An Analysis of Customer Relationship Management at Tesco PLC

This report provides a comprehensive analysis of Customer Relationship Management (CRM) strategies implemented by Tesco PLC. It begins with an introduction to CRM, explaining its key aspects and benefits, particularly within the retail industry. The report delves into Tesco's specific CRM practices, examining the impact of quality systems, processes necessary for effective CRM, and the roles of internal staff and external stakeholders. A significant portion of the report is dedicated to Tesco's loyalty scheme, exploring how it gathers customer information and informs marketing and customer service policies. The analysis further includes a review of CRM within the organization, proposing potential improvements to processes and staff roles, culminating in a plan for the implementation of these enhancements. The report concludes with a summary of findings and recommendations for optimizing CRM practices at Tesco, highlighting the importance of customer relationships in achieving business objectives. The document showcases how Tesco leverages CRM to understand and satisfy its target market, ultimately aiming to enhance customer satisfaction and loyalty.

CUSTOMERS RELATIONS
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Explanation of key aspects of CRM......................................................................................3
1.2 Benefits of CRM....................................................................................................................5
1.3 Impact of quality systems on CRM.......................................................................................6
TASK 2............................................................................................................................................7
2.1 Processes necessary to effective CRM..................................................................................7
2.2 Role of internal staff in achieving effective CRM.................................................................8
2.3 Role of external stakeholders in achieving effective CRM...................................................9
TASK 3..........................................................................................................................................10
3.1 How loyalty scheme chosen gain information about customers.........................................10
3.2 How information gained informs marketing and customer service policy..........................11
TASK 4..........................................................................................................................................12
4.1 Review of CRM in organization..........................................................................................12
4.2 Proposed improvement to CRM processes..........................................................................12
4.3 Improvement to role of staff in promoting customer relationship.......................................13
4.4 Plan for implementation of improvement............................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Customer relationship management is all about development of healthy relationship with
target market so that business can easily accomplish its desired aims and objectives (Egels-
Zandén, Hulthén and Wulff, 2015). Further, main objective of every organization is to satisfy
need of its target market in efficient manner and due to this reason development of relationship
with them is quite important. Retail industry is one of the most competitive industry within the
economy. The consumer demands and satisfaction creates an indefinite impact on business
growth. To retain large number of customers loyalty schemes are being introduced with the help
of which it becomes easy for enterprise to strengthen its customer base (Reddi, 2014). The
present will be conducted on Tesco plc which operates in retail sector and is a well-established
business unit offering variety of products and services to its target market. This multi-brand
supermarket chain has become a market leader by effective analyzing consumer needs and
demands and developing service range as per the specific requirements. The report will discuss
about the benefits of good customer relations for business along with various tools and
techniques that are used to apply it. Further, the report will be focused on describing the role of
workers that help in gaining effective CRM in organizations. Besides this, the technique of
loyalty card used by Tesco will be discussed so that its effectiveness can be checked in business.
Moreover, the processes that are applied by business to utilize the available information about
customers is also highlighted in the report. Finally the some improvements have been suggested
which can make the aspect of CRM more useful has been focused.
TASK 1
1.1 Explanation of key aspects of CRM
Customer relationship management is all about maintaining healthy relationship with
target market so as to accomplish main goals and objectives of the organization (Wang and et.al,
2013). The major aspect of CRM is to acquire and retain customer’s base effectively to manage
high loyalty in the market. Tesco has developed a significant aspect of understanding the need
and requirement of its target market thus initiatives are taken by business to grab high
satisfaction level of customers (Argenti, 2015).The mentioned company has been a successful
brand by identifying correctly the expectations of its consumers which are collected by adopting
different tools of CRM. Moreover, due to rise in level of competition retail businesses are not
able to develop healthy relationship with its target market and this sometimes leads to decline in
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overall efficiency of the organization. On the basis of above information is significant for Tesco
to keep the focus on CRM strategies in well manner so as to be aligned with major objective of
adding more customers with firm (Aitken, T., 2012).
The major elements of CRM adopted by TESCO includes:
Customer service
CRM supports in recognizing and distinguishing needs of different customers and
products can be offered to them on the basis of requirement. For this, Tesco efficiently conduct
the market survey which reveal wider information about current trends in market as well as is
also updated about client’s demand and choices. This feature of CRM is regarded to be most
significant for Tesco as it helps in easily satisfying need of large number of individuals. Apart
from this, it becomes easy for Tesco to develop its product range as per request of customers in
the market (Wagner, 2013).
Sales force automation
Tesco has analyzed that employees are the face of the firm. Sales department is
constantly looking for sales opportunities with existing and new customers. CRM thus aligns
requirement of workforce with customers’ needs and trends thus products and services are
delivered to them as per their expectations which direct leads to favorable results for
organization. Sales executives are engaged in different activities that are ultimately linked with
serving customer. Hence, employees should be developed well so that they can contribute in
effective way to make better relations with consumers of company.
Campaign management
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(Source: Tesco in CSR push, 2015)
Sales agents are very close to customers and know better about the changing trends
therefore, the top level managers should consider views of these executives to know about
client's need while making strategies (Argenti, 2015). Campaign management is one of the
significant aspect managed by the companies to focus on specific group of customers. Tesco
through its club card has developed an environmental campaign within the market which has
helped the company in creating a significant brand identity in the economy. This campaign has
helped in significantly pushing its sales.
1.2 Benefits of CRM
Large numbers of benefits are present which Tesco obtains by undertaking the approach
of CRM and in turn it acts as development tool for the business (Jaakkola and Alexander, 2014).
The major benefits attained by Tesco by adopting CRM are:
 Developing consumer base: CRM assists organization in grabbing large number of
customers as products are offered to them as per their expectations and this leads to rise
in level of satisfaction. The properly maintained CRM is helpful in keeping database of
customer's needs, choices, demands and their preferences so that managers can use these
information as a base to make further strategies in adding large number of customers.
 Enhancing market share: Aother benefit of this approach is that it supports in
enhancing market share along with profitability level of the company which is generally
one of the main motive of organization behind carrying out operations in the market.
According to experts, the clients can be satisfied better when they are provided good
response related to after sale service (Dozier, Grunig and Grunig, 2013). Moreover,
keeping regular customers linked with firm's various offers, schemes through messages
and other contacts make them happy and intact with organization
 Helps in understating changing trends: Concept of CRM allows Tesco in
understanding need and requirement of target market due to which customers are served
in appropriate manner and this in turn allows Tesco to serve customers in better manner
(Gamboa and Gonçalves, 2014). Another main benefit of CRM is that it enhances
customer satisfaction where business tries to build healthy relationship with the target
market on continuous basis.
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 Retain consumers: It is an effective tool that helps in retaining customers with
organization. The number of brand loyal consumers can be enhanced as they are served
with better tools and techniques which induces them to stick with same brand. On the
other hand, customer relationship management supports Tesco in improving the level of
customer service where remarkable service can be rendered to the target market as per
their expectations and in turn it acts as development tool for enterprise. This is also one
of the main benefits of customer relationship management which Tesco is able to obtain.
It keeps on realizing its clients that they are valuable assets for business concern and that is
why Tesco is continuously working to bring improvements and satisfy customers in a better
way.
1.3 Impact of quality systems on CRM
Quality systems have direct impact on CRM as through this Tesco can efficiently satisfy
requirement of its target market (Thomas, 2013). By managing quality of products and services,
mentioned enterprise will be able to grab an added advantage in making good relations with
customers. For managing quality, various techniques have been developed like TQM, ISO,
balanced scorecards and so on. All these techniques are aimed at confirming the high qualitative
features of products so that consumers can be offered with unique products having best features.
Besides this, all mentioned tools are helpful in defining the standard norms that can support
100% qualities of any product or service.
Tesco has adopted Total Quality management technique to maintain the quality services
and output for the business. It is well known fact that before purchasing any type of product or
service it is ensured by business that acceptable quality is offered and managed in the
organization. Due to this reason quality systems have positive influence on CRM. TQM keeps a
close check on the every level of business operations in Tesco which has helped the company in
attaining a competitive edge. In the era of fierce competition, by managing quality at a high level
will give the company competitive advantage. Enhancing quality is considered as one of the
main concern for every company and due to this reason enhance the quality level can lead to
favorable results. Quality improvement tools has made it easy for the businesses to maintain
healthy relationship with its target market and in turn organization has gained competitive
advantage easily (Reece and Reece, 2016).
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Tesco has effectively developed quality gateways at every operational level. This strategy
has helped the business in managing the quality of products and services offered. For example
the impact of the process has been effectively analyzed on the business development aspects.
The tools and techniques of managing quality will assure the appropriate way of its
implementation and consequently, the best and quality product will be delivered to consumer. On
the other hand, it is well known fact that before purchasing any commodity customers ensures
that quality level of the product is up to the mark so that they can be easily influenced to buy the
commodity. The customers make decision to purchase a product on the basis of quality offered
by the specific good. Due to this, basic reason it is necessary for Tesco to undertake quality
system so that business can build healthier relationship with target market and in turn it can
allow in gaining competitive advantage. Without undertaking quality systems it is not at all
possible to focus on satisfying customers needs and it can lead to decline in overall performance
of business in the market (Smith, 2012).
TASK 2
2.1 Processes necessary to effective CRM
For effective CRM different type of processes are being needed which supports business
in building better relationship with target market and allows in gaining competitive advantage
also (Repper, 2013). Tesco has adopted effective CRM strategies for organization which has
helped the company to design simple tool so that it can be used by each and every individual
within the workplace. Moreover, every employee must have proper knowledge in relation with
CRM so that favorable results can be accomplished easily at the time of using this strategy. In
order to have effective CRM it is required to follow 5 key steps which are as follows: Collecting and storing data: It is the first stage where Tesco store important and relevant
information linked with its customers (Dozier, Grunig and Grunig, 2013). On this basis,
the company make a profile that can describe typical buyer behaviors of organization.
Further it helps in making marketing strategies which will be focused on targeted
customers that are identified by stored data. Moreover the stated measure helps the
business in attaining significant growth in the competitive economy. Building a communication timeline: It is the next stage where company has to identify
the best frequency for communicating with new customers. This involves sharing of
crucial information. In this stage, organizations try to use all the information that are
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relevant in building strong relationships with customers. Moreover, this cycle is used in
repetitive way sop that it can add value in involving more customers (Gamboa and
Gonçalves, 2014). Analyzing sales data: In this stage business has to analyze its most profitable customers
and more effective ways must be identified in order to contact them. Here, company may
ask clients to provide testimonials where they may share their views and experience with
organization. These testimonials can be shown to other customers so that a confidence
can be developed in them while purchasing. Making the data accessible: Sales person of the business is required to know status of
orders, issues along with payments (Toufaily, Ricard and Perrien, 2013). Further,
engineering staff of quoted firm can track the data of various clients so that their issues
and problems related with products can be identified and resolved quickly.
 Personalizing communication: It is the last stage where organization can use the past
history that has been collected in the database of CRM. This will also help in recognizing
issues that are bothering customers and communicating them with possible solutions.
2.2 Role of internal staff in achieving effective CRM
Staff members working within Tesco plays most crucial role in accomplishing effective
CRM where the knowledge along with skills present within them supports business in building
stronger relationship with the target market (Aitken, 2012).
 Communication brand value to buyers: The workers help in adding customers with the
brand by applying their skills and efficiency while communicating with the clients.
Further, it is well known fact that every individual has some sort of good knowledge
which can be applied in understanding need and requirement of target market. This need
is first recognized by the staff who come in contact with customers. The consumers use to
ask their problems and needs with them which make employees acknowledged about
their demands.
 Developing strategies for buyers: Staff members working within the organization plays
most crucial role in effective CRM where they apply large number of strategies so as to
target customers in proper manner. For Tesco, internal staff members directly deal with
customers on daily basis and due to this reason they know the effective ways through
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which CRM can be developed easily and in turn Tesco has gained competitive advantage
with the help of same (Valmohammadi and Roshanzamir, 2015).
 Analyze market trends: Employees use to share these needs of customers with their
immediate supervisors which is communicated to top level managers. Thus, they make
plans to fulfill expectation of customers and satisfy them. By applying different type of
knowledge and skills Tesco can has built a healthier relationship with its customers and
this leads to favorable results for business such as enhanced market performance, rise in
market share etc. This also calls for hiring staff that are efficient and skilled in
communication and handling clients with their presence of mind. This will allow
customers to have better response for their queries.
 Contributes in business development: Apart from this, they can guide business on
various areas especially where organization is under-performing and needs improvement
(Gregory and Willis, 2013). Employees can assist in development of more effective CRM
strategies which are fruitful for the business in every possible manner. Tesco thus involve
bottom line employees in decision making process and strategy formulation. They will
assist in making strategies by entailing various pros and cons that might affect the
business. Therefore, with the help of this it can be stated that internal staff of the
company plays most important role in achieving effective CRM.
2.3 Role of external stakeholders in achieving effective CRM
External stakeholders are various parties associated with the business and they are
influenced by the type of decisions being taken by business. Stakeholders such as customers,
government, banks can assist company in effective CRM (Khodakaramiand and Chan, 2014).
For instance if Tesco takes feedback from its customers on continuous basis then same can be
considered in development of products and provides them a base in serving customers. Their
suggestions can be planted in strategy formulation so that their expectations can be fulfilled.
Apart from this, their role is crucial as in case if their feedback is not considered then it is not
possible for management to develop healthier relation with target market. If their issues are not
resolved in the manner they want, company may lose their customer forever. Through effective
feedback system organization can easily know need and requirement of target market and same
acts as development tool for the enterprise (Ettouzani, Yates and Mena, 2012). Mentioned
company can hire employees in this regard who can address various issues of consumers and
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reply them with positive side. They can also assure them, their problem will be resolved in best
possible way with immediate effect. This will show the commitment of said entity with
customers and a good relation will be developed between client and company. Due to this reason
role of customers as external stakeholder is crucial especially in achieving effective CRM.
Business has to comply with the need of the target market and it has to be ensured that
organization is meeting with their needs in efficient manner. Apart from this, government is
another key stakeholder which provides different type of information to company on various
aspects (Egels-Zandén, Hulthén and Wulff, 2015). Moreover, they also release guidelines that
are helpful for company to be ethical in their business processes. Thus, government acts in the
direction of welfare for customers and help organizations to be on right path. So, such data is
also beneficial for organization for effective CRM. Through this, it is possible to serve customers
in better manner. In addition to this, companies will be able to give overall satisfaction to all its
stakeholders.
TASK 3
3.1 How loyalty scheme chosen gain information about customers
In order to retain large number of customers businesses have started to introduce loyalty
schemes with the help of which it becomes easy to enhance satisfaction level of the customers
and enhances organizational productivity (Reddi, 2014). Further, Tesco’s loyalty scheme named
clubcard is quite effective where the holder of the car receive one point for every £1 they spend.
Holders can also receive extra points on special offers and they receive one Green clubcard point
for every carrier bag they re-use (Wang and et.al, 2013). This scheme shows the innovative side
of mentioned firm as it is helping in boosting the sales of company while ob other hand it is
contributing in saving the environment. This loyalty scheme of Tesco directly provides
additional benefit to customers of enterprise where they prefer to purchase more products of
Tesco on continuous basis. Apart from this, when any clubcard is being issued to new customers
then personal information along with purchase of products is taken by company. This collected
information helps the cited entity to keep in touch with customers and making effort towards
developing customer service that can satisfy clients. This is one of the most effective source
being undertaken by Tesco in order to satisfy need and requirement of target market. Apart from
this, the additional points being obtained by the customers can be converted into cash or can be
redeemed (Argenti, 2015). The options being provided to the customers are based on their
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convenience and in turn enhance satisfaction level. Thus, it implies the steps taken by mentioned
company in achieving the best satisfaction level of clients. This loyalty information has
supported Tesco in obtaining information regarding purchase behavior of target market and on
the basis of same organization is able to meet with the changing need of customers. The whole
idea of Clubcard has helped the said enterprise in attaining the competitive advantage and
enhacing the sales volume of business. Moreover, it also connotes that, Tesco is not only
engaged in making profits by increasing sales but also focuses on maximizing consumer's
satisfaction (Ettouzani, Yates and Mena, 2012). So, with the help of this it can be stated that
loyalty scheme of Tesco is quite effective and has supported organization to serve its customers
in better manner (Jaakkola and Alexander, 2014) .
3.2 How information gained informs marketing and customer service policy
Information obtained by Tesco with the help of loyalty scheme supports in informing
marketing along with customer service policy (Thomas, 2013). On the basis of customer
information marketing strategies are being developed by business and in turn company can easily
target its customers in efficient manner. Various buying behavior, frequency of purchase and
choices of clients can easily be tracked with the help of CRM. In short, business can easily
determine the ways of promoting products in front of target market. Further, customer service
policy is also developed by obtaining information in relation with customers. With the help of
inducing good after sales service by company, Tesco can have added benefits of making more
number of customers. Many business firms do not use to give needed response in such cases,
which increases dissatisfaction among consumers and firms fail to gain client's trust
(Khodakarami and Chan, 2014). In case if organization knows that customers prefer more online
shopping then with the help of customer service policy online tools are promoted so that target
market can indulge into online practices rather than offline one (Reece and Reece, 2016). Data
gathered linked with customers supports in development of marketing along with customer
service policy which is effective enough in enhancing organizational performance. Apart from
this, it strengthens customer base of the organization and brings favorable results such as rise in
market share along with profitability level. Moreover, these policies help in gaining competitive
advantage as well by making services superior than rival firms. Different type of marketing tools
are being present but it is not necessary that they may influence purchase decision of customers.
Therefore, the information gained about customers supports in informing marketing along with
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the customer service policy of business (Smith, 2012). It also necessitate that policies should be
framed after confirming its all possible chances of success and failures as well.
TASK 4
4.1 Review of CRM in organization
CRM within Tesco plays most crucial role as through this Tesco is able to understand
need and requirement of its target market (Dozier, Grunig and Grunig, 2013). Further, it has lead
to accomplishment of desired objectives along with favorable outcomes. Each and every product
is offered by Tesco as per customers need and modification is done on continuous basis so that
satisfaction level of target market can be enhanced easily. The CRM tool also helps in bringing
innovations in the company as the needs of customers work as a base in formulating new
products and strategies. Apart from this, for building relationship with target market feedback is
taken from them and on the basis of same, possible changes are made in the product range
(Toufaily, Ricard and Perrien, 2013). The feedback taken from customers is used in formulation
of strategies and it is ensured that any feedback implying shortcoming of business process must
be overcome. Overall the CRM strategies employed by Tesco are quite effective and this is one
of the main reason behind strong customer base of the enterprise. Through loyalty scheme such
as clubcard company is providing monetary benefits to its target market along with remarkable
experience in the field of retail. Besides this, the loyalty card's idea has also contributed in
encouraging the concept of conservation of environment (Wagner, 2013). Moreover, through
effective feedback system business ensures whether satisfaction level of target market is up to
the mark or not. It has enhanced satisfaction level of the customers and due to this reason they
prefer to purchase products of Tesco rather than other companies in the market (Aitken, 2012).
In short, CRM strategies have developed internal strength of company along with the ability of
meet challenges being present in the business environment. So, this can be easily regarded as one
of the main reason behind success of Tesco in the market where it operates.
4.2 Proposed improvement to CRM processes
The overall process of CRM employed by Tesco is effective but some improvement is
needed so that organization can easily strengthen its customer base (Valmohammadi and
Roshanzamir, 2015). Further, improvement is required in development of new loyalty scheme as
till present company totally depends on clubcard scheme and due to this reason introduction of
some other scheme is must. The concept was developed much before and though the scheme is
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