A major element of failure has been the tendency to implement customer management ideas without first identifying the firm’s resources and its competitive strengths. Retailers need to spend time considering the following factors:
- What resources do they currently have?
- Is it necessary to make an investment?
- If yes, does it have a high ROI?
- What are the retailer’s competitive strengths?
- What steps need to be done?
- How can retailers take full advantage of their strengths when they implement those steps?
With this perspective, executives can come up with a strategic plan to approach the customer management initiative. Here are some featured tasks executives need to prioritise in the customer management process:
Write clear descriptions of ideal customers. Identify differences between one-time and repeat buyers, and then figure out what behaviors and attitudes by customers benefit the business. Particularly, retailers should answer these questions:
- What is the minimum revenue/profit that an ideal customer can generate each time?
- How many times does a buyer need to purchase to qualify as an ideal customer?
- What is the attitude of an ideal customer?
- What kind of product does each ideal customer usually purchase?
Leverage customer information and their purchasing history data. Set up a system that enables retailers to record customer information and access the centralised database anytime, anywhere. Information about customers’ adoptions, promotion participations, and product preferences may provide retailers with a more approximate level of customer characteristics.
Get closer—Collect customer feedback. Encourage customers to give feedback, and then listen to and analyse what they have to say to get a well-rounded perspective. The feedback may provide useful insights for better products and/or enhanced services.
Consider running a promotion programme. The overriding business requirement is to consistently gain profitable sales whilst achieving the budget and increasing customer satisfaction and the market share. To do so, it is important to set background prices at appropriate and viable levels to support marketing strategies and then to supplement demand with offers and promotional activities to achieve sales targets.
Increasing customer satisfaction and applying these strategic approaches is not an easy task. Find out more in the white paper “Customer management and its incremental demands on retailers” to understand more about top challenges that keep retailers from success.