CRM and the Internet

The customer-centric retailer is different from the traditional, product focused retailer in many categories:

• They tend to operate in a network fashion as opposed to a hierarchical methodology.
• They tend to view knowledge as a more critical asset than size or saturation in building their channels’ powers.
• They view their intangible assets (information, relationships, and brand) as more critical to their business than their tangible assets (inventory and real-estate).
• They view their knowledge capital as more leveragability than their financial capital.
• They manage more effectively through collaboration than control.
• Their merchandising is customer directed, and not driven by buyers/purchasing.

Conclusion
In conclusion, the retailers that are practicing these principles are gaining from the approach in a number of ways:

Firstly, they are able to take advantage of all the channels that are available to them in the market place, instead of traditionally limiting themselves to one - or at most two - channels.

Secondly, they are able to dramatically improve customer value and loyalty through the fact that the retailer is far more accessible to the customer. In addition, the amount of information that the retailer holds on a specific individual is far more in-depth than it previously would have been. This allows the retailer to target specific groups of potential customers with the relevant marketing material.

Thirdly, the retailer that has already achieved a successful brand name will be able to capitalize on this by exploiting all of the channels that are open to it. Therefore, advantage is taken of the ability to leverage the brand assets.

Finally, what it all comes down to in the end, is that the retailer is able to improve profitability and market share. This is achieved, as the retailer is now able to target a far wider range of customers, thus opening itself up to far greater opportunities.

Stephen J. Leonard is Managing Director of PIC Solutions, the largest customer management solutions company based in the Southern Hemisphere. He has over 15 years of risk management experience in the banking and consulting industries at Chase Manhattan Bank and Fair Isaac International. He holds an AS (State University of New York), BA (University of Toronto), MBA (Adelphi University - School of Banking, New York) and is a member of the UK and South African Institutes of Credit Management.