Prepared by Ryan Graff, Zachary Dobson, Heather Fischer, and Matthew Vercauteren In partial fulfillment of the requirements for Customer Relationship Management Marketing 445 01 December 9, 2010
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 21 st Century!
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
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
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
Competition Top Competitors JC Penny (#1) Sears Target Other Competitors Bed Bath & Beyond Shopko Old Navy Nordstrom, Inc As well as many others..
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.
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
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
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
Internet Built around customer interaction/preferences Search Bar FAQs and useful phone numbers In your face advertising Easy maneuverability Intuitive
Internet Not aesthetically pleasing! Utilizes a simple website template Simplifies the customers life and allows quick access Target customer friendly
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
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
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
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
Evaluation of the Database
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
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
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
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
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
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
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
Data Collection Recommendations Social Media Mobile Applications Online Accounts Activities Interests Hobbies Allows for customers to check according to likeness Targeted promotions
Connecting with Kohl s Janesville location Corporate contact
Customer Life Cycle Reach Acquisition Conversion Retention Loyalty
Customer Valuation Strategy Email Major vs. Minor department Reverse focus MVC adjustments Goal: Customer integration
Customer Valuation Strategy Survey In depth survey Higher level data (Interval and Ratio) Incentive Kohl s card Knowledge is power
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
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
Prospecting Customers Try a long term up selling campaign Follow the customer! Continuous purchase history Used to create a better psychographic
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