Customer Relationship Management Plan for Parcel Force Worldwide - Case Study Example

Relationship Management Plan for Parcel Force Worldwide Introduction In today's competitive market environment, effective brand management becomes imperative in enhancing market share and to attain sustainable growth. To compete with the market leaders and gain competitive edge, companies all over the world are using Customer Relationship Management (CRM) as an effective tool. In the modern competitive and turbulent market, companies have to retain their loyal customers and also have to attract brand switchers. According to the online survey conducted by a New York-based consulting service firm, 67% of respondents reported switching companies because of poor customer service (Beal, 2008). In the long run, they have to convert the brand switchers into their own brand loyal. To meet this objective and to retain the loyal customers, relationship marketing is believed to be of immense help to firms. The effective use of CRM will ensure customer loyalty and convert them into lifelong consumers of the product. CRM is one among the many steps of customerization. The focus of CRM is to establish relationship with customers on an individual and personalized basis and then to treat different customers differently based on their expectations. CRM is the key to success in the present era and it has become the order of the day that customers are given personalized attention and only those organizations can succeed who have been able to build a base of their loyal customers. As per estimate, the cost of affecting a new customer is five times more in comparison to making an existing customer happy. In the present report, an attempt is made to prepare a CRM plan and discuss how effectively it can be used to attain more customer base and support. Parcel Force Industry, a U K based parcel company is the firm discussed in the report. Customer Relationship Management Plan Company Profile-Parcelforce Worldwide Parcelforce Worldwide is a leading provider of guaranteed express deliveries. The company has been serving it loyal customers for over 14 years, which provides a vital link for British businesses needing to send express shipments internationally and in the UK. Parcelforce Worldwide is the trade name of the Royal Mail Group. The company is being driven by its commitment and dedication to serve the customers by delivering the high quality services for over 30,000 customers across the country. Over the years there have been many changes in the company's environment- internally, externally and internationally. Many competitors have come up by posing threats and thereby prompting the company to deliver high quality services to the customers. Over the last few years parcel industry in the U K has been transformed into a stage where the customers have many choices to get their goods/ materials reached the desired points. This competitive situation made the company to rethink about its approach of marketing and attitude towards consumers. Now the company is striving to attain more loyal customers by delivering high quality services at fair and reasonable price. Executive Summary Because of the development in the parcel industry in the UK and mushrooming of many new players, the business of existing players including Parcelforce worldwide has been affected drastically. Moreover, the switch over of firms from conventional product oriented approach of marketing to customer oriented approach has compounded the situation worse than ever before. Companies have realized that those with less attention to customers are likely to lose customers and eventually lose business. This tendency among the major players tempted them to adopt a new approach of marketing. They have been, rightly mentioned, forced to change over to more customer-centric marketing strategies. In this context, the present report examines how Parcelforce Worldwide can introduce Customer Relationship Management as its new marketing strategy. The report further addresses various key issues that the firm should take care of in the implementation of CRM as a means to achieve more market share. The report is essentially meant to locate the major problems of Parcelforce worldwide and formulate marketing strategies to solve them keeping in mind CRM as the new approach. Vision, Mission and Corporate Objectives Every organization is guided and driven by its values and aims for which it has been established. The aims or end results might be formally written or understood by the conduct and culture of the organization. These end results or rightly called the aspirations may be expressed in different ways such as vision, mission and objectives. However, what mostly matters is how well the firm is striving to materialize those aspirations. Firms frame various strategies and policies at different functional levels in line with the overall objectives. Parcelforce worldwide is also looking forward to construct a new marketing strategy in its effort to retain existing customers and attract brand switchers. Here also, the strategies are formulated in line with the firms overall objectives, which are explained below: Vision The vision of Parcelforce Worldwide is 'To be the UK's most trusted worldwide express carrier' (Overview and key facts) Mission Statement "Give our customers what they want at the right place, on time and right first time." (Judges Line up) Corporate Objectives "At Parcelforce Worldwide, we realize that we're delivering more than parcels. We're also delivering a commitment to you and your businesses" (Company History) 4. Situational Analysis Collective Analysis is a generic term comprising of various analytical tools such as market analysis, SWOT analysis, and financial analysis and so on. It may be defined as the performance of a set of analysis with the help of current information so as to enable the firm to frame strategies for the firm. It is a body of information that describes the firm's current products and services, its mission and values, the target customers served by the firm, feedback from existing customers, and external environmental forces that influence or have the potential to influence the firm. It is necessary because it is not feasible to plan effectively, or imagine a future that is both desirable and possible, without a clear understanding of the current reality in which the firm exists. Conducting a Situational Analysis can be a worthwhile undertaking in its own right, simply to raise everyone's awareness and understanding of the current reality, but it is absolutely necessary as a foundation for developing a strategic plan. Situation Analysis of Parcelforce Worldwide is discussed in the following paragraphs: 4.1 Macroeconomic analysis The macro economic environment of Parcelforce comprises of factors that are very distant to the firm, but they have a bearing upon its decisions and functions. The macro environmental factors affect all the firms in the industry in a particular country alike. As far as Parcelforce is concerned, the macro environment consists of common factors that affect all parcel companies in the UK mare or less in the same manner. A detailed discussion of the macro factors of Parcelforce worldwide is made below: PESTILE ANALYSIS Variable Construct Effect on the Company Political Trading policies Funding, grants and initiatives Home market lobbying/pressure groups International pressure groups Wars and conflict Government policies Government term and change Elections Inter-country relationships/attitudes Political trends Governmental leadership Government structures Internal political issues Economic Current economy situation/trends Overseas economies and trends General taxation issues Taxation changes specific to product/services Market and trade cycles International trade/monetary issues Exchange rates Tariffs Import/export ratios Production level Socio-Cultural Consumer attitudes and opinions Law changes affecting social factors Major events and influences Buying access and trends Ethnic/religious factors Ethical issues Demographics (age, gender, race, family size,) Lifestyle changes Population shifts Education Diversity Immigration/emigration Health Living standards Housing trends Fashion & role models Attitudes to people doing certain types of work Leisure activities Occupations Technological Competing technology development Research funding Associated/dependent technologies Replacement technology/solutions Maturity of technology Information and communications Consumer buying mechanisms/technology Technology legislation Technology access, licensing, patents Intellectual property issues Global communications Inventions Innovations New discoveries Research Energy uses/sources/fuels Communications Rate of obsolescence Health (pharmaceutical, equipment, etc.) Manufacturing advances Information technology Internet Transportation Bio-tech Legal and Regulatory Current legislation home market Future legislation European/international legislation Regulatory bodies and processes Environmental regulations Employment law Consumer protection Industry-specific regulations competitive regulations Ecological and Environmental Ecological Environmental issues International National Local Environmental regulations Customer values Market values Stakeholder/ investor values Staff attitudes Management style organizational culture Staff morale Staff engagement Global factors (Source: The Environment Scan) 4.2 Industry Analysis Industrial Analysis is necessary because unless the firm is able to understand and analyze the industry to which Parcelforce belongs, no external analysis is possible and CRM strategy cannot be framed and implemented. The UK market for courier industry has a steady growth since 2000. Among the five major players DHL International (UK) Ltd is the market leader with 17% share attained in the year 2004. The other players include United Parcel Services Inc., Federal Express Corporation, Tpg N.V. Considering the forecast about the sector, "courier is expected to be the largest sector accounting for 61% of the market in 2009, reaching sales of 40 billion" and among the present players Express Logistics is going to acquire majority of market by registering a growth of 24%. To take the advantage of likely growth in the industry, all players will look forward to gain new customers and retain existing ones. The industry analysis is incomplete when all the factors affecting the courier industry in the UK are not considered simultaneously. To get an overview of the factors affecting the firm internally and externally, a Telescopic Observational Analysis is carried out. T Technological Advancements E Economic considerations L Legal and regulatory requirements E Ecological and environmental Issues S Sociological Trends C Competition O Organisational Culture P Portfolio analysis I International Issues C Cost efficiencies and cost structures Internal Environmental Strengths Wide use of internet and email has helped the industry in taking orders and communication with customers/clients The stable and regular profitability and sound financial condition Comply with all employment , safety , health and other legal requirements Royal Mail supports Tsunami appeal 04/01/2005 Royal Mail Group plc today pledged 50,000 to the Disasters Emergency Committee Tsunami Earthquake Appeal. Royal Mail Group Launches Health And Lifestyle Assessment Services For Its People 07/03/2008 Royal Mail provides a 'universal service' for the UK, as defined by section 4 of the Postal Services Act 2000. Royal Mail remains the dominant operator of the national post and continues to provide the UKs universal postal service Royal Mail has unveiled a stylish and up to date new uniform to take the company proudly into its next phase of modernisation. Royal Mail is highlighting its expertise and comprehensive suite of products which can assist and add value to marketing propositions through a new direct mail campaign. More reliance on modern parcel delivery and mail system Royal Mail's prices are regulated by Postcomm. Weaknesses The pace of technological advancement cannot be seen in other part of the business operations. Employees may ask for more reward and other payment packages VAT registration Lack of uniformity in the preparation of Environmental Reports couriers are usually more expensive than usual mail services External Environmental Opportunities Use of computers and internet has reduced the customer order and query processing time European Commission published a draft Directive to establish common rules for EU postal services and improve services standards Royal Mail unveils additional delivery plans for Christmas, The first time ever, customers looking to buy a protection plan can do so over the counter at all 12,500 UK Post Office branches, removing the need to wait for an application to be processed and giving instant peace of mind. Threats Many of the customers are switching over to paperless communication and the increased use of email has reduced the number of mail delivery The recent slow down of UK economy has affected all industries and businesses more or less similarly The recent legal requirement to commence all communication through email by exporters and other businesses. The Postal Services Act 2000 established Postcomm, the Postal Services Commission, as the regulator of postal services providers in the UK Increased demand for paperless communication to protect the environment From January 2006 the UK postal services market is fully open to competition. Competition, both among couriers and with the big five, has greatly increased the quality and professionalism of the industry, while also ensuring reasonable rates for customers. Post Office offers over 50s instant protection over the counter Global economic crisis and eventual downturn of global business. Companies analyze the cost of service to engage an on-board courier versus the "cost" the company will realize should the product not arrive by a specified time (i.e. an assembly line stopping, untimely court filing, lost sales from product or components missing a delivery deadline, organ transplants). O Organisational core competencies and capabilities B Buyers S Suppliers E Electronic commerce R Resource audit (including capita structure) V Value system A Alliances (including partnership networks & joint ventures) T Total quality management I Industry key factors for success O Oganisational structure N New entrants S Substitute products and services Misc. Internal Environmental Strengths Enjoying monopoly over national postal service even after liberalization in 2006 Govt. is a larger buyer. Other buyers include business organization, individuals etc. Online account opening and B2B and B2C is possible Barcodes are being extensively used in the courier industry. It enables track & trace which is a value added service facilitated by leading courier companies monopoly over national postal service even after liberalization in 2006 speed, security, tracking, signature, specialization and individualization of services, and committed delivery times The improvement in competitor products and services will provoke the firm too Weaknesses Management of unnecessary and anonymous mails and messages Anywhere Same day Couriers are the specialists in same day courier collections from Warrington, Manchester and throughout the UK. External Environmental Opportunities Popularity of intermit and email and increases use of email to book parcel services The UK market for courier services will increase by 27% between 2007 and 2011. Threats Liberalisation has opened up the market for new players. FedEx Freight, a subsidiary of FedEx Corp. introduced a new online shipping service. UPS also announced the release of trade management tools, aimed at helping shippers better manage their customs clearance online Five major players in the industry such as, DHL , United Parcel Services Inc., Federal Express Corporation, Tpg N.V., Internal Analysis Internal Analysis is made to identify the factors which can be used to take advantage of the opportunities and avoid the threats arising from the external environment. Marketing Objectives The customers were being acquired from the target segment using tools and techniques developed for mass marketing. But in present era of Liberalization, Privatization and Globalization (LPG) the existing mass marketing tools have proved to be ineffective. So has emerged CRM, which is a natural extension of market segmentation and the competitive necessity makes it essential to focus on specific market segment where organizations can demonstrate distinctive competence and in which they can create sustainable competitive advantage. The fundamental steps to effective CRM may be stated as: -Understand your customers - What products and services they buy -What are their needs and behavior - What is the level of current and potential profitability Align the organization's capabilities to better deliver appropriate value to each type of customer. The purpose of CRM is to improve the quality as well as quantity of market share. While it is good to keep all customers happy, there is a time to say goodbye to some customers when they no longer fit a company's business model. Ideally, the whole idea of CRM is to be decisive. It's not about let's just making everybody happy. Shareholders want the good customers, and that's the great value that CRM brings. CRM technologies are also designed to help identify the appropriate channels to lower the cost of servicing lower-value customers. Implementation of CRM Modern firms are implementing CRM as panacea for many of their marketing problems. Any firm would have such a customer base that it would not be able to monitor manually and find out various customer buying trends and patterns. So it is essential to attract, retain and grow customer base with effective management of the information about the customers and enhance the relationship with them. This is where CRM comes in force. The various broad heads into which a one has to look into while evaluating the need for a CRM are: Who are the customers and what information do one should have about them to find out about their needs and requirements Who are the profitable customers and what are the profitable products Are the customers satisfied with the services and products and what more one can offer them based on their behavioral pattern Which are the most profitable and in-demand channels of customer interaction Who are the most loyal customers and who are the prospective customers CRM Strategy The firm has to decide on the strategy or pathway to go ahead with CRM. Here two major issues must be addressed: The need to approach CRM in a strategic and systematic manner and the need to understand what constitutes CV. For this purpose a strategic framework has been developed to help clarify CRM functions, to fit it within the organization and optimize its use as a strategic management approach. This framework is comprised of the following inter-related cross functional processes. They are: Strategic Development Process Where the firm is and what do the firm wants Who are the firm's customers and how are they segmented Value Creation Process How should the firm create and deliver value for its customers How to maximize life-time value of customers whom the firm deals with Multi-Channel Integration Process What are the best ways to communicate between the firm and the customers What is the picture of an outstanding customer experience at an affordable cost, like Information Management Process How should the firm organize information on customers How to replicate the mindset of the customers Performance Assessment Process How to create increased profits and shareholder value How to set standards, develop metrics, measure results and improve performance Conclusion What today's customer expects from the company is no longer confined to efficient and effective delivery of quality products. They desire a stimulating and memorable "Experience", anything that touches the heart and dazzles their senses. The essence of CEM lies in not what you communicate to the customer but what he/she takes out or for that matter perceives out of the sum total of brand activities. It requires aligning the whole organization behind the customer proposition and creating an environment which facilitates delivering a branded customer experience. Functional features and benefits are gradually losing appeal. It's all about creating an unprecedented experience. CEM attempts to understand the life cycle of the consumer and what they want from the brand to fit into the consumption situation. It combines analytical and creative which helps in developing long and profitable relationships. Learn from your customers; treat them as VIC's (Very Individual Customers) rest is assured. Great experiences will send your brand to consumer's heart, not just to their minds. That human and emotional customer connection is a key part of the journey toward truly loyal relationships. Work Cited Beal Barney (2008).Customer privacy a serious challenge for marketers: CRM News: Sesrch CRM.com. Viewed 19 December, 2008 Business Wire (2007). The UK Market fir Courier Service Will Increase by 27% between 2007 and 2011. Business Service Industry. Bnet.com. Viewed 22 December, 2008 Company History. Our Aims: Our Company. Parcelforce Worldwide. Viewed 20 December, 2008 CRM. The Next Wave of e-Business. ALeNet CRM Consulting Services. Alnet.com. Viewed 19 December, 2008http://www.alenet.com/doc.phpmenu=2&item=10 Cruickshank Brett. Welcome to CRM Strategy Web. CRM Strategy. Viewed 20 December, 2008http://www.crmstrategy.com.au/ Judges Line up. Judges line up for Parcelforce small business awards. Viewed 20 December, 2008 Overview and Key Facts. Vision. Parcelforce World wide. Viewed 20 December, 2008 Payne Adrian (2006). CRM: From Strategy to Implementation- How to maximize its potential (audio seminar). Archived Webcast. Viewed 20December, 2008 The Environment Scan. Pest Analysis Template. PEST Analysis. Rapidbi.com. Viewed 20 December, 2008http://www.rapidbi.com/created/the-PESTLE-analysis-tool.html Warrington Courier. Anywhere Same day Courier. Anywhere.ltd.uk. Viewed 22 December, 2008 Read More