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CRM is an iterative process that turns customer data into customer loyalty through four sequential activities shown in the CRM Model (Exhibit 1).

Exhibit 1: CRM Model

CRM is quite a new phenomenon in retailing industry. It is only big retailers who have installed CRM systems to identify and track customer purchases and take appropriate management decisions, especially on managing customer relationships. Now, organized retailers like Big Bazaar, Westside, Shoppers' Stop, etc., have started concentrating on providing more value to their valuable customers using targeted promotions and services to increase their share of wallet, i.e., the percentage of the customers' purchases made from these retailers with these customers. Almost all of them have started Loyalty Programs, i.e., frequent shoppers program in order to reward the existing customers. These programs help the retailers in increasing the number of footfalls as well as enhancing their sales revenues and profits. For example, Shoppers' Stop, one of the leading apparel retailer in India, had net sales of Rs. 1.6 Billion, increasing net profits by 96% with the company's loyalty program, First Citizen Club (a CRM program) accounting for 63% of the sales. (Source: Economic Times, August 12, 2006).

Conclusion

This is to conclude that the organized retailing in India is progressing towards a tough competitive environment where only those retailers would survive who can understand their customers and develop a strong bond with them by developing and implementing appropriate CRM strategies and programs effectively. In the time to come, CRM is going to be the most dominant marketing tool to enhance the overall retailer performance.

Concluded.

Mujib-ur Rahman is currently a faculty member at Department of Management Studies, B. S. Anangpuria Institute of Technology & Management, Faridabad.