Retailing Management: Customer Relationship Management

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30 Questions

What is one objective of analyzing a customer database?

To forecast sales and allocate merchandise

What is market basket analysis used for?

To suggest where to place merchandise in a store

What is the main purpose of joint promotions?

To promote multiple products together

What does RFM analysis stand for?

Recency, Frequency, Monetary

What is the objective of CRM programs for first-time customers?

To convert them into early repeat customers

What type of retailers often use RFM analysis?

Catalog retailers and direct marketers

What is the primary goal of Customer Relationship Management (CRM)?

To develop a base of loyal customers who patronize the retailer frequently

What is the term used to describe the percentage of a customer's purchases made from a retailer?

Share of wallet

What is the primary focus of CRM systems?

Identifying and building relationships with the most valued customers

What is the main difference between CRM and traditional customer service approaches?

CRM focuses on loyal customers, while traditional approaches focus on all customers

What is the philosophy behind CRM?

More profitable customers need to be treated differently

What does customer loyalty entail?

More than making repeat visits to a retailer and being satisfied with their experiences

What is one of the four approaches retailers use to retain their best customers?

Personalization

What is the primary purpose of frequent shopper programs?

To build a customer database and encourage repeat purchase behavior

What is a key consideration in developing effective frequent shopper programs?

Offering choices in selecting rewards

What is one way retailers can build and maintain the loyalty of their best customers?

By providing unusually high quality customer service

How can the Internet channel help retailers develop a sense of community among customers?

By allowing customers to exchange information using bulletin boards

What is the outcome of customers participating in a community developed by retailers?

They are more reluctant to leave the 'family' of other people patronizing the retailer

What is a common practice of small, local retailers that can be automated through the Internet channel?

One-to-one retailing, tailoring retail programs to individual customers

According to the 80-20 rule, what percentage of sales or profits come from a certain percentage of customers?

80 percent of sales from 20 percent of customers

Which customer segment values customer service over merchandise price?

Platinum Segment

Which customer segment is considered the least profitable?

Lead Segment

What is the primary difference between the Gold and Platinum customer segments?

Price sensitivity

What is the purpose of dividing customers into segments?

To identify the most profitable customers

What does customer alchemy involve in retailing management?

Selling more products and services to existing customers

What is the objective of add-on selling in retailing?

To sell additional new products or services to existing customers

What is the characteristic of the bottom tier of customers in retailing?

They have negative lifetime value

What is one approach to dealing with unprofitable customers in retailing?

Offering less costly approaches to satisfy their needs

What is the challenge in implementing CRM programs in retailing?

Implementing CRM programs effectively

What is required for the effective implementation of CRM programs?

The coordination of activities by different functions in a retailer's organization

Learn about Customer Relationship Management (CRM) in retailing, including CRM processes, data collection and analysis, customer service development, and implementing efficient CRM programs.

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