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Prepared by Ryan Graff, Zachary Dobson, Heather Fischer, and Matthew Vercauteren In partial fulfillment of the requirements for Customer Relationship Management Marketing 44501 December 9, 2010

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Page 1: Prepared by In - Weeblyheatherfischer.weebly.com/uploads/4/9/9/3/4993500/crm_kohls.pdf · – JC Penny (#1) – Sears – Target • Other Competitors – Bed Bath & Beyond – Shopko

Prepared by 

Ryan Graff, Zachary Dobson, Heather Fischer, 

and Matthew Vercauteren

In partial fulfillment of the requirements forCustomer Relationship Management

Marketing 445‐01

December 9, 2010

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Company Background

• Started in Brookfield, WI in 1962

– Max Kohl

• Sold a variety of products but specialized in 1980s

– BATUS sold shares to management investors 

• 2004: “Expect Great Things”, increasing sales

• Carriers the brands: Food Network, Simple Vera Vera Wang and ELLE magazine

• Focused on strategy to propel into 21st Century! 

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Customers

• Primary target: Middle class, married women ages 25 to 50 years old

– Preferably with children

• Mainly in control of disposable income

• High wallet penetration

• Usually in charge of store selection

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Customers

• Website is setup mainly to women

• Men’s, Kids’ and team shop located off to the right on webpage

• Feminine focused theme

– Similar to theme used in this presentation

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Competition

• Smaller national retailer, yet successful

• Can’t compete solely on price

– Exclusive brands

– Private labels

– Value to the customer

• Compete against discount stores & mid‐level department stores 

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Competition

• Top Competitors

– JC Penny (#1)

– Sears

– Target

• Other Competitors

– Bed Bath & Beyond

– Shopko

– Old Navy

– Nordstrom, Inc

– As well as many others..

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Kohl’s Marketing Mix

• Product

– Wide variety of products

– Styles cater to men, women, teenagers, mom, dads and everything in between

– Product lines: Apparel, footwear, accessories, cookware, kitchen gadgets, kitchen electric etc.

– Brands: Jumping Beans, Tek Gear, Elle, apt. 9, Croft and Borrow, Nike, Kitchen Aid, Reebok, Hawk, Dockers etc.

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Kohl’s Marketing Mix

• Pricing

– Inexpensive prices, quality products and HUGE sales. (Known as the “king” of sales promotions)

– Penetration Pricing Strategy: Lower price to capture more market share

– Large volume discounts: the more you buy, the more you save

– Seasonal Pricing

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Kohl’s Marketing Mix

• Promotion

– Utilizes both push and pull strategies

– Push strategy in TV and radio commercial

– Pull Strategy in interactive internet advertising and emails

– “Sales Force” is their to help, not push products on customers 

– Perfected Sales Promotion: promotions well known and timed by customers.

• Ex: 15‐20‐30% scratch off event, Kohl’s Cash, Pick‐a‐Day coupons, white tag events, clearance events

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Kohl’s Marketing Mix

• Distribution

– Products distributed through:

• Physical locations

• In‐store ordering kiosks and kohls.com

– Sophisticated inventory management system

• Inventory levels managed electronically by corporate

• Inventory levels can be seen across the area by any given store

• Store doesn’t handle reordering out of stock items, done automatically 

• Distribution centers across the U.S. serve its 1100 stores nationwide

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Internet

• Built around customer interaction/preferences

• Search Bar

• FAQs and useful phone numbers

• In‐your‐face advertising

• Easy maneuverability

– Intuitive

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Internet

• Not aesthetically pleasing!

• Utilizes a simple website template

• Simplifies the customers life and allows quick access

– Target customer friendly 

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CRM• Customized efforts to achieve a customer‐centric focus

• Main focus to CRM:

1.  Kohl’s Charge

• Exclusive benefits 

– 10%‐15% off after applying

– Discounts 12x a year

– Pay bill online

– “Pick A Day” coupons

– Kohl’s Cash

• MVC card holder

– Extra perks (newsletter, “pick‐a‐day savings” 6 times per year, etc

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CRM

2.  Email

• $5 coupon upon giving email address (discount as a substitute for information)

• Click on departments of interest

• Sales alerts

– Send emails based on past purchases to predict future purchase interests

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CRM

– Kohl’s Online & Kiosks

– Customer Service

• “Expect great things”

• Survey

– Return & Exchange Policy

– “Smile and Say Hi”

– E3 Manager on duty

– Other policies

• Coupons

• Item not in stock

• Reserve items

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Target Market Profiling

• Target Customer: Married women, ages 25‐50, preferably with kids

• Referred to as “her” within the company

• Kohl’s consumer data:

– 64.3% graduated college or went to college

– 40% women ages 25‐55

– 21% men ages 25‐55

– 60% have annual household income above $75,000

– 31.5% reside in the Midwest

– 79.4% own their own home and 85.1% are Caucasian 

– Media Consumption: 68% use internet heavily and 64% read magazines heavily

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Evaluation of the Database

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Customer Data Components

• Basic info: names, address, Zip codes, cell/home phone #’s, email, event related info

• Demographic info: age, gender, marital status, education level, # of people in the household, income level 

• Purchase/Transaction history: What, when, how frequently, how much money , how many items, what store etc

• Loyalty Program info: MVC program 

• Online Info: Kohl’s account, browsing habits, credit card numbers, sweepstakes, contest or surveys

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How The Database Is Used

• Identify the best customers

– Tracking customer transactions and using RFM analysis to reveal the who the best customers are

• Recruiting new customers

– Using best customer profile to select non‐customers

• Customize marketing messages

– Specific messages to specific customers with different product and service needs

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How The Database Is Used

• Cross‐selling

– Using purchase history, sell products that fit well with past purchases and lifestyle

• Making sure communication is cost effective

– Are they worth the investment? (RFM Analysis)

• Optimize Promotional Results

– Efficiently promote to customers based on needs and wants

• Personalize Customer Service 

– Based on product and service needs and known feedback

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Strengths

• Extensively data driven

– Customized and superior decision‐making

• Use of analytics

– Predict

– Analyze

• Customization

– Bases offers for each customer on purchasing habits

– Used to predict what offers customers are more likely to respond to & stock accordingly

– Example: discounts for a customer’s birthday

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Strengths

• Optimization 

– Lifetime Value

• MVC Kohl’s Charge

– “the biggest spenders”

» targeted for special promotions, additional discounts, etc.  

– Detailed history of the customer’s purchases, therefore leading to easy returns.  

– “No receipt? No problem!”

– Planning and buying 

• What they want, when they want it

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Weaknesses

• Unclean data

– Example: policy to honor a coupon for Kohl’s Charge customer based solely on the customer’s word

• Data used for Kohl’s email campaigns

– “Wasted reach” 

• Fake /multiple email accounts

• Continued to be sent to people, even those who have not spent money at Kohl’s recently

– Not taken into account

• High‐profile analysts needed to manage database

– Complex & high volume of information

– Training extensive

• Customization 

– Integration with other applications & programs

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Suggested Improvements

• Data used for the email campaigns

– Identification number on Kohl’s Charge

• Linked with their personal profile.

• Time

– “Active” vs. “Inactive”

• Market accordingly

• If never “clicked‐through” a promotion

– Hold account

– Not validate email address

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Data Collection Recommendations

• Social Media

• Mobile Applications

• Online Accounts

– Activities

– Interests

– Hobbies

• Allows for customers to check according to likeness

• Targeted promotions

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Connecting with Kohl’s

• Janesville location

• Corporate contact

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Customer Life Cycle

• Reach 

• Acquisition

• Conversion

• Retention

• Loyalty

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Customer Valuation Strategy Email

• Major vs. Minor department

• Reverse focus

• MVC adjustments

• Goal: Customer integration

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Customer Valuation StrategySurvey

• In depth survey

– Higher level data (Interval and Ratio)

• Incentive

– Kohl’s card

• Knowledge is power

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Customer Contact Strategies

• Mobile

– Brand new

– Increase in web page sales

– In Kohl’s only brand focus

• Television and Radio

– Two 30 second national TV spots

• Dancing with the Stars, Grey’s Anatomy, CSI, Survivor and Modern Family.

– 15 and 30 second TV spots

• Focus on value

– 15 and 30 second radio spots

• Ryan Seacrest, Billy Bush, John Tesh and Lia

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Prospecting Strategies

• Use email and direct mail!

• Use social media

– Facebook, Twitter, LinkedIn and Youtube

• 500 million users on Facebook alone!

– Potential customers?

• Utilize Twitter more effectively

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Prospecting Customers

• Try a long‐term up‐selling campaign

– Follow the customer!

– Continuous purchase history

• Used to create a better psychographic

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Conclusions and Recommendations

• Customer centric

– Providing value

• Extensive database

– Data analysis infinite

• Continue Kohl’s Charge efforts

• Continuing effort of social media exposure

– Real time marketing