational goals. This is
achieved through a concise study of potential customers.
Their preferences are taken into consideration and used to coordinate and
implement a customer centric business strategy that focuses primarily on the
customer, yields to recording the importance of his ideas and suggestions and
results in increased customer retention.
3.1 Necessity of CRM in retailing
Retailer use CRM concept to the following reasons that I mainly
found from my observation:-

To know their customers needs and wants in c ustomized way.(S hopkeepers

put in mind what their loyal custo mer seek from them and what are
the tastes and preferences of a particular customer)
To deliver the desired products quickly in the hands of their customer
(call the customer when a desired prod uct reached in shop or sometimes send
it to customers)
I also found when any new products or design come in shop retailers
inform it to specific customer, sometimes they inform customer about if any
products price falls or any discount is available (for promotional activities)
By applying CRM concept a retailer can know who most profitable customer
and who is less profitable and thus can maintain relation with those who
provides best value.
By continuously maintaining communication with customer retailer ca n
know their changing demands and can bring the innovative products.
3.2 How retailer benefited by CRM

If a retailer becomes able to maintain strong relationship with customer

then it generate a numbers of benefit for them which includes:-
Retailer can generate maximum sales by repetitive purchase of loyal
customer.
By uniquely delivering the desired products they can best meet
the needs and requirements of their customer.
Greater sales ensure maximum profit level.
Whenever loyal customer frequently visit the store that time retailer
can infirm them about other additional products and sell it (cross-
selling).
By applying C RM concept retailer can ensure customer satisfaction
which then leads to positive word of mouth communication and thus
retailer reputation and new customer base increase.
By using C RM concept retailer can protect customer in competition
loyal customer
stay close to retailer even if they dont get appropriate products or
service because ofrelation)
 3.3 Top satisfaction drivers for building strong
relationships in Retailing

In order to satisfy a customer and retain them longer time a retailer must need
to know what customer are seeking from retailer. What drives for their
satisfaction? I analyzed following factors that a customer a lways emphasize:-
Person-to-person experience the store has helpful, friendly,
knowledgeable employees who anticipate customer needs and exceed customer
expectations.
Store experience the store is cleaned, well-designed, organized, adequately
stocked with quality merchandise and provides "fun" experiences.
Price and value the price that customers pay for goods is matched by the
perceived value that they receive for making the purchase.
Marketing and communications the store's promotions are well-
communicated, easy to redeem and valuable to customers.
Data integration and analytics the store provides the same product
selection and product Information across all sales channels, and uses
information from a consumer's past purchases to provide better service.
To build enduring customer relationships, retailers also need to provide
shopping experiences that are consistent with consumer desires and
expectations. Things that are needed to ensure shopping experience are:-
Ease-of-use Shopping is hassle- free; the retailer makes the customer
feel welcome; the
retailer meets all customer expectations.
Strong association Retailer is top-of-mind; the customer feels good
recommending the retailer to family and friends; the customer fee ls that
the retailer provides the best value compared to competitors.
Self-esteem Shopping gives the customer a sense of familiarity; the
customer believes
shopping reflects their good judgment; shopping makes the customer feel like
they "fit in."
Price relationship The customer enjoys taking advantage of special offers
and low prices.
3.4 Process of CRM in retailing
CRM is an iterative process that turns customer data into customer loyalty
through different types of activities. Levy and Weitz described C RM in
retailing through a systematic process-

I analyzed the retail market and C RM in retailing (clothing business).This

report is described on the basis of this model. I tried to describe the applied C
RM in retailing business.
The process of C RM in retailing is thus described below sequentially-

3.5 Collecting customer data

The first step of CRM is constructing a customer database. This database is

referred to as a customer data warehouse, contains all the information the
firm has collected about its customers and is the foundation for subsequent
C RM activities.
3.5.1 Customer Database
Ideally the database contains the following
information:

Histories of purchases-retailer keep the information of the purchases made

by particular customer. This information helps retailer to know about
customer.
Customer contact-I found that almost every retailer keep the information of
customer in order to make future communication. Usually retailers seek
customer address and phone numbers.

Customer preferences-retailer keeps information of customer preferences and

choices. F rom my study I found that retailer keep enough information about
customer selection of cloths, the regional preferences of cloths, information
of customer preferences of quality and design. Based on these preferences
retailers often contact with customer whenever a new design or changing
pattern comes in market.

3.5.2 Approaches for collecting information

Asking for information-In general I saw retailer ask customer to provide their
address and contact number whenever they make purchase.

Using frequent shopper card and credit card information-This is often used by
branded retail chain store to collect information whenever a customer enroll
in a loyalty program by giving descriptive informatio n about him or retailer
collect information from credit card transaction used by customer. Though I
have not found any retailers use these types of collecting information in
my territory.
3.6 Analyzing customer data and Identifying target
cu s t o m e r s
This is second step of CRM process in retailing. By analyzing customer database
and using the information retailers develop programs for building customer
loyalty.

Following are the techniques retailer use to analyze

customer-
3.6.1 Data mining
Data mining is the technique that retailer use to understand their customer buying
pattern and helps them for decision making.

I found many retailers use their large data wareho use to put enough
information about customer then use data mining technique to extract the relevant
information which is valuable to serve specific customer.

3.6.2 Market basket analysis

Market basket analysis is a specific type of data analysis that focuses on

composition of basket or products purchased by a customer during a shopping
occasion.
I observed that all retailer follow what item customer usually buy in a shopping
and they do so to arrange their merchandize in a way so that customer find their
desired products when they next time come in purchase.
3.6.3 Identifying market segments

Customer data analysis is also essential for market segmenting. I observed that
retailer on the basis of data mining and basket analysis makes a perception about
customer purchase. It then helps retailer to adopt specific policy for satisfying
group of customer needs who purchase similar merchandize

3.6.4 Identifying best Customers

Using information in the customer database retailers can develop a score or

numbers indicating how valuable they are to them. Best customers are determined
by-3.6.4.1 Lifetime value
Lifetime value is the expected contribution from the customer to the retailers
profits over his or her entire relationship with retailer.
Most of the retailer responded to me that they estimate lifetime value by
analyzing customer past purchase, gross margin from these purchases and
costs they spend to get this customer. Costs include their advertising and
promotional efforts to acquire customer.
By analyzing LTV retailer believes that a customer who make the purchase
pattern in past will continue same pattern in future.

3.6.4.2 Customer pyramid

A commonly used segmentation of customer is using pyramid approach.
Which is shown below:-

This scheme allows retailers to develop more appropriate strategies for each
group of the segments.
Platinum segments-I asked retailers about their platinum customers. They
responded they regard platinum customer those who make their most purchase
and liable for greater profit. They treat these customers with much care and
exclusive service. P latinum customer also become loyal to customer and
become less price sensitive because of good relation. Retailer often refers their
key customer as Platinum
Gold-They are not as loyal as platinum. Though they make significant
purchase from retailer but they are price sensitive and so they visits many
store. I observed this type of customer who actually cant fully rely on a
particular retailer rather they seek for suitable offerings from competitors.
Some of them directly blame close retailers if they get fewer prices to
other.

Iron-They have modest LTV to retailer so much attention is not given to this
category. I see retailer provide value if purchase is made and try to motivate
for repurchase.

Lead-They are irritating customers who actually do not purchase but go

shop to show merchandize. I saw many customers of this category in my
clothing business.

3.6.4.3 RFM (Recency, Frequency, Monetary)

Analysis

Recency refers how recent a purchase is made. Frequency means how

frequent customer purchases and monetary refers how much they have
bought.

I observed from my research retailer give priority to those customers who

make frequent purchase or purchase in greater volume than those who comes
seasonally and less frequently. Retailers also weight value based on these
criteria.
3.7 Developing CRM programs
In this section I would like to describe the strategies or programs retailers
use to maintain
CRM in retailing.

3.7.1 Retaining the best customer (customer

retention)

Following are the strategies that I found retailer use to reta in their
best customer:-

Providing incentives or discounts-most of the retailer I found offer

discounted price or incentives to their loyal customer. During my
observation I saw many customers come from long distance to get incentives
on their purchases.

Special customer service-Retailers provide unusual high quality service to

retain their best customers. I saw retailers offer drinks, tea or foods to
greet their loyal customers. Other service includes quick complain solving,
keep or replacing returned item, assigning special salesperson to serve loyal
customer etc.

Personalization -By using information collected about customer retailers

now can meet the customer needs uniquely and in customized way. I saw
most of retailer keep some items for only loyal c ustomer. Sometimes
retailer keeps order with desired requirements and then serves those
products to satisfy their unique needs. In clothing business this strategy highly
applied.

Informal communications-I seen this policy highly applied by clothing

retailer. They often talk informally with loyal customers and keep
relationships alive.
3.7.2 Conve rting good customers into best
customers

I previously highlighted about customer pyramid .By this strategy retailers

try to convert good and iron into platinum. Retailer follows two approaches to
do this-

Cross selling selling a complementary product in a specific transaction. I

saw some retailers urges for purchasing a tie when a customer buy a shirt.
Some other pursues to sell perfumes and apparels with the main products.

Add-on selling-By this approach a retailer try to sell additional products with
main products. Many retailer I seen try to pursue customer to sell new
products and latest offering or arrangements with the traditional products.
3.7.3 Dealing with unprofitable
customer
All customers are not equally profitable. Some customers always create
problem. The return of sold product, complaining unnecessarily, demands for
most costly activities are problem created by such customers. I asked retailer
how the y manage these unprofitable customers, they replied:-

We offer less services and efforts to meet the needs of these customers.
Seek price for costly services and do not provide discounted price or
promotions as to deduct them.
3.8 Implementing CRM process in retailing

The implementation of a customer relationship management (CRM) solution

is best treated as a six-stage process, moving from collecting information
about your customers and processing it to using that information to improve
mark eting and the customer experience. I here would like to describe how
retailers (in clothing business) actually go through these steps when they
implement C RM in their business:
Stage one Collecting information
As I discussed earlier that every retailers need to have a customer database
where they keep necessary information about customer. I saw retailer
mainly use these information to categorize and segment the customer with
different needs and requirements.

Stage two - Storing information

Only collecting information is not enough to implement CRM. From my
study I saw retailer keep the customer information for longer time in order to
communicate in future. Whenever any address or contact number is changed it
requires to update promptly.
Stage three - Accessing information
Accessing information means using information to make connection. Most of
the retailer call to their customer and provide information about their
products even it is not asked by customer.
Stage four - Analyzing customer
behavior
All customers not seek same service. I observed customer needs and
requirements are different and the reasons for choosing retailer also differ
across their perception. Retailers actually analyze these diverse customers by
using data mining or by dealing longer t ime.
 Stage five - Marketing more effectively

Marketing effectively to inform and pursue customer is another step of

retailer to manage customers relationship, I observed retailer continuously
inform their loyal customer base whenever any new trends comes or if they
offer any promotional package.

Stage six - Enhancing the customer experience

Enhancing customer experience is required to manage customer problems

quickly. Most of experienced retailer I seen having the ability to understand
customer through a s ingle look. These retailers can easily handle when any
complain arises.
3.8.1 Critical Success Factors for Implementation of CRM in retailing
Critical success factors are those elements which responsible for successfully
imp lementing the CRM in retailing. The key CSF for CRM in retailing are:

Collaborative efforts-A successful CRM requires close coordination from all

departments. A retailer needs to manage all the employees such as sales team,
media, and finance authority coordination. Sufficient Resources
In successful retailing a retailer must have clever and experienced
personnel, good physical evidence, and sufficient stock. I saw customer switch
to other retailer if the shop have lack of decoration, insufficient inventory or
fewer assortments
Clearly Defined Objective
There must be a promise to ensure CRM. Retailer often set specific objectives
and then act to achieve these objectives.
Managing Change
Products of retailers change time to time. Especially in clothing business I saw
changing of design and price are in a dramatic way. So retailers must need
to cope with these changes to service customer better.
3.8.2 Reasons for CRM Implementation Failure in
retailing

An understanding of the challenges and critical success factors is paramount

to C RM success. The main reason for C RM failures in retailing includes :
Customer focus
Many retailers have lace of customer focus. Rather than emphasizing on
customer I found many of retailers just rely on selling products and generating
profits.
Weak Management
In retailing most of shopper have lack of training on CRM, lack of CRM
understanding, lack of communications and changing business trends analysis.
CRM Project Management
There is misalignment between C RM project and business requirements, with
unrealistic goals, timelines, coupled with a lack of planning and insufficient
reporting and control.

Team Members
There is lack of support, incentives, and lack of technical knowledge among
salesperson to satisfy customer needs.
Data & Warehouse Requirements
Most of retailers have poor quality data, inconsistent data warehousing
system and lacking of updating data timely.

CRM in retail is failing because the correct capabilities are not being built at
the enterprise level. The requisite changes in retailer culture, behavior and
attitude are not being implemented properly to ensure CRM in retailing.
3.8.3 Suggestions for successful CRM imple mentation in Retailing

There should be more and more emphasis given by the retailer for
satisfying the customer up to a apex limit and by providing the util ity
of every penny of money a customer spend to buy it.
There should be more use of information technology to collect
information timely.
The retailer should be flexible to bend its rules and procedures in the
customers favor.
If any customer intention is assumed for not buying than manage him
cordially rather showing negligence.
The retailer needs to focus on informal relationships and
communications with customers.
Retailers need to develop training programs to understand C RM
process and serve customer better.
Retailer must need to know what the drivers for customer
satisfaction and
dissatisfaction are.
All the employees must need to cooperate with each other for the success
of CRM.

3.9 Conclusion

CRM is basically the collection and distribution of all data to all areas
of business. The data can then help market the company, help up sell to
existing customer, understand customers better so that customers can be
given better service and allows them to interact with the retailer by whatever
means they wish. Customer Relationships are achieved by the retailer
working together to give customers what they really want. C RM is a business
strategy to create and sustain long-term, profitable customer relationships. By
ensuring effective CRM process in retail store a retailer not only benefitted by
greater sales and profitability but also can build a strong store image relative
to competitor.
3.10 References
1. Michael Levy, and Barton A Weitz. (2003), Retailing
Management (5th Edition), New Delhi: Tata
McGraw-Hill.Ch-11, pp.335-360
2. Daffy, C. (1999), "Once a customer, alw ays a customer", New Delhi:
HarperCo llins.

3. Liljand er, V. and Roos I. (2002), "Customer relationship levels: From

spurious to true relationships",
Journal of Services Marketing, Vol. 16 No.7, pp. 593-614.

4. http://retail.about.com/od/glossary/g/CRM.htm -
Retrieved on 5th February 2011 at 9.35 p. m

5. en.wikipedia.org/wiki/Retail-Retrieved on 4th February

2011 at 10.55 p. m

6.http://www.google .com.bd/search?
hl=bn&noj=1&gbv=2&biw=1024&bi h=667&tbm=i sch
&sa=1&q
=CRM+i n+retaili ng&oq=CRM+i n+retail ing&aq=f&aqi
=&aql=&gs_sm=s&gs_upl=38460l 41547l 0l 43208
l 7l 7l 0l 0l 0l 0l 876l1542l 5-1.1l2l0
7.http://www.googl e.com.bd/search?
q=CRM+i n+retailing&hl =bn&noj=1&gbv=2&biw=102
4&bih=66
7&source=l nms&ei =u3ExT6LUJ9DwrQeQ69G8BA&sa
=X&oi =mode_li nk&ct=mode&cd=1&ved=0CDA
Q_AUoAA
 About this questionnaire

Dear S ir,
This is Jakaria Ahmed, a student of MBA, Leading University, Sylhet. I am at
the end of my study but to fully complete my MBA I need to submit a
project report. My project report is based on Customer relationship
management in retailing (clothing business).For this purpose I have came in
field to collect data and analyze practical situation.
I hereby come to you with a questionnaire. I hope you will be kind enough to
cooperate with me to complete my study.
I assure you that no data will be disclosed to third party without your prior
permission. In addition, this report may help you to effectively use C RM
concept in your store.

With best regards

Dewan Jakaria
Ahmed ID-
1101010735
MBA, Dept of Business Administration
Leading University
Sylhet
 Questionnaire for CRM in Retailing

1. Have you ever heard about C ustomer relationship Management concept?

a)
Yes
b) No
2. From you viewpoint how you define C RM?

3. Are your customers needs clearly defined?
a) Yes b) No
4. Do you have any customer database for collecting data about
customer?
a) Yes b) No
5. What type of information do you keep in your database?
................
6. How you classify of segment your customer?
.
7. How you determine your best customer?
..
8. What are the CRM programs you have?
.
9. Do you conduct customer satisfaction surveys?

a) Yes b) No

10. Do you communicate results of your customer satisfaction surveys

regularly throughout the company?

a) Yes b) No
11. Do you actively seek out customer comments and complaints?
a) Yes b) No

12. How do you get customer comments and complaints?

a) Face to face interview.
b) Toll free numbers, formal
surveys. c) Others means

13. How do you get information about the customers?

a) Face to face interviews b) Surveys.
c) Any other means.
14. Do you give concessions to your regular cus tomer?
a) Yes b) No
11. Do you take feedback from your customers?
a) Yes b) No
12. Do you customize your product or services according to the customer?
a) Yes b) No
13. Do you have a concept of internal service?
a) Yes. b) No.
14. Do you communicate with your customers frequently?
a) Yes. b) No.
15. Do you regularly review the business process to eliminate non value-
adding activities and improve customer satisfaction?
a) Yes b) No.
16. Is the working environment is conducive to the well-being and morale of
all employees?
a) Yes b) No.
17. Is there commitment from top management to support the customer-
focused service concept?
a) Yes b) No

18. Is there any improvement in average sale per customer?

a) Yes b) No

19. Is there any improvement in customer response rate to the marketing

activities?
a) Yes b) No

20. Is there any improvement in customer retention and loyalty?

a) Yes

21. What are your strategies to retain loyal customer?

20. How do you implement CRM in your retail outlet?

23. Do you consider any factors for success and failure of C RM? If Yes,
then, what are these?

a) Yes b) No

Respondents Name and

Signature
.