Customer Relationship Management Systems
Progressive momentum in business environments has created a niche market for the use and need of information technology. There is an increasing need to integrate information technology applications such as customer relationship management systems and business intelligence into businesses practices to gain a better understanding of the customer’s needs, wants, and behaviors in order to better serve them. That is exactly the purpose of an effective customer relationship management system. By acquiring information of customers, business intelligence is achieved. Business intelligence is defined as the knowledge about your customers, your competitors, your business partners, your competitive environment, and your own internal operations that gives you the ability to make effective important and often strategic business decisions (Cummings & Haag). This paper will aim to identify the need and use of a customer relationship management system, as well as business intelligence, in the goal of recognizing customer preferences. It will go on to illustrate how effective systems, such as those above-mentioned, have been successful in maintaining customer loyalty through the information obtained. The first article chosen deals with the issue of implementing a customer relationship management system in an ice cream shop. The second article illustrates how the proper use of a customer relationship management system has positively affected the business of a popular casino.
According to the article “From Gooey Designs to GUI, IT Helps Ice Cream Chain Deliver”, Cold Stone Creamery was established 10 years ago and has over 1,200 stores currently operating. The establishment, mostly comprised of franchisees, plans to open an additional 400 stores within the next year and has forecasted revenues of $425 million in the year 2005. They pride themselves on their many “creations”, combinations of ice cream and mix-in ingredients used to make unique desserts, made by previous customers. The current Chief Information Officer, Sandy Bell, has indicated that the chain lacks customer relationship management and an efficient system to gather information such as new creations. The article indicated that the chain currently has a Point of Sale (POS) unit which she states does not fulfill the needs of the corporation. “When we programmed the POS, we didn’t go into the details of the type of creationâÂ?¦We are limited in the knowledge of what is being ordered by whom,” states Bell, specifying; however, that the system does record the item’s size. This system has provided information as to the number of gallons of ice cream it uses per day, but does not show how the ice cream is being used to create certain desserts. Having more sophisticated intelligence such as the combinations its customers prefer would help the company plan for the ordering of supplies, market incentives for purchases, and price items in line with supply and demand.
Bellhas recently nominated 3 information technology priorities for the ice cream chain: POS upgrades, a new customer relationship management package, and Cold Stone gift cards and loyalty cards. All of which aim to gather information pertaining to customer preferences and maintain customer loyalty.
Harrah’s Casino is an extremely profitable casino that uses information technology in the form of efficient customer relationship management to gather information and preferences on gamblers to maintain customer loyalty. They have become so successful in their system that they have proven to be the industry leaders in customer data mining. According to the article entitled “Against the Odds” written by Kim Clark, they have developed a program through a Total Rewards card that the casino offers to track everything from the customer’s gambling transactions to the dinner that the gambler consumes in the restaurant of the facility. The information gathered by the use of Total Rewards card can be used to tailor offers and freebies to lure the player back. The article stated that studies have shown that a first-time gambler who loses at a casino is unlikely to return. The data gathered by the Total Rewards cards will show this unfortunate first-time experience and prompt a manager to send a “Luck Ambassador” over to the gambler to offer a consolation prize. This is done in hopes of leaving a positive impression on the first-timer to return in the future. A multitude of other incentives such as free dinners and room stays are also offered based on frequency of visits and amount of money played. This system has worked positively for Harrah’s and has subsequently caused other casinos to mirror this image by offering rewards cards of their own.
I chose each of these articles because I am interested in customer relationship management. I feel that customers are the biggest assets in businesses. If the customer has a bad experience with a company, they have the ability to spread the word. On the flip side, if the customer has a positive experience, they also have the ability to spread the word regarding the excellent service received, discounts, etcâÂ?¦Positive customer feedback can only benefit the business. This system has the ability to store customer preferences so the customer will be uniquely identified and catered to. This will produce a positive experience by having special insight into what the customer wants. Customer relationship management should be higher on the priorities’ list of business; however, it is still young on the market with potential to grow.
Both of these articles have brought up the important issue of customer identification. Although Cold Stone Creamery does not currently have an effective customer relationship management system, it recognizes that it would highly benefit from such a system in place. Harrah’s has been a highly influential business in instilling a customer relationship management to gain information of their customers. Their system has been very effective and has, thus, translated into positive business intelligence. The casino has knowledge about their customers and can cater to their needs based upon the results of the Total Rewards card program. Although in drastically different realms of industry, both of these companies have demonstrated the need for and benefits resulting from having such a valuable system in place. Businesses such as grocery stores and other specialty shops have adopted a similar system to keep track of their customers. Albertson’s, for example, has a Preferred card which allows customers to enjoy discounts. This card is scanned every time a customer purchases items and the data is stored in a central database to maintain individual customer information. This system will keep track of customer purchases to offer more individualized service. For example, the store dispenses additional discount coupons that can be used at a future date when a customer goes through the checkout line. The customer relationship management system will track past customer purchases to designate which coupons will be dispensed.
I have signed up with businesses that offer such cards because I feel that the discounts are valuable and I like receiving periodic offers in the mail regarding special sales. I currently have an Albertson’s Preferred Card, a Harrah’s Total Reward’s Card, and a PetCo Pals card. If Cold Stone Creamery were to offer a similar card to track my purchases and offer me certain discounts, I would be at the front of the line. An efficient and effective customer relationship management system will positively benefit both the customer, by offering individualized service and discounts, and the business, by supplying information of their customers to better serve them and, consequently, instill customer loyalty.
Works Cited
Clark, Kim. “Against the Odds.” U.S. News & World Report 23 May 2005: 46-53.
Schuman, Evan. “From Gooey Designs to GUI, IT Helps Ice Cream Chain Deliver.” Eweek.com 22 September 2005. 6 October 2005 www.Eweek.com
Cummings, Michael and Stephen Haag. Information System Essentials, 1st Ed. New York: McGraw-Hill/Irwin, 2006.
