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marks and spencer - satisfying customers

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Introduction

Satisfying Customers Marks & Spencer's is fondly known as Britain's "most trusted retailer". Yet in recent years the company has discovered that you cannot simply live on your reputation. Marks & Spencer has had to become more "customer facing" to create a platform for improved profitability. The signs are that it is succeeding: in its November 2001 trading statement the company reported half-year profits up by 20.1 percent to �220.3 million (US$315.4 million). The Customer Insight Unit (CIU) has played an important part in this change of fortunes by helping Marks & Spencer to achieve its mission "to focus on our customers and be driven by their needs". In pursuing this mission Marks & Spencer has two key advantages. First, it has the expertise. Headed by Steven Bond, the CIU was formed at the end of 1999 and has seen its remit steadily broaden ever since. With 50 members, it draws together previously fragmented analytical experience in areas such as marketing, sales promotion, customer relationship management, footage assessment and location analysis. ...read more.

Middle

"Multi-channel retailing is a major element in what we are doing, because when you put all of these channels together they tell you a lot more about your customers than looking at each one separately. Of course, you must have analytical software that can cope with the huge volumes of data we keep online. We are talking multi-terabyte," says Bond. By applying analytical techniques such as cluster and discriminant analysis and data mining Marks & Spencer has identified 11 core customer segments (which are further subdivided). The analysis helps in a variety of ways, from corporate branding through to operational decision making within the business units. It enables the company to ensure that the products in a particular store are the ones customers want. Whereas in the past stores were stocked according to their square footage now they are increasingly supplied according to a detailed profile analysis of their customers. The new system supports the Business Units' decision-making process and helps to drive conversion rates and basket value. ...read more.

Conclusion

We rely on the flexibility of SAS to respond to such new requirements quickly and effectively," says Bond. Careful analysis of customer behaviour also facilitates more effective marketing activity. For example, the shopping activities of the 11 segments over the Christmas 2001 trading period were found to vary. By identifying who shops and when - for example older customers tend to shop early to avoid the crowds, while younger men leave things until the last minute - the company was able to align its marketing activity and product availability accordingly. The ability to do this was one of many actions undertaken by the company to help drive up the successful Christmas trading figures. "Our brand promise of trustworthiness and quality standards remains. But careful behavioral analysis enables us to be more flexible at the extremes, which is making a big impact on our financial results," says Bond. Turning around the fortunes of a major retailer takes time. But with the help of SAS software, Marks & Spencer has gone to the leading edge of customer analysis. "Customer insight provides the fuel that powers the company's decision making," concludes Bond. ...read more.

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