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Tesco Customer Relationship Management Case Study

1041 Words5 Pages

Customer Relationship Management (CRM) is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers and is considered to be one of the most powerful tools in modern marketing strategy.
For the past decade, retail companies are facing more dynamic and intense competition due to increased globalisation and market saturation. Advantages such as the marketing mix are never long lasting and market dynamics are ever changing. As a result, retails companies have to keep their competitive advantage by better managing customer relations in order to survive and thrive.
This study has selected a popular retailer of the United Kingdom, Tesco. The objective of this study is to focus …show more content…

The need for adopting the right customer approach to improve customer satisfaction was when Tesco realised the importance of getting to know and understanding their customers. Tesco then collaborated with Dunnhumby, a marketing services company and implemented a customer loyalty program known as the ‘Tesco Club Program’, Tesco’s biggest customer initiative and the first focused CRM drive in 1995. The Tesco Club card was designed to focus entirely on the customer and to offer service benefits to the customer in a unique way. This initiative was inspired by the increasing popularity of such schemes in other parts of the world. Customers became members by opting into the program with a joining fee and had to provide personal details such as name, address, date of birth, e-mail, family composition, dietary requirements and personal preferences. Through the Club cards, information on areas like merchandising, pricing, customer services, promotions, customer acquisitions, media effectiveness, customer communications and market research have been generated. Furthermore, over 140,000 educational videos about the program to educate Tesco’s staff were distributed store-wide. These videos explained why the Tesco took up such an initiative, what the company expected to gain out of it, and why it was important for employees to participate whole-heartedly in the programme. Individual transactions by were captured, stored in a database and were linked to individual customer profiles. Tesco was then able to focus and target on individuals instead of targeting as a customer segment. According to Tesco (2012), millions of its customers are regularly receiving magazines catered to their lifestyles. Each magazine had a unique combination of advertisements, articles and latest news related to Tesco’s

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