Tesco the CRM Champions

Tesco Tesco The CRM ChampionThe CRM Champion

Introduction - TescoIntroduction - Tesco

Various customer services schemes such as First Class Service Various customer services schemes such as First Class Service Initiative, loyalty Card Scheme etc.Initiative, loyalty Card Scheme etc.

Tesco has moved from customer service to customer delight.Tesco has moved from customer service to customer delight.

Presentation discusses the customer service initiatives at Presentation discusses the customer service initiatives at Tesco.Tesco.

Tesco followed the model of “pile it high and sell it cheap.”Tesco followed the model of “pile it high and sell it cheap.”

A Master at CRMA Master at CRM

Tesco mass-customized the magazines by sending it to their Tesco mass-customized the magazines by sending it to their customers.customers.Every magazine had a unique combination of articles, Every magazine had a unique combination of articles, advertisements related to its offerings and third party advertisements related to its offerings and third party advertisements.advertisements.Promotional coupons were distributed though this magazines.Promotional coupons were distributed though this magazines.Launched Loyalty cards which fall under the domain of Launched Loyalty cards which fall under the domain of customer retention strategies.customer retention strategies.Collection of data through this Cards, which formed the basis Collection of data through this Cards, which formed the basis for formulating strategies that offered customers personalized for formulating strategies that offered customers personalized services in a cost effective manner.services in a cost effective manner.

Answer for RPMAnswer for RPM

Retail price Maintenance system had restricted Retailers from Retail price Maintenance system had restricted Retailers from pricing goods below a price agreed upon the MRP.pricing goods below a price agreed upon the MRP.Tesco were not able to compete on price with small retailing Tesco were not able to compete on price with small retailing outfits.outfits.Tesco came up with an idea of Trading Stamp, this stamps Tesco came up with an idea of Trading Stamp, this stamps were given to customers in return for making purchases at its were given to customers in return for making purchases at its stores.stores.Customers can redeem this stamps against cash or gift.Customers can redeem this stamps against cash or gift.This strategy of Tesco proved very successful and this lead to This strategy of Tesco proved very successful and this lead to worked towards getting the RPM abolished.worked towards getting the RPM abolished.

Adoption of StrategiesAdoption of Strategies

In 1979, company successfully launched a price cutting In 1979, company successfully launched a price cutting campaign named “ campaign named “ Checkout at TescoCheckout at Tesco”.”.In 1985, Tesco Launched the “ In 1985, Tesco Launched the “ Healthy EatingHealthy Eating” initiative ” initiative which aimed at conveying the nutritional value of the which aimed at conveying the nutritional value of the company to the customers.company to the customers.In 1990, Tesco came with three new formats stores, In 1990, Tesco came with three new formats stores, Tesco MetroTesco Metro: To serve local community of region, : To serve local community of region,

Tesco ExpressTesco Express: Combination of petrol pump & : Combination of petrol pump & convenience store, convenience store,

Tesco Extra StoreTesco Extra Store: Hypermarket focused equally on food : Hypermarket focused equally on food and non food merchandise. and non food merchandise.

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In 1995, Tesco launched the Clubcard Loyalty In 1995, Tesco launched the Clubcard Loyalty scheme.scheme.Tesco adopted the policy of offering its service to Tesco adopted the policy of offering its service to customers in innovative ways.customers in innovative ways.Instance: “Tescooters” (scooters) were purchased by Instance: “Tescooters” (scooters) were purchased by the thailand customer and it was delivered to their the thailand customer and it was delivered to their home.home.With With www.tesco.com company emphasized on E- company emphasized on E-commerce.commerce.In 2000, company tied up with a Safeway Inc to In 2000, company tied up with a Safeway Inc to launch an online grocery shopping serviceslaunch an online grocery shopping services

CRM – The Tesco wayCRM – The Tesco way

In 1993-94, Tesco launched the “In 1993-94, Tesco launched the “First Class ServiceFirst Class Service”.”.In 1994, company launched the “In 1994, company launched the “One on FrontOne on Front” scheme ” scheme to reduce the time of customers at check-out counters.to reduce the time of customers at check-out counters.Tesco store personnel ensure that if there was more Tesco store personnel ensure that if there was more than one person at any counter will lead to open for the than one person at any counter will lead to open for the person second in line.person second in line.In 1994, Tesco began tied up with Dunnhumby.In 1994, Tesco began tied up with Dunnhumby.Tesco began testing of Clubcard Loyalty Scheme.Tesco began testing of Clubcard Loyalty Scheme.In this way Company started collecting the Database of In this way Company started collecting the Database of customers like name, add, dob, e-mail etc. customers like name, add, dob, e-mail etc.

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With the help of data mining they analyzed the data and With the help of data mining they analyzed the data and classified the customers into four broad categories: Premium, classified the customers into four broad categories: Premium, Standard, Potential and Uncommitted.Standard, Potential and Uncommitted.Further analysis on the type of product purchased.Further analysis on the type of product purchased.Customers were categorized along dimensions such as, value, Customers were categorized along dimensions such as, value, convenience, frozen, healthy eating, fresh and kids. convenience, frozen, healthy eating, fresh and kids. Tesco began giving many special privileges, such as Valet Tesco began giving many special privileges, such as Valet parking and personal attention from store managers to parking and personal attention from store managers to customers.customers.Special cards were created for students and mothers.Special cards were created for students and mothers.Special attention given to expectant mothers in the form of Special attention given to expectant mothers in the form of personal shopping assistants.personal shopping assistants.

Tesco used the info.Tesco used the info.

Tesco used the information generated by the Clubcards in Tesco used the information generated by the Clubcards in following ways:following ways:

PricingPricingMerchandisingMerchandisingPromotionsPromotionsCustomer ServiceCustomer ServiceMedia EffectivenessMedia EffectivenessCustomer AcquisitionCustomer AcquisitionMarket ResearchMarket ResearchCustomer Communication.Customer Communication.

Reaping the BenefitsReaping the Benefits

Tesco adopted “Tesco adopted “the rifle shot approachthe rifle shot approach” instead of “” instead of “the carpet the carpet bombing approachbombing approach””Due to the captive customer base and the cross-selling Due to the captive customer base and the cross-selling opportunity, the cost of acquiring customers for its financial opportunity, the cost of acquiring customers for its financial service was 50% less.service was 50% less.Due to the data Tesco was able to offer better services to the Due to the data Tesco was able to offer better services to the customers.customers.Tesco was ensured that the footfalls in its stores did not Tesco was ensured that the footfalls in its stores did not decline on account of competitive pressures.decline on account of competitive pressures.

Tesco developed a totally new product rage, “ Tesco Tesco developed a totally new product rage, “ Tesco Finest” for the high income bracket who are attracted by Finest” for the high income bracket who are attracted by rivals.rivals.

Tesco, removed the impulsive products like candies from Tesco, removed the impulsive products like candies from off-shelf still company earned profit.off-shelf still company earned profit.

Customer Service to Customer Customer Service to Customer DelightDelight

Tesco adopted the four-pronged Tesco adopted the four-pronged approach: launch better & bigger stores, approach: launch better & bigger stores, offer competitive prices, increase the offer competitive prices, increase the products offered and focus on remote products offered and focus on remote shopping services.shopping services.

Tesco, employed a dedicated team of Tesco, employed a dedicated team of employees, called “employees, called “Price CheckersPrice Checkers”. ”.

Every Customer Offered Help Every Customer Offered Help (ECOH)(ECOH)

All employee were given clear instructions All employee were given clear instructions about the way in which they were about the way in which they were expected to deal with customers like: expected to deal with customers like:

Greet customers,Greet customers,

Offerings them help and Offerings them help and

Wishing them a good day.Wishing them a good day.

In 2001 – 02 Tesco, introduced Customer Chamapions in its In 2001 – 02 Tesco, introduced Customer Chamapions in its stores.stores.

It also collaborate with suppliers to develop a “It also collaborate with suppliers to develop a “Lean Lean ThinkingThinking”.”.

Company also followed a continuous replenishment of policy Company also followed a continuous replenishment of policy to ensure at leat 99% of stock availability.to ensure at leat 99% of stock availability.

In 2003, company launched a fixed line telephone and mobile In 2003, company launched a fixed line telephone and mobile phone service in the UK. phone service in the UK.

Tesco launched a new initiative targeted at its women Tesco launched a new initiative targeted at its women customers name “ customers name “ Me TimeMe Time””

““Me TimeMe Time” was offered ladies free sessions at leading health ” was offered ladies free sessions at leading health spas, luxury gyms and beauty saloons and discounts on spas, luxury gyms and beauty saloons and discounts on designers clothes, perfumes and cosmetics.designers clothes, perfumes and cosmetics.

In 2003, company cut a total $60 million off on a vast range of In 2003, company cut a total $60 million off on a vast range of products to continue offering competitive prices.products to continue offering competitive prices.

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