Question

Tesco: the customer relationship management champion Every three months, millions of people in the UK receive a magazine from the country’s number one retailing company, Tesco. Nothing exceptional about the concept—almost all leading retailing companies across the world send out mailers/magazines to their customers. these initiatives promote the store’s products, introduce promotional schemes and contain discount coupons. However, what sets Tesco apart from such run-of-the-mill initiatives is the fact. Companies should be loyal to their customers—not the other way round. Taking into consideration the company’s strong performance since these efforts were undertaken, there would perhaps not be many who would disagree.

Answer 1

Tesco: Customers are the key to survival for any business in today's cut throat competition. Customer Relationship Management has become the buzzword for business around the world. Is it necessary to invest so much in building good Customer Relationship and what is the best strategy for that?

The World's largest retailer Tesco has adopted the best practice of first being loyal to the customer rather than the other way round. It has embraced the concept of 'Marketing' rather than 'Selling'. The company has believed that to build a loyal customer base the first step must be taken by the company itself to be loyal to the customers.

To achieve its objective of being at the fore front of Customer Relationship Management Tesco has adopted a very unique promotional strategy. The company by means of a magazine reaches out to million of customers across the world. This magazines along with the discount coupons contain loyalty cards. The cards are a means of gathering important customer information like lifestyle, desires, values needs. The loyalty cards help to gather data about the customers buying patterns and based on this data discount coupons and promotional schemes are offered. For instance for the coffee lovers promotional schemes of free coffee mugs by Nescafe are offered to the customer to make their buying experience valuable. Unlike other companies Tesco believes in targeting individual customers and knowing them personally.

Tesco has acheived its objectives by continuous dialogue with the customers, knowing the customers personally by way of the loyalty cards and discount cards.  For any company customer feed back is an important tool to gather information and data. Tesco frequently carries out customer feedback survey and based on the feedback then promotes products that the customer finds valuable.

One of the strategy it has adopted is that customers are also able to collect points which they can redeem for their choice of products. It offers some discount on any product bought and the customer ends up saving on his purchases from Tesco. Not only this with the online intiative it has made shopping simpler for busy lives and the rewards are there for buying. When it goes to such lengths to understand the customers it is rewarded by the repeat sales and a strong customer base.