History and Values
Whole Foods Market Company was founded in Austin, Texas by of Safer Way Natural Foods and Clarksville Natural Groceries. The four businessmen believed that natural organic food must be available for purchase in separate supermarkets. For this reason they opened their first market in 1980 with only 19 employees. The success that followed transformed a small supermarket into a foods supermarket chain, operating more than 300 stores in the United States, Canada and United Kingdom (“About Whole Foods”, n. d.). Over the years Whole Foods Market has proven itself as a socially and environmentally responsible company. Among its core values are satisfying and delighting their customers; caring about local communities and environment; supporting the happiness and excellence of employees; creating and maintaining win-win partnership, trust and respect with their suppliers.
Operational and Analytical CRM
Operational CRM deals with marketing, sale-force and service automation, improvement and enhancement of business processes which include direct customer contact through sales and marketing activities, as well as service and determining customer’s needs. While analytical CRM deeply analyzes all information about customers gathered through operational CRM systems in order to support and improve organization’s decision making, and ultimately influence customer behavior and achieve certain business objectives (Buttle, 2008).
WFM CRM S.W.O.T. Analysis
Customer satisfaction is one of the main strengths of CRM of Whole Foods Market. The company identifies best high-ranking customers and increases sales-efficiency. Premium prices and high employee to customer ratio show the weakness of company’s CRM. Popularity of healthy life-style and increasing number of customers brings new opportunities to please them and increase sales base. However, over automation of service and marketing through operational CRM systems may become the shortcoming and lead to the loss of personal interaction with each customer.
The primary competitors of Whole Food Markets are general and organic groceries. General groceries are represented by Kroger, Safeway and Supervalu. Kroger covers 31 States and is a well-known regional brand, however the company has weak merchandise quality control. Supervalu has a wide portfolio of store brands, and impressive supply chain capabilities, but it is known for its late entry into organic market. Trader Joe’s is the main competitor among the organic groceries. The company does not separate conventional and organic food, but is successful in fast inventory turnover.
CRM of WFM
One of the main ways Whole Foods Market uses to collect information about customers is supermarket discount cards. As soon as customers scan their cards, information about their purchase is added to the database. Information about each customer buying preferences is thoroughly analyzed. It helps the company to plan effective marketing campaigns, and significantly increase sales (Buttle, 2008). Furthermore, Whole Foods market uses CRM applications in order to analyze complaints or compliments from their customers, and improve customer service. In order to acquire new online customers, WFM offers printable coupons which allow customers save money when shopping online.
Benefits of CRM
Effective CRM of Whole Foods Market results in growing number of customers, reduced costs due to improved and efficient operations, and increased customer loyalty and satisfaction. On the long-run successfully implemented CRM approach maximizes company’s opportunities, increases sustainability and leads to higher profit each year.
Pertaining to WFM CRM, this chart shows the process of development and implementation of company’s strategy in order to solve a certain problem found by CRM specialists. First of all, the company with its mission, vision and values undergoes SWOT analysis both external and internal. The analysis of strengths, weaknesses, opportunities and threats helps formulating the core strategy. Then it is followed by strategy implementation when all the planned activities are realized. Evaluation is the last stage which includes analysis of the results.
Operational and Analytical CRM of WFM
Discount cards and customized newsletters of Whole Foods Market are a good example of how their operational and analytical CRM works. Discount cards record all purchases and let analytical CRM analyze purchasing habits of customers. Customized newsletters implemented by operational CRM require each customer to indicate their interests and shopping preferences in order to subscribe. All this data is sent to analytical CRM for future analysis, next marketing campaigns or sales activities (Buttle, 2008).
Customer Retention Programs
Like many other supermarkets, Whole Foods Market possesses multiple customer retention programs like frequent-buyer program, or for those customers who show lack of spending. Usually if the customer stopped shopping in one supermarket, it means he prefers to make purchases at the competitor’s. As soon as analytical CRM detects such signs in consumer behavior, certain actions are taken – free vouchers or electronic newsletters (East, Wright, & Vanhuele, 2008).
Customer Disloyalty vs Service
Customer disloyalty is the number of customers which have been lost comparing to the average number of customers during the same period of time. The main reason of customer defection is poor customer service. Once the customer does not receive proper service, he may never come back to the supermarket again. Moreover, a dissatisfied customer spreads bad news informing at least five other people within next twenty hours (East, Wright, & Vanhuele, 2008).
This model shows the steps of implementing a CRM program: customer database is created with the help of different sources like discount cards, and online newsletters; in order to solve a certain problem the data is analyzed and customers which, for example, must be informed about a new product are selected; relationship marketing activity for target customers takes place; the success of the activity is measured by the means of CRM metrics.
Whole Foods Market can improve its CRM loyalty program that will help to increase the effectiveness of their sales promotions. The company can offer 5-10% off voucher for every thousand dollar purchase or more; require online-sign up on their website in order to collect information about each visitor; send personal invitations to high-ranking customers inviting them for customer appreciation events.
About Whole Foods Market. (n. d.) Retrieved March 3, 2011, from http://www.wholefoodsmarket.com/company/
Buttle, F. (2008). Customer Relationship Management. (2nd ed.). Oxford, UK: Butterworth-Heinemann.
East, R., Wright, M., & Vanhuele, M. (2008). Consumer Behavior: Applications in Marketing. Thousand Oaks, CA: Sage Publications.