Advantages of CRM for Retailers

(1)       Customer Retention and Loyalty : CRM helps in improving customer retention and loyalty. The customer will spend longer periods at the retail outlet and buy more products, which can result in long-term value.

            (2)     High Customer Profitability : CRM will help in generating high customer profitability through a steady flow of customer purchases from the same retail outlet. Retailers adopting CRM are able to generate higher revenue and profits. Effective CRM programme increase perceived value of the products in the customer’s eyes. It will not only help in repeat purchases, but also increases the scope of cross selling and up selling. Cross selling is the purchasing of complimentary goods by the buyer. Up selling is selling more of higher value goods to the customers.

(3)     Reduced Cost of Sales : CRM can result in reduced cost of sales as existing customers will be more responsive and active.

            (4)     Low cost of retaining old customers :  The cost to attract and retain customers is lowered due to customer loyalty. According to an assessment, attracting new customer can be 5 to 10 times more expensive as compared to retaining old customers. This is based on calculations of expenses incurred on prospecting, advertisements, sales promotions, free samples, administration and database management.

(5)     Customer Satisfaction : CRM aims at less customer problems. CRM improves quality of services provided to customers, thereby enhancing satisfaction of customers.

(6)     Improved Employee Productivity : CRM results in improved employee productivity since there is smooth flow of work. If is easy to cater to the demands of the existing regular customer.

(7)     Micromarketing : CRM helps in micromarketing due to the availability of better and detailed information about customers.

(8)     Business Performance Visibility : There is better visibility of business performance and more correct sales forecasting.

(9)     Development of store as a brand : The retailers should try to develop store as a brand, by looking beyond immediate customer satisfaction. Retailers should create an emotional bond with customers by offering them simple to use services.