Reference no: EM132226497

Gentry's- Winning with Customer Relationship Management Read the case below and answer the questions that follow. Patricia Haverty just took over as Director of Customer Relationship Management for a regional department store chain, Gentry's. This department store chain is located in the southeastern region of the United States and operates 47 stores in 6 different states. These locations are typically in secondary markets, in cities with 50,000 to 100,000 residents. In many of these locations, Gentry's is the only department store in town. The annual sales for Gentry's are around $270 million. The primary target market for Gentry's is women between the ages of 25-55 with an average annual household income of $60,000 or more. These customers are interested in career centric fashions as well as affordable, durable children's clothing. Gentry's also has developed a private label line of clothing that has a loyal following because it is fashion forward, yet affordable and durable. Gentry's has begun to notice that although it has little competition in its immediate trade area, customers are beginning to order more merchandise online and are also driving to larger towns to shop at other large department stores. Gentry's sales are starting to decline. Gentry's knows that given the market size of its locations that it is going to be hard to recruit new customers because the towns are so small. Gentry's knows that in order to succeed and grow business, it has to retain its current customers. Gentry's hired Patricia Haverty to help develop a loyalty program for Gentry's. Patricia knows that in order for Gentry's to stay competitive, she has to build programs that encourage current shoppers to shop more often and buy more on each trip at Gentry's. Currently, Gentry's has no loyalty program. The first thing that Patricia does is develop a customer database. She compiles all the transaction information for the past 10 years. She also sends online surveys to all of the customers for which she has email addresses. To gather more information about customers, she decides to also ask sales associates to hand out surveys to customers in stores. Based on the information that Patricia gathered, she decides to develop three initiatives to help increase share of wallet and customer loyalty: 1) Patricia convinces senior management at Gentry's to develop a private-label credit card program. The marketing research suggested that customers in Gentry's surrounding locations were very loyal to the Gentry's brand. This is an opportunity for customers to develop an even stronger relationship with the Gentry's brand. Furthermore, all customer transactions can be monitored for consumers who use a private-label credit card. For customers who adopt the credit card, there will be special incentives such as Gentry Gems ($20 to use at Gentry stores for every $250 spent), special viewing nights, free gift-wrap, and complimentary valet parking during the holiday season. 2) Patricia conducts a market basket analysis with current transaction information and finds that there are several product categories that are conducive to add-on selling. For example, when women buy dresses, they often purchase shoes and accessories. Similarly, when men buy suits, they often purchase ties and dress shirts. To encourage add-on selling, Patricia develops a promotional campaign that sends out email and direct mail coupons to customers after every purchase with a discount offer for a complimentary product. Patricia also develops an in store sales promotion contest offering prizes to sales associates who increase add-on purchases for customers. 3) Finally, Patricia develops a customer categorization pyramid. One day when she was walking around in the Gentry's flagship store, she noticed that there was a woman that took up 2 hours of a sales associate's time and then did not purchase anything. She watched while other customers were frustrated and left Gentry's because they were not being serviced. While Gentry's prides itself on customer service and does not want to ignore anyone, Patricia knows that there are "lead" customers that are taking up too much of Gentry's associates' time. She asks sales associates to rank their top 10 customers, and to also identify 5 customers that require too much time and don't make any purchases, or even worse, take information and then make their purchases online through another retailer. Patricia puts this information in the customer database. She sets up special promotional campaigns for the top customers. She also works with store managers to institute a rule that sales associates spend no more than 15 minutes with difficult customers. If these customers complain, they are to be referred to a member of the store's management team. Patricia knows that it is much more expensive to acquire a new customer than to retain a current one. She also knows that in Gentry's smaller markets, it is harder to recruit new customers at all. She hopes that these investments in customer retention and loyalty programs lead to higher sales and profits over the next several years.

1. Gentry's knows that customer _________________ is a better growth option than customer acquisition.

A) transition

B) identification

C) organization

D) opposition

E) retention

2. One of the ways that Patricia hopes to continue to gather customer information is to develop a loyalty program that focuses on holders of Gentry's _____________________.

A) mailing list

B) private-label credit card

C) transition team

D) shopping pass

E) annual report

3. To encourage add-on selling, Patricia does a ___________________ to determine what products consumers purchase on the same shopping trip.

A) market identifier analysis

B) market database analysis

C) market-basket analysis

D) market-place analysis

E) stock market analysis

4. The customer that took up two hours with a sales associate and did not make a purchase, is an example of a ____________ customer for Gentry's.

A) selfish

B) lead

C) rude

D) golden

E) platinum