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Tesco The CRM Champion Presented By: Wadekar Vishal

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Introduction - Tesco <ul><li>Various customer services schemes such as First Class Service Initiative, loyalty Card Scheme etc. </li></ul><ul><li>Tesco has moved from customer service to customer delight. </li></ul><ul><li>Presentation discusses the customer service initiatives at Tesco. </li></ul><ul><li>Tesco followed the model of “pile it high and sell it cheap.” </li></ul>

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Background Note <ul><li>The first store was opened in 1929 in Burnt Oak, Edgware. </li></ul><ul><li>By 1930, around 100 stores were operating under the Tesco label. </li></ul><ul><li>In 1948, the first self-service Tesco store was opened in St Albans. </li></ul><ul><li>Gradually Tesco grew over 400 stores. </li></ul><ul><li>In 1960, Tesco began selling clothing, household goods, fresh foods and groceries. </li></ul><ul><li>In 1968, Victor Value came under the company’s fold. </li></ul><ul><li>In 1974, Tesco began operating petrol pumps. </li></ul>

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Continue… <ul><li>Tesco pioneered the large format stores concept in the UK. </li></ul><ul><li>By now Tesco was renowned for its competitive prices. </li></ul><ul><li>Entered in France in 1994, Hungary and Poland in 1995. </li></ul><ul><li>In 1995, joint venture with the Royal Bank of Scotland as “ Tesco Personal Finance ” (TPF) </li></ul><ul><li>TPF offered customers a wide array of personal finance services. </li></ul><ul><li>In 1996, entered the Czech Republic. </li></ul><ul><li>In 1998, entered in Northern Ireland and Thailand. </li></ul><ul><li>In 2000, Tesco established tesco.com and began operations in Taiwan. </li></ul>

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Continue… <ul><li>In 2001, Tesco acquired a 53% stake in Dunnhumby. </li></ul><ul><li>In 2001, a host of new ranges of food products were launched. </li></ul><ul><li>In May 2002 Launched 1 st store in malaysia. </li></ul><ul><li>By mid 2003, Company was operating 2291 stores around the world. </li></ul>

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

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

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Adoption of Strategies <ul><li>In 1979, company successfully launched a price cutting campaign named “ Checkout at Tesco ”. </li></ul><ul><li>In 1985, Tesco Launched the “ Healthy Eating ” initiative which aimed at conveying the nutritional value of the company to the customers. </li></ul><ul><li>In 1990, Tesco came with three new formats stores, Tesco Metro : To serve local community of region, </li></ul><ul><li>Tesco Express : Combination of petrol pump & convenience store, </li></ul><ul><li>Tesco Extra Store : Hypermarket focused equally on food and non food merchandise. </li></ul>

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

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

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

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Tesco used the info. <ul><li>Tesco used the information generated by the Clubcards in following ways: </li></ul><ul><li>Pricing </li></ul><ul><li>Merchandising </li></ul><ul><li>Promotions </li></ul><ul><li>Customer Service </li></ul><ul><li>Media Effectiveness </li></ul><ul><li>Customer Acquisition </li></ul><ul><li>Market Research </li></ul><ul><li>Customer Communication. </li></ul>

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

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<ul><li>Tesco developed a totally new product rage, “ Tesco Finest” for the high income bracket who are attracted by rivals. </li></ul><ul><li>Tesco, removed the impulsive products like candies from off-shelf still company earned profit. </li></ul>

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Customer Service to Customer Delight <ul><li>Tesco adopted the four-pronged approach: launch better & bigger stores, offer competitive prices, increase the products offered and focus on remote shopping services. </li></ul><ul><li>Tesco, employed a dedicated team of employees, called “ Price Checkers ”. </li></ul>

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Every Customer Offered Help (ECOH) <ul><li>All employee were given clear instructions about the way in which they were expected to deal with customers like: </li></ul><ul><li>Greet customers, </li></ul><ul><li>Offerings them help and </li></ul><ul><li>Wishing them a good day. </li></ul>

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<ul><li>In 2001 – 02 Tesco, introduced Customer Chamapions in its stores. </li></ul><ul><li>It also collaborate with suppliers to develop a “ Lean Thinking ”. </li></ul><ul><li>Company also followed a continuous replenishment of policy to ensure at leat 99% of stock availability. </li></ul><ul><li>In 2003, company launched a fixed line telephone and mobile phone service in the UK. </li></ul><ul><li>Tesco launched a new initiative targeted at its women customers name “ Me Time ” </li></ul>

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<ul><li>“ Me Time ” was offered ladies free sessions at leading health spas, luxury gyms and beauty saloons and discounts on designers clothes, perfumes and cosmetics. </li></ul><ul><li>In 2003, company cut a total $60 million off on a vast range of products to continue offering competitive prices. </li></ul>

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<ul><li>Than you </li></ul>