Customer Relationship Management Assignment

Ans1) The term ‘loyalty’ is associated with, among other things, (collective) savings schemes
which are linked to a database containing information on the name, address, city, certain behavior
and background information for individual customers. The success of the programme lies in
providing customers with specific rewards. The intention is to reward loyal, frequent buyers more
often. The distinction is made between good and bad customers with the aid of behavior
registration.

Below are the two programs I have experiences, explaining their features and scope of
improvement.

1) Amazon Prime: Amazon Prime is not seen by most people as a loyalty program. Indeed,
it's one of the best loyalty programs there is. Find below its outstanding features you can get
by paying Rs999 per year for Amazon Prime:

 Free shipping for whole year, not just limited to free shipping in certain areas one
can get a 1 day or a free same day shipping

 Prime Membership Sharing – Not just you but four others can also take advantage
of your shipping benefits without giving them direct access to your account. The
only rule is that you have to live at the same address as these people. Or, in other
words, it is only possible to share membership with actual members of the same
household.

 Unlimited Photo Storage - With Amazon storage, all Amazon customers begin
with 5 GB of free data storage. This includes everything from pictures to videos,
documents to music files, and anything else that you might want to store on it. As a
member of Amazon Prime, your free cloud storage plan is expanded and as part of
the Prime Photos program you can store unlimited photo files.

 Ad-Free Video Streaming (Prime Video) – Prime video is the top contender for its
competitors like Netflix. Prime video is packed with TV shows, documentaries and
movies in various languages ranging from classic to modern hits. This all power
pack entertainment is ad-free.

 Ad-Free Music Streaming - While in Prime Video there is a lot of entertainment

value, it is not Amazon's only streaming service. If you listen to a lot of streams of
online music, Prime Music will upside down your world. Amazon Prime Music
provides unlimited, ad-free access to a song library with more than 2 million tracks
stored. You can stream them to different devices, but you can also download songs
for offline listening to your phone or tablet.

Amazon Prime is built into the life of its customers. The benefits can far exceed the annual fee for
the person who takes full advantage of the Amazon Prime membership. And the customer will buy
more frequently from Amazon as a result of paying for a membership.

Scope of Improvement of Amazon Prime: With multiple loyalty programs, Amazon confuses
customers: Amazon has two types of loyalty programs: Amazon Prime and Amazon with points.
This is an association with other point providers where they can make purchases on Amazon using
those points. Amazon offers points directly via credit or debit cards. Having two different programs
can create a great deal of ambiguity — especially if both of the programs are hit. Amazon could
easily combine Prime with a program based on points to make something superefficient.
 2) Zomato Gold: Want to eat any dish that seems so delicious and tempting, but then hold
back because it's too expensive? This is where Zomato Gold membership come into picture
where you can order any dish free of charge throughout the menu. Zomato Gold is basically
a membership program that allows consumers to make exclusive deals at Gold tagged
restaurants, bars, lounges throughout the country. Zomato Gold membership subscription
will also enable the consumer to order any two complimentary (alcoholic and non-
alcoholic) drinks.

With more than 3,500 restaurants in India, Zomato has partnered to offer Gold membership
benefits. All you need to do is go out and explore various restaurants and enjoy at no cost a
complimentary dish and drinks. This membership program has amazing advantages. I have
listed here some of the major benefits you will gain from your Gold subscription plan.

 If you plan to meet your social drinks circle then visit any pub or bar that falls under
the umbrella of the Zomato Gold restaurant and you can enjoy two complimentary
drinks at any cost free of charge.

 The membership offers extra benefits such as invitations to restaurants and special
events. Such events include wine-tasting sessions, new try-out menu sessions, food
walks, special cook sessions, launch of new restaurants, and more.

 Consumers will receive benefits such as a 1 + 1 dish offer where the user will get
another one free of charge when ordering one dish. There are also 2 + 2 drinks
advantages, where users can order 2 other drinks free of charge.

Scope of Improvement for Zomato Gold:

 Change in policy: Users should be notified early before implementing a new policy
regarding refunds or cashbacks. A previous notice about this update would have helped
subscribers decide whether or not to renew their memberships.

 Limits usage: Users are only provided with limited restaurants options and can order
selective dishes. Also, there’s a cap on the drinks.

Ans2) Customer lifetime value is a primary measure to understand your customers. To be more
precise, the value your relationship with a customer can bring to your business is predicted.

This approach helps organizations demonstrate the future value of their marketing initiatives that
they can generate. That's why your investment evaluation should be based on long-term profits
instead of short-term wins. Focusing on CLV allows you to design a more concise budget planning
strategy that is efficient. Your customers aren't the same, in the sense that some make more income
than others.

So knowing which ones you should first focus on and invest in is crucial. And it's no secret that it's
cheaper to retain a happy customer than to get a new one.

Because you can't be sure how long this relationship will last, you can estimate it as a periodic
value and state CLV. It can be set for different time frames depending on your business, but it is
usually set for 12 or 24 months

For a variety of reasons, CLV is important. First, it can act as a benchmark for growth and
expansion in the future. It's also a great way to help determine the value of your business if you
want to borrow money, seek out funding, or sell your business. You can also tweak the calculations
to determine the gross margin, costs, and other metrics of a customer's lifetime by replacing them
(on an average basis) instead of the average order value. More broadly, CLV shows the importance
of repeating business and can help you to shift your priorities accordingly. While acquiring new
customers is nice, it is often more important to get current customers to buy more from you;
moreover, these customers tend to require lower costs and generally produce higher ratings of
customer satisfaction.

It is therefore essential that every entrepreneur and business owner who has been in business for
any significant length of time evaluate the value of customer life as a key component of their
strategy for small business. Otherwise, how do you know the long-term value of your business?
Ultimately, consumers who keep returning to your brand will spend more, generating more revenue
for you. If you're satisfied, these customers will also help you grow your business by
recommending your brand through word of mouth to friends, family and loved ones–an advertising
method that doesn't cost you extra.

Examples of brands leveraging the concept of Customer Life time Value:

There are several avenues that your brand can take, including starting a loyalty program, investing
in email campaigns, and launching targeted remarketing advertisements that will appear before
your loyal customers even if they are not on your website. Few brand examples are mentioned
below:

 NetFlix: An average subscriber to Netflix stays 25 months on board. Netflix says a Netflix
customer's lifetime value is $291.25. Netflix knows customers are impatient and some
customers cancel because they don't like waiting to receive movies in the mail. Because of
this, they have added a feature that allows you to stream movies on the web, not only
satisfying your urge to film, but keeping you busy while you're waiting. Netflix has reduced
its churn to 4 percent by tracking these stats and behaviors.

 Starbucks: Increasing customer satisfaction is one of the most effective ways to boost
Customer Lifetime Value (CLV). Bain & Co found a 5% increase in customer satisfaction
that can rise from 25% to 95%. The same study shows that acquiring a new customer costs
6 to 7 times more than maintaining an existing one. Customer satisfaction of Starbucks was
reported to be as high as 89 %. Starbucks ' Customer Lifetime Value was calculated at
$14,099 due to high customer satisfaction.

 Amazon: Consumer Intelligence Research Partners estimates that Amazon Kindle owners
spend about $1,233 per year on Amazon purchasing stuff compared to $790 per year on
other customers. Amazon is therefore paying close attention to Customer Lifetime Value
(CLV). Amazon Prime was developed to enable Amazon to compete on price efficiently
and increase the value of customer life. Amazon Prime members are spending $1,340
annually, according to a 2013 study by the Consumer Intelligence Research Partners. And
it's been 3 years ago. It's now more. Amazon knows how to make the most of its most
profitable customer segments by applying Customer Lifestyle Value (CLV) to Amazon
Prime's development.

 CROCS: CROC’S approach to marketing has always been data-driven, customer-centric.

When the marketing team has a mandate to transform the online business of Crocs by
becoming less dependent on promotions and discounts, the team is excited about the
opportunity to improve the profitability of Crocs. The team tests to optimize promotions
aimed at customers predicted to churn, and expands programs to coordinate on-site, email
and display "no discount" experience for customers with the lowest price sensitivity. Crocs
performs revenue lifts of 10X and 2X.

 Bonobos: Is a leading men's apparel brand driven by e-commerce focused on delivering

great fit, a fun style approach, and great customer experience. Bonobos was always a
 customer-focused, data-driven retailer. Bonobos has service-oriented e-commerce stores
with Guideshops that allow men to try out Bonobos clothing in person before ordering
online. Bonobos discovers that throughout its marketing channels, Guideshops brings
customers with the highest lifetime value. Insights into which channels attract highest value
shoppers from Bonobos have helped Bonobos to increase its new customers ' predicted
lifetime value by 20 percent.

Ans 3a) Following aspects are imperative to the success of a site design:

 Clearly Define Your Goals: While we should always start a web or marketing project with
goals, with our website we must consider ourselves as well as the user.
Only when we make sure we have what our target audience wants and can deliver it to them
in a satisfactory way can the site generate traffic, leads and sales. It should be easy to set
goals for both your organization and your user. If the goals are not aligned, then you're
probably going to have a problem where you're going to try to make profits and yet can't
deliver the product and experience your audience is looking for. It's painful to invest time
and money in a site to learn that everyone is bouncing and that nobody wants or
understands why they should buy from you as you focused too much on your end goals and
not theirs.

 Earn the Trust of Your Audience: In what you offer and what you want your audience to
do, be clear and transparent. Know what motivates them and how strong you are. Too often
websites lack the connections of emotion or credibility necessary to earn trust and sale.
Ecommerce sites are a prime example that I often see lacking a substantiated About Us
page. Users want to know with whom they're doing business and not just another space
commodity site. If you cannot put on your website names, pictures, culture, philosophy, or
some kind of story, you will lack the ability to state what you are about.

 Find Ways to Stand Out: You can still use a template for the website and look different.
You can stand out by customizing images and styles that tailor them to your brand. When
you tell your story and create factors such as price, quality, customer service, what you do
with profits, how you return, etc., you create the bond you need to stand out from the rest of
the templated sites that sell the same products or services.

 Focus on Usability & User Experience: Make it easy to get to the content you want for
your audience. Make sure that users can access the desired page with as few clicks as
possible for products or services. In addition to having intuitive main menu navigation
optimized for mobile and desktop experiences, consider placing your search box and other
indications in order to reach popular content.

 Use Your Analytics: Another that seems like a given, but goes beyond just installing on
your site Google Analytics. You need demographics information, goal finishes, and more
that you can't get unless you take a few quick steps to set them up. At the very least, after
customizing it, set up some reports and alerts that automatically come to you so you have
the pulse of what's working and what's not and can adjust on the fly instead of reacting
when it's too late.

 Make Sure the Website Works All the Time: When it comes to making sure our websites
work, Uptime is often all we think about. However, without the right protocols in place, you
may not notice issues like JavaScript not firing, buttons not working, a browser-specific
bug, or mobile experience problems. You may miss that a segment of your audience is
hitting a roadblock by just looking at sales data and monitoring uptime. Many users will not
seek you out and contact you when they are unable to buy or are unable to get to the content
they want –they just leave. Make sure your code is tested as functional and cross-browser.
Ans 3b) Payment gateway: In order to be able to process the transaction, a decision will have to
be made about payment systems. True clarity on the best Internet payment system is still lacking.
For the time being, most payments in the business-to-business market proceed in the same manner
as they did previously, and in consumer markets, credit cards and giro slip payments are used. In
classifying Internet payment options, the moment of payment is crucial. This moment can occur
before, during or after the transaction, during which e-commerce companies usually offer the
customer a choice of the following:
 Pay before: the buyer pays with e-money from an open electronic wallet that must be
replenished prior to the purchase transaction. Examples include e-cash and Millicent.

 Pay now: during the purchase transaction, the buyer will gain direct access to his or her
bank account balance. This occurs for example with PIN payments, authorizations and
COD payments.

 Pay later: after the completion of the transaction, the payment will be deducted from the
buyer’s bank or giro account. This occurs, for example, with credit card transactions and
giro slip payments.

Credit systems: Credit payment systems are the most popular. Most Internet transactions take
place using a credit card. The customer keys in the number of the credit card and the expiry date
and a purchase transaction may be initiated. Still, the lack of security makes people jittery when it
comes to using this form of payment. In contrast to the traditional credit card transaction in the
physical world, the possibility of verifying the authenticity of the cardholder is lacking in the
virtual world. The credit card is missing, as is a signature. The openness of the web makes it
possible to intercept credit card data. Two methods, with different protocols, have been developed
to make credit card transactions safer, namely: Secure Sockets Layer (SSL) and Secure Electronic
Transaction (SET).

Debit payment systems: With debit payment systems, the purchase may be charged directly to the
account during the transaction process. After installation of the software, the buyer of a product has
access to a consumer wallet. This wallet may contain data about one or more credit cards as well as
data for a debit card. With the corresponding certificate from the bank, payments may be charged
directly to the buyer’s bank account. The e-commerce company will also have software (with SET)
installed to support the buyer’s payment. During payment, a hardware token is used to verify the
account holder’s authenticity.

Electronic wallet systems: Smart cards (a pre-payment facility available to debit card holders) are
examples of an electronic wallet system. These open electronic payment systems are primarily
suitable for payments of smaller amounts and help speed up the payment. The buyer must have a
secure smartcard reader with corresponding software in order to be able to perform online
payments. With this system, another barrier to the penetration of this payment form online has been
removed.