A Few Words About Target Corporation’s Customer Relationship Management

I have discussed elements of customer relationship management with relation to Target Corporation in previous posts, like personalization of ads being sent to customers. Today, I’d like to delve deeper into the concept of CRM. 

Target has a Customer Relationship Management system which tracks all of the purchases that a customer makes in store and online.  If a person calls customer service, that person will have access to this data as well as notes from all other contacts. This is how Target effectively uses technology to enable effective customer service and to build its brand. 

What's interesting about Target's CRM system is that it is a zero latency system. This means that the second any information is put into the system, it is available almost immediately to anyone else in the system. One of the CRM system’s goals is for consumer service employees to be able to find consumers’ emails to Target and respond on the spot to their questions or concerns. 

This may sound extremely straightforward, but knowing the customer is an important part of customer service. In traditional general merchandising, the customer is anonymous. A person walks in, makes a purchase and walks out, leaving the retailer with no idea who she is. Target uses branded credit cards, has set up loyalty programs, and developed their mailing lists to know their customers better. The Internet adds additional channels to gather information. This kind of a CRM has two major benefits. 

The first advantage is greater customer satisfaction. But, more importantly, a real-time customer intelligence CRM allows Target to perform one-to-one marketing. They are able to offer exceptional value to their most valuable customers, thus increasing their value to the consumer over time, as well as the value of other customers.

By building a customer intelligence system that combines all sources of customer information – point of sale, loyalty programs, online registrations and so on – Target segments its market into customer groups of different lifetime values. It then markets appropriately to each segment. The most valuable customers are catered to so they remain loyal; the moderately valuable customers are given incentives to become more valuable; and the less valuable customers are recognized as such, so that Target won't invest more than necessary in them.

Sources:

1) Roberts, M. L. & Zahay, D. (2013). Internet Marketing: Integrating Online and Offline Strategies. 3rd Ed.  Mason, Ohio:  South-Western, Cengage Learning.