Managing Customer Relationships: Case Studies on Loyalty

CRM

This component will focus on managing customer relationships with the organization in order to enhance customer loyalty. Moreover, it will also discuss on the aspects of the virtual world and the strategy which will be implemented to use YouTube as a vehicle to communicate with the customers.

Business Dilemma

Yes I believe that the most influential person in café is the customer. Customers can help the Broadway Café by increasing the sales of the café and also they can help in promoting our café. For instance, if a customer comes to our café and finds the service good and enjoys the food then that particular customer would definitely go and tell his/her friends and families about our café and in this way many more customers will start coming to our café. In order to attract more customers we need to understand the needs of the customers and we need to find ways in which our café can satisfy their needs. Customers will go away if the café does not meet their expectation since customers nowadays have become more demanding.

Moving on, it is very essential to give proper service to customers because customers can also hurt the café. If proper service is not provided to them then they can easily make a complaint about our café and this can harm our reputation in the market. Sales of any business are based on customers and in order to maintain the customers we need to develop a customer relationship management strategy. We need to find ways in which we can improve our services and attract more customers because customers play an important role in the success of our café. As seen in I hate Dell.net that customers and employees are allowed to post their complaints on websites so it is very important for every business to serve its customers properly so that they don’t post any complaints and hurt the reputation of the business. (SN Web Consulting), (I hate Dell.net).

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Yes our employees also believe that customers are the most important part of the café. Employees who work in our café understand that it is very important to provide customers with proper service. Every top management expects their employees to practice a good customer relationship. Employees are employed in any company so that they can work and serve customers and they are judged upon how well they serve their customers. The Broadway café can offer reward programs such as bonus to its employees in order for them to work hard and maintain customer satisfaction.  Therefore, employee that is most helpful to customers can be rewarded.

Making Business Decision 1

“Virtual world can help people meet, collaborate, plan, visualize, train and learn together.” (How virtual world can help real world business, 2010). Second life and virtual world are playing an important role in a success of a business. Many businesses are developing virtual world in order to incorporate it into their business and increase profits. Also now businesses have realized that doing business in virtual world can solve problems which are faced in real world such as, communication, costs and training etc. In real world it is very hard for every employee to interact with other employees and work together but through virtual world it becomes easier to communicate with every employee and work together. (How virtual world can help real world business, 2010)

Moving on, Advertising in virtual world can maximize our customers and this will also lead to a reduction in production costs. Many customers nowadays like watching videos on internet and they mostly like those videos that are presented in funny structure and which has all information regarding the product. Hence, with the use of videos we can advertise and in this way it will reach to customers more quickly and it would be far more effective. Also there will be a reduction in travelling costs as people can communicate in virtual world and save time and costs on travelling down to each others office for meetings etc. (Lowe, 2009).

In virtual world products are displayed in different forms for different businesses and in some you can test out the product how it looks on you and it allow people to see or use them before you actually purchase the product. Virtual world is a very useful tool for people to be able to meet virtually and also get full information about a particular product. Also it increases brand visibility and facilitates a new customer base. Therefore, it could be said that virtual can really make work easier for business in real world. (Saltzman, 2008).

Customer relationship will be different in a virtual world is through that there will be no physical interaction amongst customers and employees. In virtual world customers can express themselves properly for what they want and they can also state their views on which type of product they are looking for. Here customers will get an experience of how things will be at store, the surrounding and the types of products that are sold. Moving on, in virtual world customers will be able to make complaints about the product but they will have to wait on the response from the company regarding their complaint.

In order to manage customer relationships in this new virtual environment you need to be prompt while providing feedback to customers. For instance you should try to answer a customer’s query within 24 hours. Also try to deal with customer complaints in correct manner so that they don’t get offended. You need to be polite and attentive with customers either in real world or virtual world customers are one of the major factor in contributing to business world. Furthermore try to follow up with every customer’s concern. (Baley, 2011).

Supporting traditional customers are the customers in real world. Supporting second life customers will be different in a way that in second life it will be more advanced and more expensive to implement. In second life only those users who are fully equipped with the latest computing hardware can have equal access to second life. Also in second life a new customer will need to take some time getting familiarize with the second life world while for traditional customers it is not so complicated. (Chia Yao Lee, 2007).

In second life customers can interact with the employees at the same time in its avatar forms but on web site customers are unable to interact they are just able to email each other. If any product is displayed on web site, then a customer can only view the image of the product and price of it and can just place an order while in second life customers get chance to try the product on themselves and if it suits them only then they purchase it. Advertising on web site is much cheaper compared to second life but in this modern world second life is more acceptable as it provides customers with maximum satisfaction in regards to what a customer actually wants and is looking for.

The security issue which you might encounter in second life is authentication and identity theft. People ‘interact in virtual world via avatars and new accounts can be opened”. (Beer, 2007)There will be times when there will be multiple avatars and it will be hard to ensure which avatar represents whom and even if that particular avatar represents to actual person then it will be hard to know to whom it is actually associated to. Moving on, confidential and sensitive information shouldn’t be discussed in a second life because it is not so secured. For instance, the information exchanged texts and chats may not be private. (Beer, 2007).

Also theft of virtual objects example, stealing of avatar clothes, virtual buildings designs etc. There can be unauthorized use of real world brand name and trade mark. Furthermore payment and transaction integrity can be an issue too. As there is a risk for virtual wallets and inventory to get stolen. (Chia Yao Lee, 2007).

Some of the ethical issue is “defamation and disparagement meaning spreading of false rumors and misleading information. There can be disparagement of virtual and real world products” (Chia Yao Lee, 2007) . Moving on, people having fake identity are not an ethical behavior. Also “vandalism and harassment” (Chia Yao Lee, 2007) is an ethical issue, damaging of virtual objects and virtual locations. (Chia Yao Lee, 2007).

Making business decision 2

YouTube would help in communicating with customers about the unusual long waits for frappachunios and cappuccinos through a video. As JetBlue’s founder apologized to its customers via YouTube for the cancellation of flights, that’s how Broadway café can show a video to their customers on the implementation of new espresso machine and how employees are still getting used to it. You can show in the video that customers who are willing to have frappachnios and cappuccinos, they can place their order in advance, so once it gets ready then the employee can contact their customers and then customers can come and have their farppachnios and cappuccinos and enjoy the drink rather then waiting in lines for the order and getting frustrated. Since most of the people go on YouTube so it will be best to upload a video about this problem on YouTube so that majority of the customers will see the video and place their order in advance.

Moving on, the four new employees who have been employed recently are having difficulty understanding the new machine, so the old employees are most of the time assisting the new ones. In this way much time is wasted and employees are not able to attain to customers. Therefore, you can also upload a video on YouTube regarding on the usage of the new machine so that new employees can view that video and can learn from there on how to use the new machine rather than always asking the old employees assistance. In this way the problems can be rectified.

Some of the Pros of using YouTube as a customer communication vehicle are that many people nowadays watch videos on YouTube and thus, advertising on it will be very beneficial for the café. You can watch the video for free and also Broadway Café can express its creativity of the café and its variety of products on YouTube easily and in more advanced form. Furthermore, advertising on YouTube will result in reduction in marketing cost and it is very useful and much effective then advertising in real world. (Feldman)

Some of the cons of using YouTube as a customer communication vehicle is that, the video uploaded on YouTube can be viewed by everyone. Since it is viewable by everyone so everyone who views it can post comment. Some times some people post bad comments which can harm Broadway café’s image and reputation. (Feldman).“Try to avoid spam approach otherwise viewers will stop watching any video that has been uploaded by the café.” (Feldman).

Yes there are other technologies which could be used as a customer communication vehicle. Websites such as social networking for instance, MySpace, Facebook. Nowadays people enjoy social networking, so publishing on website such as Facebook will be very beneficial since many people will get to view the Broadway Café’s website and this will attract more customers. We can also use Blogs. It can be used to promote products, therefore, Broadway café can use Blogs to promote their products and increase sales. (SN Web Consulting).

Apply Your Knowledge

Currently the Broadway café’s quality of data within the system is low. It has become difficult to determine which customers are ordering what type of food or music. Having quality information means, to have accurate and up to date information. As for Broadway café their data is not up to date and accurate. Quality information should be free from duplication error meaning not having two names for a particular product which becomes hard to identify under which product name the product should be charged. There shouldn’t be any confusion while obtaining certain information. (What is data quality).

It is very important to have high quality information because it will determine the success of the café in future and also enable for the café to have a good reputation in the market. Most of the times customers are dissatisfied with the low quality information presented by businesses therefore, it is extremely important to have high quality information so that customers are satisfied. Proper information makes it easy for customers to place orders and also it becomes easy for employees to understand the order and serve the customer with the correct order. High quality information would lead to better decisions to be made and boost more profitability for the business. It can obtain competitive advantage in the market and also achieve employees and customer satisfaction which would enable café to achieve the organisational goal.

Furthermore, low quality information simply means not having accurate and up to date information about a particular product. Low quality information mostly results in lose of customers because of customer dissatisfaction. Customers who places order expects to receive the correct product. Moving on, Cafe is facing difficulties in determining which customer has ordered which product. This is due to, the poor quality of data been entered into the system. Low quality information will result in poor decisions made .Also many customers who will be dissatisfied with the service provided will also stop coming to the café and this will affect the café and its profitability.

The way in which the Broadway Café could understand its customers is by knowing how much each customer purchases and who all are the valuable customers. This can be done by taking account of the customer ID and calculating the sales for the particular customer for all the years. In this way we will better understand our customers and find ways to retain them. Moreover, by evaluating the products and stock on hand figure. Broadway Café can focus on marketing of those products more which are selling fast, because this would satisfy the customers needs and also increase sales.

There are many data quality issues as noticed in CRM_AYK.xls. The data presented is very confusing. For instance, the product name ½ cup of coffee for coffee sales, it is stated two times differently. First it is named as ½ cup of coffee and then named as ½ Cup of Coffee, so when a customer places order for ½ cup of coffee the data is entered incorrectly. Therefore, to avoid confusion they should just keep one properly spelt name of ½ cup of coffee.

Also data presented under heading ‘Other’ it does not state any dollar value so we can not state that what actually the figures under the heading ‘Other’ depicts and how to take account of the figures. Some of the figures are negative so it is very hard to analyse that what the negative figure means. Maybe they are recording some products under one general heading as ‘Other’. To avoid this issue the company can just record the products under its respective headings rather then putting it all under one as ‘Other’ which is ambiguous. It also shows negative amounts which needs to be clarified as, what it means and how it should be taken into account.

The Café needs to keep track of the stock and the system should automatically depict that how much stock is left for instance, if a Music CD is sold then the system should automatically decrease one Music CD from the stock record and also show how many more Music CDs are left.

Moving on, when identifying the best selling product it is hard to indicate whether to take into account the highest number of sales of the highest number of product sold or the profitability of the products or whether to just take into account the highest number of product sold.

We have assumed and taken into account the customer ID and the total amount of sales for each customer for all the years and have analysed upon the highest number of sales as the best customer.

Upon analysing the customers with their highest number of sales amount for all the years we see that customer number 305668 has the highest sales amount of $49647.45 and is regraded as the best customer. In past 5years it could be said that these customers have purchased a lot from Broadway Café which is very good and we need to retain these customers by providing them with better service and meeting their expectations.

There are many marketing campaigns which need to be used in order to retain our valuable customers. The café should increase in its customer satisfaction and loyalty and try to understand a customers needs. The café can have a promotional activity such as rewards for best customer of the year and the best customer wins prizes. Moreover, café can offer discounts to valuable customers in order to retain those customers.

We have assumed that in order to determine the best selling product and the worst selling product we looked at the total sales figure of the best and worst types of products sold and not the units because it was a little confusing. We haven’t taken into account any value from column heading other because it is very ambiguous, it does not have dollar value so it is hard to determine whether the amounts are in terms of dollars or units. Also it has negative figures so if it is a sale amount then how can it be in negative and how to take account of it. Therefore, we have not taken any data from column heading other in calculation of all the questions above.