CRM, Customer Loyalty, and Site Design: NMIMS Assignment 2019

This assignment delves into Customer Relationship Management (CRM) strategies, focusing on customer loyalty programs, customer lifetime value, and website design aspects. It evaluates successful customer loyalty programs like Amazon Prime and TOMS' one-for-one model, highlighting their impact on customer engagement and business growth. The assignment further explores how companies like Netflix and Starbucks utilize customer lifetime value to enhance customer satisfaction and retention. A case study examines crucial aspects of site design for building trust, brand impression, and effective content delivery, along with recommending payment gateway options for Ferris wheel. The analysis includes practical examples and references to support the findings, providing a comprehensive overview of CRM principles and their real-world applications. Desklib provides this and many more solved assignments for students.

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System04121
5/26/2019

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Contents
Answer 1: Customer Loyalty Program......................................................................................2
1. Amazon...........................................................................................................................2
2. TOMS one for one..........................................................................................................2
Answer 2: Customer Lifetime Value.........................................................................................2
1. Netflix:............................................................................................................................3
2. Starbucks:........................................................................................................................3
Answer 3: Case Study................................................................................................................4
a) Aspects those are imperative to the success of a site design..............................................4
 Easily build trust with the visitors...................................................................................4
 Builds brand impression..................................................................................................4
 Increased web content and impact the business..............................................................4
b) The payment gateway options that you would propose to Ferris wheel.............................5
 Cash free payment gateway............................................................................................5
 Paytm payment gateway.................................................................................................5
REFERENCES...........................................................................................................................6

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Answer 1: Customer Loyalty Program
It is program that is run by a company in order to provide offers and benefits to the
customers. These benefits are in the form of offers, discounts and free products or any other
form of promotion. The main purpose of the customer loyalty program is to increase the
business and make strong relationship with the customers (Ernst, Hoyer, Krafft & Krieger,
2011).
The two best customer loyalty programs according to us are
1. Amazon
It is a much known site for prime membership program. Amazon lets the customer
access the unlimited free two day shipping for a flat annual fee and this also helps the
prime members to shop 4 times more than the other amazon customers and also gives
amazon a competitive edge over the other retailers such as Walmart.
2. TOMS one for one
This is another company which has a very unique customer loyalty program they try
to make a real difference with their customer loyalty program; they do not offer a
monetary benefit in exchange of the purchase of customers. With every new purchase
the customers gets a chance to create a change by taking various initiatives such as
one for one shoe donation and profit sharing with wild life conservation society.
Answer 2: Customer Lifetime Value
It is a metric which is used to understand the customers in a more précised manner. It
is a way companies measure or predict the future relationship with the customers. This

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metrics helps the company to make decisions while investing and this helps the company to
know if they will have a long term or a short term benefit.
Customer life time value helps the companies to design new and effective strategies with
good budget planning which can help them to bring more profit.
It is important to calculate customer lifetime value as it helps the company to the rate of
customer retention. By, measuring the Customer Lifetime Value a company can know and
can evaluate better the decision of investing in retaining of current customers and it also helps
the company to plan for the further spending and divide the budget between acquisition and
retention.
1. Netflix:
Netflix uses the customer lifetime value in order to know its customers better.
According to the study of Netflix, an average subscriber of Netflix stays on board for
25 months. The life time value of a Netflix user is somewhere around $291.25 (Vogt,
2011). Netflix see their customers as the most important thing and they know that
customers cancel their membership because they don’t like waiting for the movies to
arrive in the mail and that is the reason Netflix started to live stream the movies in the
web (Coltman, Devinney, & Midgley, 2011)
2. Starbucks:
This company too makes use of the customer life time value in order to satisfy the
customers. Starbucks believes that the best way to increase customer lifetime value is
to satisfy the needs and wants of the customers. A study done by Starbucks shows that
it costs Starbucks around 6 to 7 times more in order to attract the new customers and
Starbucks customer satisfaction has been reported high of around 89 (Kumar, 2010).

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per cent and due to this high per cent the customer lifetime value of Starbucks is
calculated to be at $14,099. (Taylor, Roberts, Oram, et al, 2015)
Answer 3: Case Study
a) Aspects those are imperative to the success of a site design
 Easily build trust with the visitors
The visitors to the website are the one who are the customers of the brands and
nowadays customers are socially connected and they tend to check the site before
visiting a place. A good and professional website can build trust among the customers
and can ensure them that the brand is genuine. A site should not have low colours or
slow load time as this can build distrust among people (Lin, Chen, & Kuan-Shun
Chiu, 2010).
 Builds brand impression
In order to grow and develop a brand it is important to have a good and interactive
website as it helps the business grow fast, website is basically the face of the company
or the brand, in a website the logo, wording and font is really important. All these
aspects are important for a good brand (Kumar, 2010).
 Increased web content and impact the business
A good content only cannot help the brand, it is important to have a good layout in der
to attract the customers to the website. Website is a good marketing tool which helps a
brand to attract large amount of customers, the first impression of the customer
depends on the design of the website and not the con tent of the website (Verhoef,
Reinartz, & Krafft,2010).

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a) The payment gateway options that you would propose to Ferris wheel
- Cash free payment gateway
It is India’s cash free bulk pay-outs and a payment gateway company, it provides
various payment options such as card (Amex, visa, master, Rupay) and it also allows
mobile wallets such as Paytm, net banking option, Airtel and mobikwick. The main
features of this type of payment method are:
- The initial set up fee is zero(Kumar, 2010).
- The maintenance charges annually are zero
- Annual requirement for business is zero
- Extra taxes are applicable from time to time
 Paytm payment gateway
This is one of the most popular payment gateway methods. It can be a beneficial
method of payment for any business it supports various domestic cards such as: visa,
master, diners and discover. The main features of this are:
- The initial fee for set up is Rs 5000
- The annual maintenance charge is RS 5000 (Rababah, Mohd, & Ibrahim,
2011).
- The annual business requirement is zero
- Taxes extra as applicable from time to time

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REFERENCES
Coltman, T., Devinney, T.M. & Midgley, D.F. (2011). Customer relationship management
and firm performance. Journal of Information Technology, 26(3), pp.205-219.
Ernst, H., Hoyer, W. D., Krafft, M., & Krieger, K. (2011). Customer relationship
management and company performance—the mediating role of new product
performance. Journal of the academy of marketing science, 39(2), 290-306.
Kumar, V. (2010). Customer relationship management. Wiley international encyclopedia of
marketing.
Lin, R. J., Chen, R. H., & Kuan-Shun Chiu, K. (2010). Customer relationship management
and innovation capability: an empirical study. Industrial Management & Data
Systems, 110(1), 111-133.
Rababah, K., Mohd, H., & Ibrahim, H. (2011). Customer relationship management (CRM)
processes from theory to practice: The pre-implementation plan of CRM system.
International Journal of e-Education, e-Business, e-Management and e-Learning, 1(1),
22-27.
Taylor, J., Roberts, J., Oram, C., Gupta, A., Itani, M., Baroudi, S., & Smith, R. (2015). U.S.
Patent No. 8,972,876. Washington, DC: U.S. Patent and Trademark Office.
Verhoef, P. C., Reinartz, W. J., & Krafft, M. (2010). Customer engagement as a new
perspective in customer management. Journal of service research, 13(3), 247-252.
Vogt, C.A. (2011). Customer relationship management in tourism: Management needs and
research applications. Journal of Travel Research, 50(4), pp.356-364.