Customer Relationship Management Analysis

This assignment examines the relationship between customer service and customer relationship management (CRM) within the luxury fashion brand Versace. It requires a detailed analysis of Versace’s customer service strategies, including their use of technology, engagement tactics, and overall approach to building customer relationships. The goal is to evaluate how effectively Versace utilizes these strategies to foster loyalty and enhance its CRM initiatives.

Running head: CUSTOMER SERVICE MANAGEMENT
Customer service management
Name of Student
Name of University
Author Note

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Executive summary
The report is based on the importance of managing customer service. The manner in
which every business organisation develops customer service is analysed in the
report. For the purpose of the report, two companies have been analysed belonging
to the fashion industry. The companies include Versace and Chanel. These
companies are reputed worldwide and have varied customer service policies. Both
the companies aim at profit-making objective along with satisfying customers. Based
on these, recommendations are stated that highlight the introduction of online
shopping in Versace and improving customer service plan in Chanel.

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Table of Contents
Description of the shops..............................................................................................3
Summary of the customer service practice.................................................................3
Analysing customer service practice...........................................................................7
Discussing abilities to communicate with customers...................................................8
Recommendation........................................................................................................9
Bibliography.............................................................................................................. 11
Appendices............................................................................................................... 13
Appendix 1.............................................................................................................13
Appendix 2.............................................................................................................13

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Description of the shops
Versace is a luxury shop located in Italy luxury fashion brand that was
established in 1978. The company was founded by Gianni Versace. It is a private
industry of customer goods that is dedicated to manufacturing luxurious and
fashionable wardrobes for the customers. Some of the products of the shop include
leather accessories, ready-to-wear Italian wardrobes and so on. The headquarters of
the shop is located in Milan, Italy. The company owns about 500 employees and
earned revenue of EU€645 million in the past year. In 2006, the company entered
into a partnership with Automobili Lamborghini S.p.A. in order to produce the car with
satin interiors. It also entered into a partnership with the Mind Group China in order
to design luxury residence towers (Versace.com, 2017).
(Refer to appendix 1 for picture of Versace)
Chanel is a private company located in Paris, France. The company was set
up in 1909 by Coco Chanel. Over the years, the company have gained a reputation
as one of the leading companies in the fashion industry in France. The company
specialises in manufacturing haute couture along with ready to wear clothes and
luxury goods like perfume and jewellery. The biggest advantage of the company is
that it is famous all over the world. Reports indicate the number of employees in
Chanel is about 1270 with revenue of up to $5.2billion. The company manufacturers
all type of clothes keeping in mind the requirement of the customers (Chanel.com,
2017).
(Refer to appendix 2 for picture of Chanel)
Summary of the customer service practice
According to Blut et al., (2015), customer service practice is important for
most organisations as it helps n understanding the minds of the customers. Apart
from this it also addresses the customer service issues that organisations face and
make changes as per requirements. The field trip formulated questions for the
salesperson of Versace and Chanel regarding the customer service practice of the
organisations.

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Versace and Chanel both are alert in terms of recognising potential buyers of
their products. The fact that the products sold by these organisations are higher than
local brands makes it easier for the companies to identify a setup people capable to
purchase these products. The companies identify customers based on the interest
shown while purchasing the products.
Agnihotri et al., (2016) stated that while at a workplace employees need to
ensure that the behaviour is maintained in a professional manner. The manner in
which the employees present themselves by the uniforms worn by them also
denotes professionalism. In the case of Versace and Chanel, the salesperson does
not wear any specific uniforms that denote their profession. However, the
salesperson is dressed in a professional manner in order to be presentable to the
customers. In the case of Chanel, the salesperson is dressed in black clothes to
make them recognisable as people working for the company.
The approach made by the salesperson of Versace was warm and gentle.
Greetings were exchanged upon entry and full freedom was provided in order to be
free and select any design of choice. Similarly, in the case of Chanel, the
salesperson provided freedom to identify and select items that attract the customers.
However, the salesperson did insist upon buying certain things after enquiries about
it.
Providing details of a particular product is one of the biggest duties of a salesperson
(Zurich, 2017). In the cases of Versace and Chanel, the salesperson did not
introduce the products unless they were enquired about the products. However,
upon enquiring, Chanel insisted on looking at similar products, which was absent
from the services provided by Versace. However, both the companies were
professional in terms of dealing with the needs of the customers.
Upon the enquiry of asking for products that were not available, the
salesperson of both the companies enquired with the logistics department in terms of
availability of the product. However, Versace provided assurance about the
availability of the product within a few days whereas Chanel did not showcase any
convincing methods. Instead, alternate products were offered instead of the product
that was enquired.

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In the modern day, online booking and home delivery are a common trend
among business as well as organisations (Hong, Ga &Dobrzykowski, 2014). Free
delivery of products is done by most of the organisations. However, in the case of
Versace free delivery of products are not applicable. A minimum delivery charge is
always added to the purchase of any good. In the case of Chanel, the company
provides free delivery only after the purchase of a certain amount.
The exchange and return policy of the companies are based on the principles
of not violating the rules of the organisations. Versace enables return and exchange
policies within 7 days of the payment of the product. On the other hand, Chanel
enables exchange and return policy within 10 days of the payment of the product.
With the advent of online shopping, most customers prefer to purchase
products by not visiting the stores. This is mainly due to the fact that the atmosphere
at the outlets is not friendly or does not have adequate space for movement of the
customers (Tynan, McKechnie & Hartley, 2014). However, in the case of Versace
and Chanel, the stores are attractively lit with spaces for the free movement of
customers from one place to another. The manner in which the salesperson provides
services makes it more attractive.
Versace and Chanel do not discriminate between customers. Both
organisations treat the customers equally and provide the expected services.
The image projected by Versace and Chanel are sophisticated and first class.
This is means that the quality of service and products that they provide are of much
higher level than that provided by local companies.
The mood projected by the salesperson was jolly and enthusiastic. The
salesperson was ready to provide services to the customers at the same time
answering the questions.
Stadtler (2015) stated that in the modern world, technology is used in order to
provide feedback to the organisations regarding the quality of service and products.
In the cases of Versace and Chanel, both companies have official websites from
where e-mail address of the company can be derived. E-mails can be done to
provide feedback to the organisations. Chanel also has customer feedback boxes
which can be used to channel the grievances of the customers.

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The target market of these companies is the people who aim to lead a
luxurious life. Due to the high price of the products, the companies aim to target the
high-income people of the society.
Versace sent free catalogues regularly to the customers in order to keep the
customers happy and satisfied. These catalogues provide the discount on the
purchase of a product. On the other hand, Chanel sent catalogues to the customers
after the purchase of a specific amount of items. These catalogues provide discount
opportunities upon the purchase of next items from the organisation.
Customer service plan is needed in order to address the grievances of the
customers and receive feedback regarding the thoughts of the customers (Cross,
Belich & Rudelius, 2015). Chanel lacks such a professional customer service plan as
it depends more on the feedback of the customer that is provided on the website. On
the other hand, Versace has a uniform customer service plan that addresses the
grievances of the customers and helps in the understanding the expectations of the
organisation.
The toilet in both the stores was clean enough to prevent any infections that
may arise from the toilet. However, Versace does not allow customers to use the
toilet while inside the stores. Such restriction is not imposed by Chanel.
Versace and Chanel are clean stores and have clean accessories. According
to Weinstein & Cahill (2014), cleanliness is one of the most important traits that most
customers look to find in an organisation. A clean environment helps in attracting the
customers in the outlet and increases the chances of sales of the organisation.
The speed of service of Versace is better than that of Chanel. This is
because the organisation develops the after-sales service and online delivery of
products. Chanel focuses on attracting customers to the stores.
As discussed earlier, the cleanliness of both the companies is implacable.
Due to this the appearance of the stores along with grooming and presentation of the
organisations are unique and attracts customers to visit the places.
Cho, Bonn & Brymer (2017) stated that one of the effective elements of the
marketing mix is the place of an organisation. An organisation needs to be placed in

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a convenient location that can be easily accessed by the customers. In this regard,
there were no such difficulties in identifying the stores of Versace and Chanel either
at a shopping centre or at the location of the main store.
Versace and Chanel do not provide any student discount. This is because the
target market of the organisations is the high-income people. The prices of the items
are not affordable by the students (Stein, Smith & Lancioni, 2013). The response to
this enquiry was given in a polite manner by the salesperson of Versace; on the
other hand, the salesperson of Chanel directed the managers to answer the
question.
Dissatisfaction caused by the purchase of a product is replaced by an
identical product. However, such discount, replacement or exchange of products is
applicable upon online purchase of products. Chanel also allows replacement if the
products are returned within 3 days after purchasing it from the store.
The stores of Versace and Chanel are frequented by the Corporate
Headquarters. This is because the headquarters want to ensure that the stores are
running in a successful manner. The visits are done after every 6 months from the
headquarters of Versace and at an interval of one year from the headquarters of
Chanel. The objectives of these visits are to examine the flow of sales and the
manner in which customers are being treated by the salesperson. The visit also
includes analysing the policies that are followed in the stores.
Analysing customer service practice
Based on the analysis of the questions, contradiction regarding the ways to
manage customers of both organisations can be done. According to Müller et al.,
(2016), customer satisfaction is one of the most important things that need to be kept
in mind while setting up an organisation. It has been seen that Versace and Chanel
have many similar qualities that help in identifying, attracting and retaining
customers. These include the cleanliness of the place, a manner in which customers
are welcomed, an ambience of the place and the treatment provided to the
customers. The two organisations are also similar in terms of identifying target
markets and pricing the products. However, the difference lies in the presentation of
the salesperson.

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The salesperson of Versace does not have a proper uniform that differentiates
the customers from the salesperson. The approach of the salesperson was formal
and there was no force applied to purchasing a product. Enquiries about any product
were given proper information. However, the organisation does not provide online
purchase for the customers. Despite this, the company have a proper service speed.
This mainly refers to the after sales services that are needed by the customers after
the purchase of the products. Another negative point of Versace is the fact that the
company does not have any toilet facilities for the customers.
The salesperson of Chanel wears black uniforms that help customers to
identify the salesperson easily. The salesperson proved to be informative in terms of
helping the customers identify the products. However, it is seen that the customers
are also being persuaded to purchase the products. The fact that the company
provides online purchase of products indicates the objective of profit-making. The
major difference with Versace is the fact that Chanel does not have a stable
customer service plan with which customers can interact with the company. This can
be considered as a huge challenge for the organisation as the feedback of the
customers is important for the development of the organisation. Hence, it can be said
that both the companies are similar to one another but aim at satisfying customers.
The fact that both the stores are reputed provides a competitive advantage in the
market of the respective countries.
Discussing abilities to communicate with customers
Christopher (2016) stated that communication with the customers is important
in order to understand the change in tastes of the customers as well as gain
necessary feedbacks. It can also help an organisation to identify ways by which it
can maintain the customers satisfied. Communication with the customers can be
done using technologies such as social media and websites. Apart from this,
interviews and surveys can also help understanding the mentality of the customers.
In the case of Versace, the organisation prefers to communicate with the
customers via the website. The web portals of the company provide customers with
an opportunity to give feedback that is important for the development of the
company. The company also arranges interviews with the customers and gain their

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feedback from the responses that are provided to them. The interviews help Versace
to gain a direct and more elaborate viewpoint of the customers about the products
and services that are provided to them. As stated by Monczka et al., (2015) the
interview of the customers provide an effective understanding of the situation of the
company. In this regard, it can be said that the management of Versace conducts an
excellent work at maintaining communication with the customers. The fact that the
company provides free catalogues to the customers every time is an excellent
method of maintaining the loyalty of the customers.
On the other hand, Chanel communicates with customers using online survey
and complaint boxes situated at the stores. With the advent of recent technology, it
can be said that Chanel uses the online survey from the customers in an effective
manner. The feedback from the customers is considered as an important way by
which the company can improve the functions. The fact that the company collects
feedback from customers online as well as on an offline basis signifies the
opportunities and need for improvement of the company. According to MacInnis,
Park & Priester (2014), the dual feedback system can help a company to gain
feedback from the various customers that purchase materials from the company.
The customer complaint box that exists in the company is useful to understand the
immediate response of the customers after visiting the store.
Recommendation
Based on the analysis of the situations of both Versace and Chanel, certain
suggestions can be provided that can help in improving the customer service of the
organisations. These suggestions are based on the type of customer service that is
provided by the two companies and the responses that are provided by the
customers. In the case of Versace, the company needs to improve its online delivery
of products. Versace does not provide opportunities to customers to purchase
products online. This is mainly due to the lack of technical application of the
company. Hence, this is an important aspect that needs to be developed by the
company. In the modern world, this can help Versace to maintain its reputation as a
leading company in the fashion industry. Apart from this the company also need to
improve the ways by which it involves in managing customers. The salesperson

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needs to ensure that the services provided to the customers remain satisfactory by
getting involved during the purchase time of the customers.
In the case of Chanel, the most important development that the company
needs to make is to improve the customer service plan. This is important in order to
maintain communication with the customers. It has been seen that the company
receives feedback from customers that purchase products both online and offline.
Hence, development of a proper customer service plan can help Chanel to conduct
telephonic communication with the customers and gain detailed feedback. The
grievance of the customers can be solved with the help of a proper customer service
plan. Apart from this, both the companies need to target a wide range of customers.
This can be done by reducing the prices of the products so that people with medium
income can purchase the products. This can help in increasing the reputation of the
company and creating a diverse range of products that can be useful for customers
of all social backgrounds. Thus, these recommendations can help Versace and
Chanel to improve its customer service.

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Appendices
Appendix 1
Appendix 2