Customer Relationship Management
In doing this, according to Varley and Rafq (2004), magnetic cards, which can be read electronically, are given to the customers and asked them to use those cards when they made a purchase each and every time. Customers are encouraged to scan their cards in each visit to store by offering them a point along with their amount of purchase. By doing so retailers became able to understand the shopping habits of their customers as well as meet with the specific needs and changing needs and wants of the customers.
In fact customer cards enable retailers to convert raw data into learned consumer behaviour (Pine et al., 1995) and thereby as the need of the consumers have met; it increases the loyalty among the customers towards that particular retailer (Dowling and Uncles, 1997). However, the ultimate objective of issuing these cards and introduction of loyalty programs is to increase the frequency of visiting stores, customer satisfaction (Worthington, 2000) and thereby to create customer loyalty (Kivetz and Simonson, 2002). According to Roehm et al. (2002) from the early 1990s retailers are trying to use these programs and nowadays investing heavily on these programs.
In fact spending on the loyalty cards among the top European retailers is more than $1 billion a year (Strategic Direction, 2005). However, according to Strategic Direction (2005) even though retailers invest huge amount of money on the loyalty cards only a little evidence exists about whether this strategy creates loyalty among the customers. As a result it can be said that conducting a research that identifies the effectiveness of customer cards in creating loyalty would be beneficial for the companies in measuring the efficiency of their marketing instrument.
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Loyalty cards have become an increasingly sophisticated marketing strategy in recent years. Particularly retailers believe that loyalty cards are an effective marketing strategy. In recent years the top sixteen European retailers have spent over $1 billion annually on loyalty cards and similar initiatives. The reason for choosing Customer Relationship Management from the customer perspective as the research topic is because; CRM is seen as a powerful tool in recent years. Organisations particularly retailers are looking for different approaches on the way to customer and loyalty.
This is because of these businesses’ aims to improve their ability to compete with other organizations belonging to the retail industry. Two problems that haunt the businesses in the retail industry are the following: (1) products are easy to copy (2) services are harder to provide. Because of these, it is very hard to The structure of applied research shall be used in order to analytically review the different customer relationship programs and its importance to the retail industry of the United Kingdom in terms of establishing customer loyalty.
Applied research is basically concerned with the application of research techniques, procedures, and methods that form the body of research methodology as applied to the collection of information about various aspects of a situation, issue, problem or information gathered can be issued for policy formation and administration. In the same manner, these articles shall be used to support an exploratory research in order to help find the weaknesses that haunt the customer relationship management programs in the retail industry of UK, focusing on the problems and hindrances that serve as a barrier in its efforts to establish customer loyalty.
Descriptive Research Having used the techniques of applied research, this study shall also take into one of its forms, descriptive research. Descriptive research attempts to describe systematically a situation, problem, phenomenon, service or program, or provides information about, example, the living conditions of a community, or describes attitudes towards an issue. Using this particular form of research, the researcher would look into the customer relationship management programs as a whole.
It would provide information about the different programs as well as the perspectives of the customers with regard to these loyalty schemes. Quantitative Research In a study which is quantitative in nature, the researcher intends to gather data so that a valid conclusion may be arrived at regarding the outcomes of broadly comparable experiences. An objective or positivist approach is adopted by those who utilize this design. Moreover, this approach becomes more potent in the quest for universal laws which explain reality – and which lend themselves to observation.
The quantitative approach has several advantages – among them is the fact that they have clearer boundaries with regard to data gathering. While it is an advantage in itself, it does not come without weaknesses. For this approach to yield valid conclusions, the tool that is used for data gathering has to have acceptable psychometric properties. The construction of the research tool must be subjected to rigor and careful analysis. One other limitation for quantitative methods is the need to use a substantially large sample to be able to garner more valid results.