Marks and Spencers – Customer Relationship Marketing

A key aspect of customer relationship marketing (CRM) is building up a strong sense of trust and respect between the business and, the most important stakeholder, the customer – and aims to increase sales from retaining customers rather than constantly penetrating the same market over and over again. This is an approach that has worked well for Marks and Spencer (M&S), the retailer. According to a YouGov survey, commissioned by the marketing agency Baber Smith, M&S continues to be Britain’s most trusted retailer for the second year in a row; what generates such trust has been identified as having a good reputation.

So how has M&S gained such success in their CRM? Much of it is down to a consistent own-label product range – and not an older, middle-class market segment. M&S has become a market leader in semi-prepared, own-brand dishes that have been supported through high-profile ‘above the line’ TV advertisements. This means the ill-conceived perception that ‘own-brand equals inferior’ has been broken down, increasing their reputation and thus boosting trust. Moreover, all retailers have direct contact with their customers and can use management information systems, using data from loyalty cards and direct feedback, to match their new product development to consumer needs. Consequently, own-brand labels have become differentiated by tapping into unfulfilled niches – something Woolworths, critically, failed to do.

Now there is no point in building trust if it is not exploited (while marketing is supposed to heighten the customers experience, this, controversially, needs to be done profitably). According to the same YouGov poll, 26% of respondents said the financial sector – banks, building societies and funds – would be no better, or even worse at looking after their money than supermarkets, who have diversified into financial services. Hence, M&S’s good reputation may aid their diversification strategy and therefore overcome the branding issues of food association when entering financial services, where trust among consumers is vital. Although much of the success of M&S Money and Insurance could be credited to the poor PR among the financial sector, effective CRM means customers of own-label foods are more likely to try other own-brand services. Ultimately, the fundamental goal is achieved: increased sales revenue.

But – given the introduction of the CEO Marc Bolland – change is inevitable; M&S has recently started to introduce more non-own brand labels and begun to compete on price. Within the Marketing Mix, ‘Product’ is M&S’s strength, which has been supported through premium price strategies. Perhaps this new direction will undermine their consumers’ trust…

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  1. Re: Marks and Spencers – Customer Relationship Marketing « Manifested Marketing
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