Best Buy’s Consumer Relationship Management System

Abstract

The objective of this report is to identify the challenges that Best Buy’s customer relationship management system faces and advice on the steps that the company can take to resolve the problems. Best Buy is renowned for selling consumer electronics worldwide. The company has a unique customer relationship management system for each regional market. The systems do not allow Best Buy to consolidate their data. As a result, it is hard for the company to establish an omnichannel that can help it to offer excellent customer experience. Best Buy requires investing in a CRM system that can centralize its data points. The system would not only enable it to reach many customers but also have a big picture of the global market. Consolidation of data points would enable the company to understand customer needs and offer outstanding consumer experience.

Challenges in Consumer Relationship Management System of Best Buy

Customer relationship management (CRM) systems are critical to the success of organizations. They enable businesses to interact with current and prospective clients. According to O’Heir (2012), customer relationship management systems assist companies to evaluate the history of customers, enhance their relationship with clients, and boost sales. O’Heir (2012) holds, “One important aspect of the CRM approach is that the system compiles information from a range of different communication channels, including a company’s website, email, telephone, and live chat among others” (para. 6).

Customer relationship management systems enable organizations to understand their target audiences. As a result, companies can devise effective ways of meeting the needs of the target market. Bose (2011) holds that the sole purpose of installing a CRM system is to automate marketing, sales, and customer support. A customer relationship management system gathers consumer data via numerous sources and relay it to the management. The managers use the collected information to make sound decisions. Additionally, the system helps to bring together various stakeholders for the efficient management of an organization. Unfortunately, not all organizations can implement CRM systems. One of the companies that encounter challenges with their CRM systems is Best Buy.

Case Study of Best Buy

Best Buy was established over 40 years ago. The company started with two stores. Currently, Best Buy has over 1,300 stores across the globe. Buttle (2013) claims, “The emergence of multi-channel experience for Best Buy has posed many challenges over the years, particularly for a company driven by innovation and growth” (p. 34). Best Buy specializes in the sale of consumer electronics. The company has struggled to meet consumer needs for decades. Buttle (2013) argues that Best Buy is among the companies with the weakest customer relationship management systems. According to the company’s director of consumer tracking analytics, Best Buy endeavors to establish strong customer relationships.

Unfortunately, the company has not managed to come up with technological means of determining the factors that influence consumer behavior. Consequently, Best Buy encounters challenges in predicting improvements that may result in lasting customer loyalty. Additionally, the company is unable to evaluate its progress. Buttle (2013) claims that Best Buy has not managed to create a seamless customer relationship management system that can enable it to determine how its interaction with clients promotes customer loyalty. The current system does not “measure the value of each element of the customer experience” (Buttle, 2013, p. 56). Thus, it is hard for Best Buy to gain a deep understanding of consumer buying behavior. Moreover, the company cannot determine the success of its effort.

Problem Identification

Today, organizations, as well as business press, discuss the significance of managing customer relationships. Organizations are investing heavily in computer systems that help to enhance customer relationship management. The systems enable organizations to gather and evaluate information about their target markets. Bose (2011) holds that customer relationship management is paramount. It determines how clients relate to companies. Excellent customer relationship management contributes to the success of the business. Thus, it underlines the reason many companies continue to invest in customer relationship management systems. Best Buy is among the firms that have invested in CRM system. The company hopes to use the system to enhance customer relationships and boost sales across the globe. Nevertheless, Best Buy is yet to exploit the potential of a customer relationship management system wholly. Numerous factors contribute to the current underutilization of the customer relationship management system at Best Buy.

According to Bose (2011), the unification of data points is critical for effective customer relationship management. Organizations require having a CRM system that can support the centralization of customer data. Best Buy encounters challenges in coalescing customer information. The company is yet to have a client relationship management system that brings together information about clients in different countries. Chen and Popovich (2010) maintain that each of Best Buy’s customers “remains a mysterious card swipe or unknown, despite expensively transacting with the brand” (p. 679). Consequently, there exists a significant gap that consumer service representatives ought to bridge before the company can offer effective customer relationship services. Currently, the company is unable to provide services that clients can memorize for a long time.

Bose (2011) alleges that Best Buy’s customer relationship personnel do not have adequate experience to promote the success of CRM system. Bull (2010) believes that there is a need to enlighten the staff on their role in the creation of excellent customer experience. An organization may have a unique CRM system but fail to realize its benefits. Individuals responsible for the management of CRM systems must appreciate their roles. Besides, they have to understand the progression of present-day clients. Best Buy is yet to learn and meet all the needs of its target customers. Hence, the company’s brand does not offer a steady customer experience. Besides, the company’s CRM system does not involve clients in resolving current challenges. Bull (2010) holds that customer relationship management entails working with customers to solve problems and satisfy their needs.

Technological advancement has enhanced communication between customers and businesses. Today, customers use multiple channels to communicate with organizations. Thus, companies have a duty to ensure that they avail of the necessary channels to support effective communication. Bull (2010) argues, “Internet revolution has widened consumer’s reach and endowed them with the power of choice” (p. 597). Sadly, Best Buy is still grappling to acclimatize to the great rate at which clients are shaping their preferences to correspond with the corporation. The company is yet to incorporate new ways of communication into its customer relationship management system. Best Buy should embrace channels like “click to chat” to enhance customer relationships.

Statement of the Problem

Best Buy encounters challenges in creating a multi-channel customer relationship management system that would facilitate the coalescing of consumer information. The company has not managed to unify its data points.

Possible Cause of the Problems

Numerous factors may contribute to the inability of an organization to create an effective customer relationship management system. One factor that has contributed to Best Buy not having an efficient customer relationship management system is the inability to merge the data points across the globe (Jayachandran, Sharma, Kaufman, & Raman, 2007). The company has not centralized its consumer data. Thus, it is hard to monitor and meet the needs of customers globally. Another factor that has contributed to challenges in Best Buy’s CRM system is poor experience amid the customer relations personnel. The staff does not use CRM system to engage customers in addressing their problems. Communication between organizations and customers is paramount. It would be hard for an organization to manage its customer relations without constant communication with clients. Best Buy is unable to utilize its CRM system due to ineffective communication with clients. Employees use multiple channels to communicate with organizations. However, Best Buy’s CRM system does not support all the available communication channels. Thus, the company is unable to adjust to the pace at which customers change their modes of communication.

Possible Scenarios

Failure to utilize a customer relationship management system effectively may have many repercussions. The best-case scenario is that Best Buy may be unable to identify changes in consumer behavior. Such a case would affect the company’s competitive advantage. Chen and Popovich (2010) posit that for a company to be competitive, it must keep tab of the consumer behaviors. The ability to identify changes in consumer habits helps to predict future needs. As a result, business can prepare to meet the needs in advance. The likely case scenario is that Best Buy would lose a significant market share. Besides, the company’s profit would go down due to its inability to meet customer needs. Customers prefer to do business with organizations that are conscious of their needs (Jayachandran et al., 2007). The customer relationship management system should help an organization to contact clients, understand their needs and make an effort to satisfy them. It makes customers believe that an enterprise is conscious of their wishes. A poor customer relationship management system cannot help a business to understand customers’ needs. Eventually, an organization may continue trading in products or services that are on low demand.

On the other hand, the worst-case scenario would be losing not only significant market share but also going out of business. For a company to remain competitive, it must identify possible changes in consumer demand and address them. Failure to monitor consumer behavior may lead to business investing in unwanted products or services. Currently, Best Buy faces a threat of going out of business. In spite of the exit of major rivals like Circuit City, the company continues to lose market share. Economists predict that the worst is yet to come. Best Buy has not been in a position to develop sophisticated products. Failure of the company to monitor changes in consumer demand has made it hard for Best Buy to sell products that meet clients’ needs. For instance, customers have lost touch with the company’s 3D television (Misdolea, 2010). Currently, most clients prefer televisions manufactured by Apple Incorporated. The majority consumers who have traded with Best Buy claim that the company has challenges in customer relations. For instance, one client ordered a 3D Blu-ray player via Best Buy’s website. He was to collect it at one of the company’s stores. The client was surprised to find that the sales staff of the store had no idea that he was to collect the player. Besides, the store had run out of the players.

Summary of Alternative Solutions

An efficient management of customer relationship calls for a concerted effort amid customers and employees. It would be difficult for an organization to utilize its CRM system if it does not establish a rapport with clients. Best Buy can use numerous approaches to enhance the effectiveness of its customer relationship management system. The company requires training employees in how to use the system. A customer relationship management system cannot function without the employees. The role of the system is to gather information about consumer behavior and other factors that influence organizational performance.

On the other hand, the employees have to act on the information to ensure continued growth of business (Misdolea, 2010). Thus, Best Buy should train staff in how to respond to information gathered through the CRM system. The company must ensure that customer relations representatives appreciate their role in the implementation and management of CRM system. They must have adequate skills to create an outstanding customer experience. Understanding the needs of the contemporary consumers can go a long way towards helping Best Buy manufacture products that reflect the expectations of the customers. It would be hard for the company to grow market share if its products do not add value to customers.

Besides training the customer relations personnel, Best Buy requires enhancing its modes of communication. The company should make sure that it has a consumer relationship management system that supports multiple channels of communication available to clients. Technological advancement has made it easy for customers to change their modes of communication at will. Thus, Best Buy should have a system that accommodates these changes. Currently, the company is incapable of reaching many customers because its CRM system does not support communication channels attributed to social media. Payne and Frow (2009) hold that centralization of data points is critical in decision making. It enables an organization to track its global market. Best Buy must invest in a customer relationship management system that can consolidate information about all its target customers across the globe. That way, the company will manage to segment the global market based on consumer needs.

Evaluation of Alternative Solutions

As aforesaid, the primary objective of the customer relationship management system is to incorporate and computerize marketing, sales, and customer support. Customer service representatives require having adequate knowledge to guarantee that a CRM system meets its key objectives. Additionally, they must have knowledge of how to react to the information gathered through customer relationship management systems. Best Buy should train its employees in how to use customer relationship management system.

It would be difficult for the company to mechanize all the phases of the sales cycle if the employees do not have requisite skills. Currently, Best Buy’s employees are unable to store customer information. Besides, it is hard for the workers to retrieve customer data remotely. The inability of the workers to automate sales force makes it hard for Best Buy to run promotions effectively. Additionally, the employees cannot keep a history of repeat clients. Therefore, it becomes hard for Best Buy to make a follow up of its loyal customers. Payne and Frow (2009) claim that contacting a loyal client helps to build a rapport. The customer develops a perception that the organization values them. Currently, Best Buy loses a majority of its loyal clients as employees do not make a follow-up.

Customer relationship management system helps to automate marketing. Payne and Frow (2009) maintain that automation of marketing processes saves money and time. Best Buy should train its customer relations representatives and sales personnel in how to evaluate customer behaviors. It will help the staff to structure marketing campaigns based on the relationship between customers and the company. Training employees in how to use the CRM system would enable them to send marketing emails to target clients. Additionally, it would allow them to publish promotion information on the system’s communication channels for customers to see. It would equip customer representatives with skills to transform sales leads into clients. However, equipping employees with requisite skills would be futile if the company does not invest in a CRM system that brings together customer information from diverse target markets.

Enhancement of mode of communication would promote service automation. Ngai, Xiu, and Chau (2009) assert that service automation is a critical function of the customer relationship management system. It assists an organization to enhance customer service. Best Buy should modify its CRM system to support different modes of communication. According to Ngai et al. (2009), technological advancement and internet revolution have resulted in customers adopting social media as their primary mode of communication. Many organizations have integrated social media into their customer relationship management systems. It enables them to reach customers, realize their problems and encourage them to do business. Thus, it is imperative for Best Buy to upgrade its current customer relationship management system to ensure that it supports various channels of communication. Additionally, the company should make sure that the system can keep a record of call resolution and time to enhance the competence in customer relations.

Neslin et al. (2011) allege that upgrading the means of communication for CRM system may not bear fruits if the customer relations personnel do not act as brand ambassadors for the company. The company should ensure that the staff has adequate knowledge about the products they market. Employees feel frustrated whenever they contact a company representative with an urgent need and fail to get assistance. Thus, Best Buy should guarantee that employees have knowledge of the enterprise’s products. Additionally, it must enhance internal communication. There should not be instances where customers are requested to pick goods at a particular store only to go and find out that the sales staff does not have knowledge of such an arrangement.

Best Buy is unable to make decisions that can apply across the globe due to decentralization of data points. Currently, the company has unique customer relationship management systems for different regional markets. Thus, it is hard for the corporation to come up with products that target the global market. Centralization of data points would enable the company to have a broad view of the world market. Additionally, it would assist Best Buy to identify the needs that cut across the entire market. Eventually, the company would come up with universal customer relations strategies. In other words, Best Buy would guarantee consistency in service and product delivery across its target market. Nevertheless, centralization of data points may have adverse effects on the company if it does not have the right personnel to interpret and act on the information. Besides, lack of effective communication between the sales stores would inhibit customer relationship management. Thus, Best Buy should ensure that it has experienced customer relations staff. Furthermore, it has to guarantee that there is effective communication between the stores.

Rationale for the Selected Solution

An effective customer relationship management system is one that can help Best Buy to boost its sales volume. Besides, the system should consider the needs of the customers. Misdolea (2010) holds that ethical considerations are paramount in identifying a good customer relationship management system. The system ought not to take advantage of consumers’ lack of information. In other words, organizations are not supposed to use CRM systems to cheat customers for their benefit. Instead, they should furnish customers with sufficient information about their products or services to enable them to make sound judgments.

The company’s CRM should incorporate decision support system (DSS) to facilitate effective decision-making. It would be difficult for Best Buy to make a sound decision if it does not have adequate information regarding target customers. Misdolea (2010) holds, “DSS and CRM systems take a central place in enterprise’s mechanisms of self-regulation” (p. 205). A CRM system cannot function effectively without the support of DSS. Customer relationship management entails making strategic decisions. It may be hard for Best Buy to make such decisions without the help of a DSS. For Best Buy to make an informed decision, it requires having a CRM system that can consolidate data from diverse sources.

The director of information technology systems at Best Buy admits that the company has not managed to develop a CRM system that can offer flawless consumer experience across all the company’s retail outlets. The director claims that customers demand a versatile CRM system. They do not prefer entering their information into multiple systems. Additionally, the clients require having a personal touch with the company. They would like the leadership of Best Buy to know about them, their preferences, and where to find them. Currently, the company has multiple CRM systems for different outlets. According to Misdolea (2010), one of the factors that have made it hard for Best Buy to come up with a single CRM system is the desire by retail stores to operate independently. There exists stiff competition between the various outlets. The company’s leadership encounters challenges persuading the different stores to work together for the good of the entire business. Establishment of a single CRM system would stem competition between the retail stores.

Merging the company’s data points would aid Best Buy to establish an omni-channel. Neslin and Shankar (2009) claim that omni-channel helps to eliminate in-house rivalry and promote company-wide success. Already, the company is in the course of developing a customer relationship management system that can serve all its outlets. Neslin and Shankar (2009) hold that Best Buy strives to establish an omni-channel that will enable customers to order products and collect them later. The channel will comprise numerous supply-chain elements to facilitate trade. Best Buy is renowned for selling consumer electronics. The company also sells appliances, information technology services, and business solutions. However, a majority of the company’s clients do not know that it sells appliances. It signifies that Best Buy is yet to gain touch with all its customers. Consolidating the company’s data points would help in identifying the markets that it has not gained strong influence. Moreover, it would enable the business to identify the unmet consumer needs and act accordingly.

Information System Designed Proposal

For Best Buy to succeed in its effort to establish a customer relationship management system which consolidates data points, the enterprise must ensure that it identifies the best channels of communication. Neslin and Shankar (2009) posit that it is imperative to consider the interests of the clients when establishing a customer relationship management system. They system should furnish clients with adequate information to help them make informed decisions. Best Buy should not use the system to boost its performance at the expense of the clients. Currently, a majority of the customers use social media. It underscores the reason many organizations include social media as one of their modes of communication. Best Buy should identify its primary customer relationship management platform. Currently, the company reaches customers through numerous means like telephone, emails and organization’s website. The company should set aside a single channel of communication that would enable it to reach many customers. Neslin et al. (2011) argue that it is imperative to consider one’s niche when selecting a CRM platform. The chosen platform should enable Best Buy to collect and consolidate data from multiple customers.

Many customers prefer to express their dissatisfaction on Twitter. Besides, a lot of companies have Twitter accounts that they use to interact with clients. Thus, Best Buy needs to link its CRM system to a Twitter account. It would facilitate the collection of customer information. Additionally, the company would have an opportunity to interact with clients, get their views and act accordingly. Neslin et al. (2011) argue that it is imperative for Best Buy to go to where its customers are. Once the company has identified the most suitable channel of communication, it should prioritize customer relationship management response. Best Buy targets many customers across the globe. It may be difficult for the company to respond to all customer complaints.

Therefore, there is the need to ensure that the business handles the most urgent service requests to guarantee a good relationship with clients. Consolidating customer data will help the business to identify clients’ concerns that show interest in its products and services. Such concerns would influence consumers’ buying decisions. Hence, customer relations personnel should address the concerns. Neslin et al. (2011) advise that the company should handle the concerns with the most followers to reach a broad audience. The personnel must know how to appease dissatisfied clients. For instance, they should avoid compensating customers in public as this might encourage others to come to the company with complaints.

Best Buy requires equipping its CRM system with monitoring software to enable it to identify customers that need its assistance. For instance, the company can install Zendesk software. The software would allow Best Buy to compile its communication with clients to enable customer relations personnel to handle them based on their urgency. Best Buy should measure the data in its CRM system to determine its success. The company should gauge employee productivity by assessing the percentage of consumer requests they have handled successfully. Additionally, the company should survey the CRM system to determine customers’ expectations. Neslin et al. (2011) claim that Best Buy should consider productivity, expectations and efficiency as it evaluates the CRM system. The system should be adjusted accordingly to meet the needs of the customers.

Training employees in how to utilize the current CRM system can go a long way towards helping Best Buy to meet consumer needs. Employees would learn how to identify customer needs and address them. Nevertheless, it would be hard for the company to offer consistent services across the globe. Currently, the company does not consolidate information gathered from the various markets. Training employees would not enable the company to reach a broad customer base and offer regular services. For a company to succeed, it must arrive at a broad customer base.

Incorporating multiple channels of communication into the current CRM system would enable Best Buy to reach many customers. However, it would be hard for the company to provide regular services across the globe. Best Buy requires having a CRM system that can facilitate centralization of decision-making processes. The objective of consolidating Best Buy’s data points is to enable the company have a big view of the global market. That way, it can establish a communication channel that is accessible to all customers internationally. Currently, Best Buy has come up with a strategic plan aimed at developing an omni-channel. It would be easy for the company to realize the strategic goal by procuring a CRM system that can consolidate its data points.

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