Business Dilemma: CRM and Management of Cafe

Business Dilemma: CRM and Management of Cafe CUSTOMER RELATIONSHIP MANAGEMENT BUSINESS DILEMMA The most influential person in cafà © or in any business are the customers, since without customers, one does not have a business. Everything in a business environment revolves round customers. Similarly, in case of our cafà ©, customers are a key to a successful business at the end of the day. Knowing your customers and providing satisfaction to those customers would gain customer loyalty. Grandfather gave priority to customers thats why he knew all his customers. However, just knowing your customers is not enough; one needs to keep a record of its customers so that its easy to analyze. Since customers are really influential towards a business, business (in our case, cafe) should treat each and every customer as if they were the only customer. While serving each customer, one must keep in mind the needs of that particular customer only and should serve in such a way that the service exceeds their expectation. Giving most priority towards customers would enhance customer loyalty an d keep that customer attached to a particular business. Through customers, a business can improve its business as said by Bill Gates â€Å"Your most unhappy customers are your greatest source of learning†. Customer complains in fact is a key to improve the service, for instance, if a customer complains that the way coffee served was not pleasant and did not met the expectation, that complain can be used as a tool to improve the coffee serving process through further training workshops for employees in that area. Thus, customers complain can be seen as a challenge to be met in future to make him/her (customer) happy and attracted to the cafe. If you treat your customers well, your customers will go out of their way to return to you. Therefore, customer feedback and suggestion can help improve a service. However, the cafà © may not have answers or response for all of customer questions and suggestions. Customers could help or hurt the cafe through viral marketing. Word of mouth marketing is the largest determining factor for a service business image, which can be either online chatting or physical talk. If the service in cafà © is up to the expectation of the customer, it would help the cafà © to attract more customers through viral marketing and gain market share. However, if the products and service in cafà © is very poor which made the customer unhappy can spread negative impression on other customers, hurting the company through losing its current and potential customers. Moreover, online comment or complain on the cafes website can be injurious such as comment on You Tube. Literally, the customer does not intend to harm or hurt the company; they just want their needs to be fulfilled and service is up to their expectation. As already mentioned customer complains can provide an opportunity, thereby, helping the cafà © to improve its service. My employees will agree that customers are the most important part of cafe since thats the reason they are in cafe. If there wouldnt be any customer, there wouldnt be need for employees. Thus, customers determine or secure the period of employment of the employee. If there are fewer customers, employees may be laid off to cut down costs. However, some employees may feel that they are the most important part in a business. Employees are the most important asset of any business. If cafà © doesnt value its staff, it would demoralize them which can impact their performance in service. And as a result, their poor performance can hinder customer growth of cafà ©. Thus, some employees value themselves as the most valuable person in a business when compared to customers. MAKING BUSINESS DECISION Virtual world is a 3D, electronically-generated environment where users can interact, create and communicate just as they would in the real world for example, second life (http://ictwm.org/news/virtual-worlds-help-real-businesses). Virtual world provides people with experiences rather than processing transaction. Once people get attached to virtual experience, they would be excited about experiencing it in real life. This would only be possible through going to the real cafà © which would help the business in transaction processing. It also aids in mass customization as customers design or suggest what they exactly want. Virtual world encourage interaction, collaboration and communication. It can be accessed from anywhere in the world, thus, keeping people and cafà © connected. If cafà © provides continuous updates in virtual world, people nearby the cafà © would go for new and innovative products in that cafà © just because of that cafes presence in virtual world which would enhance the business/cafà © operations. It could also be a marketing tool for the cafe to promote its menus for the day through frequently changing attractive ads in the virtual world. Customer relationship in virtual world is very delicate matters since one does not physically meet to create impression. Virtual world should be designed in such a way that it is appealing and attractive to a customer. In virtual world, cafe business would be better able to meet customer satisfaction with minimum or no cost by changing designs to strengthen virtual customer relationship. Customer wont need to wait in long lines to be served, one can just go to the cafes website and get the taste of coffee or of service in that cafà ©. Virtual world does not restrict the access to any person; any person can access to the website to have a taste. In other words, there is a greater reach and contact to maintain strong customer relationship. Cafà © can be always available to its customer through virtual world without any disruption. Customers would be in a position to demand what they want based on their own specification. This makes the customer feel like king through providing their customized products and enhancing better customer relationship. In traditional customer relationship management strategies, there has been lack of customer experience, co-creation, co-production and collaboration with customers. Thus, our strategy to manage customer in new virtual world is through co-creation and co-production with customers. Co-creation and co-production with customers is different than traditional customer-centric approaches in that the focus is not to learn as much as possible about customers but instead consider them as equal problem solvers(http://findarticles.com/p/articles/mi_hb5858/is_200711/ai_n32252899/pg_2/). Giving customers an important role in the value chain can affect customer satisfaction. Value in co-creation derived by customers purposeful interaction cannot be obtained merely from asking the customers to answer questions and leave comments. Virtual worlds may provide an ‘experience space that supports ‘experience networks which go beyond the domain of a single company and its suppliers to one that is experience-centric to the customers. (http://findarticles.com/p/articles/mi_hb5858/is_200711/ai_n32252899/pg_3) Moreover, since there is a growing use of internet, it would be easier for company to collaborate with its customers through electronic CRM. Electronic CRM has a wider scope for managing customer relationship in a variety of ways and not just collaboration ranging from designing and pricing of digital products to loyalty programs. Supporting Second Life customers differs from supporting website customers as well as traditional customers. In second life, cafà © can design and create those products and services that a particular customer wants. It allows basically for customization as well as reaching out to customers for ideas, prototyping and feedback in a particular area giving cafà © a better competitive advantage. This means that customer support in second life would need to be met in real time especially to a customers demand. Second life is basically everything being electronic whereas traditional revolves around physical presence. Moreover, collaboration between customers and company is a major support in second life unlike traditional customers. Website supports customers with visitor information and product review. It does not allow a customer to get the feeling of being in cafà ©. However, second life gives a customer a virtual feel of being part of that cafà © in addition to visitor information. To make the experience of a virtual world customer great, second life location should offer free virtual coff ee, music, and chairs with tables for customers to hang out. In the traditional (physical) environment, the cafà © needed to be closed off at a particular time, even though customers were involved in deep discussion. This does not happen in second life. Second life supports customers to continue with whatever they are doing in the virtual cafà © without any time limit and can chat as late as they want. Furthermore, upcoming events, artwork and music should be available to customers visiting second life so that it becomes interesting and encourages them to explore the site. Another difference between traditional and second life customer support is in terms of advertising. In past, business would use advertising agency to promote their products but now the cafà © can do in house advertising in virtual world attracting wider range of customers all round the world. Second life does not provide authentication of a persons identity. There is no access control and anyone can easily get into the second life and if there is any confidential information for customers only, that can be easily leaked and used to the disadvantage of the business, that is, the cafà ©. Moreover, phishing can easily take place whereby an intruder who is against the cafà © business can create a website similar to the cafà © site and trick the customers into inputting confidential data. This confidential information can be used as a tool to harm the image of the cafà © through missing the customers information which would tremendously impact on the cafà © business. Similarly, misrepresentation can be another issue just like phishing, whereby someone designs an avatar that looks just like the avatar of a customer service representative. Other issue involves the obsolesce of real life location. Since people get attached to second life, they dont go or visit the real life cafà ©. Second life cafà © can be visited by anyone but real world cafà © may not be. People in a region would only be visiting the cafà © and if those limited people get attached to second life cafà ©, there wont be much importance of real life cafà ©. Thus, issue arises that second life should be positioned and designed in such a way that real life cafà © does not get obsolete and people remain attracted to it as well to have real currency flow in business. Due to lack of authentication, privacy concerns arise. Maintaining customer confidentiality becomes an ethical issue and a challenge for businesses. MAKING BUSINESS DECISION II You Tube can be an important vehicle to communicate with the cafes customers. It is a popular free video sharing website where people can also comment on a particular video. We would design and create video clips of the cafes products and the way service is provided in cafà © and then share it on You Tube, using cartoon characters and other imaginary characters making the clip funny, interesting and informative. Through these clips, we can conveniently show our customers how we have minimized the problem of long wait lines. Firstly, we would make clips showing more counters for serving as well as drive in windows. Long wait lines are basically because of few or only one counter, thus showing a clip with more counters can be seen as a reasonable rectification to the problem. Moreover, for travelers who want to be served instantly while in their vehicle, drive in windows would be a solution to avoid waiting in lines when in rush as in case of McDonalds in Fiji. Clip can show a custome r ordering and being served in just few seconds through drive in windows. Furthermore, online ordering and tele-ordering can also be a rectification to long waiting lines. Through virtual world or cafes website, customers can order online as well as through phone calls before actually going to cafà © so that on their arrival, their order is prepared and no waiting is required. These solutions can be depicted on You Tube through videos using animated characters. You Tube as a communication vehicle, is free and easy to use. Unlike advertising over television, which is associated with costs, You Tube provides this for free whereby anyone can watch the videos and pass comments about how they feel about that particular video. As already said, it saves money on marketing since advertising can be done through clips to promote the cafà ©. You Tube has a wider reach in terms of customers and markets. It is not restricted to a particular geographical region or location. Customers all around the world and in different market can get access to You Tube and learn about the cafà ©. Also through You Tube, cafà © can get a great deal of information to many people in a short amount of time just through one clip. These benefits show that You Tube can be an efficient communication vehicle for any business whether it be cafà © or a car dealer. However, there are various disadvantages for You Tube as well. Since it can be viewed by anyone in the world, it may capture unwanted attention, for instance, is a person does not love coffee, he/she may not like the clip based on coffee and would comment negatively which would create bad impression to other customers. You Tube also in some cases compresses the content of clips and other files, making it unappealing to customers as its not presented in the right way intended and information can be chopped in that compression. Products may not be clear to customers, thus, proper communication of that product such as coffee maybe hindered. Also due to missing information or half information, it could become difficult to understand what the file tries to reveal to customers. Issues of privacy concern and copyright infringement can be cons of You Tube. Privacy can be made vulnerable as amount of information on video can be dangerous such as unintentionally showing where an employee lives or showing someones bio-data while promoting the product or service. Therefore, before starting to use You Tube as a medium of communication vehicle, one must clearly study the pros and cons of it to see whether benefits are there or not. Other new technologies that can be used as a customer communication vehicle that would be more effective than You Tube are social networking sites such as twitter and facebook. It allows more than just posting video. One can post comments, pictures, update information and create events on it. Twitter and facebook help bringing customers together. With help of twitter, cafe can send an alert about new deals or offers in the cafà ©. Blogging can also be a publishing medium. If a customer complements the cafes service or the products and food in cafà © in his blog, it would be a free advertising for the cafà ©. But can also harm the image if blogger comments in a negative way. APPLY YOUR KNOWLEDGE To obtain high quality data, systems in the cafà © must be integrated, since quality information does make a difference in any business. Major importance of quality information is that it induces enhanced, accurate and appropriate decision making. The quality of information used to make business decision determines the quality of decision made. Having real time system in cafà © would provide real time information in response to decision makers queries and requests. High quality decisions can significantly impact the cafes bottom line, thus, profitability. For instance, having integrated and real time system, cafà © can provide what customer wants in an instance which would meet customer satisfaction, thus, improve profitability. Moreover, high quality information enables any business to track valuable customers who generate most revenues. Having proper information about a particular customer visiting cafà © frequently can help cafà © identify the loyal customer and could reward him or her so that they keep coming in future. Uses can place confidence on information of high quality since it is reliable. For instance, if cafà © post on its website information generated from its systems, customers could be easily in a position to rely on it. On the other hand, low quality information results in various business effects. Low quality information are those which has missing information example no first name of customer, incomplete information example no street or missing area code, probable duplicate information such as similar name, same address or phone number and potentially wrong information. The effects of this on cafes business would be its inability to accurately track customers, difficulty identifying valuable customers, inability to identify selling opportunities of cafes product, marketing to non-existent customers, difficulty tracking revenue and inability to build strong customer relationship (net: slides). Low quality information would hinder cafà © to follow up with its profitable customers who frequently such as daily visit cafà © since there may be name confusion. Also if systems are not integrated, it becomes difficult to provide accurately what customer wants and may lead to providing wrong products. Thi s will affect the demand and supply of a particular product which would not be reliable. Also cafà © may be marketing and promoting its cafà © and product to a non-existent customer online due to fake or same names who are not cafes usual customers. Overall, low quality information vigorously degrades the decision making quality in managing a customer and the cafà ©. The examples of information that can be used by The Broadway Cafà © to gain better understanding of its customers are customers taste and preferences. If the cafà © gets a picture of what their current and potential customers would like to consume, cafà © can be prepared for the product and provide the customer that product when they actually came and demand. Moreover, having a brief idea about the customers disposable income would help understand the affordability of prices by customers. This would give the cafà © a view as to what prices customers would be willing to pay for the cafes products such as coffee. Changes in environment and weather would also help in getting to know the customers and their wants, for instance, coffee would be largely demanded during colder seasons in Fiji. Some of the data quality issues are as follows. Firstly, dirty data issues due to data errors which can be attributed to human errors or an application error due to legacy systems. Since theres a large quantity of data to be fed in the system, humans are prone to make errors. Missing and duplicate data are other two issues (Turban, E., and Volonino, L., 2009). The cafà © lacks in proper management of its data which can lead the data to be easily lost as well as to be entered twice. This could really affect the output results thus affecting decision making. Moreover, data can be non-standardized and massed up due to lack of standards. The strategies the company can use to avoid such data quality issues are to implement Master Data Management system. It is comprises a set of processes and tools that consistently defines and manages the non-transactional data entities of an organization. MDM has the objective of providing processes for collecting, aggregating, matching, consolidating, quality-assuring, persisting and distributing such data throughout an organization to ensure consistency and control in the ongoing maintenance and application use of this information. (http://en.wikipedia.org/wiki/Master_data_management) MDM would reduce or eliminate the data quality issues, giving a unified view of enterprise data. It can also use automated data entry, Web forms for individual entering data with data integrity checks and drop down menus and radio buttons. (Turban, E., and Volonino, L., 2009) having frequent data audits in the system can also aid in preventing the above mentioned issues since data would be continuously reviewed and any errors would be detected and corrected appropriately without further problems in future. CAFES BEST CUSTOMERS** Customer ID Total Sales Amount ($) 3548 18,261.86 4438 26,474.28 5657 11,342.98 6891 10,585.94 13801 33,555.50 13959 19,593.65 270177 14,355.99 294896 11,348.40 305668 49,647.45 540135 16,338.02 1309948 11,401.60 ** We have assumed that the cafes best customers are the ones that bring in sales amount dollars of more than $10000. Listed above are the cafes best customers. The cafà © should offer to its valuable customers loyalty marketing programs such as point programs whereby a customer would get points for every purchase they make and when they reach a certain level and collected enough points, will get a special reward such as Jacks of Fiji which is using this marketing system to keep their loyal customers attached. Moreover, the cafà © can give its valuable customers loyalty cards as MH in Fiji is dong with its flash and gain card. Providing customers with promotional vouchers would also give them a feeling of appreciation for their service. Keeping in touch strategy can also be a way of marketing campaign towards valuable customers. Giving personal attention towards the profitable customers is a way to build relationship and keep them in your business. This can be done by sending them promotional messages personally through email or calls frequently and asking for their feedbacks as to what they would like in future and their expectation from cafà ©. Broadway Cafe Question Name Total What is the best selling product? Music CD $776,813.17 What is the worst selling product? Kids CD $96 What is the best sales month? 3 $569,339.10 What is the worst sales month? 5 $58,501.06 What is the best selling product during the best month? Music CD $235,054.45 What is the worst selling product during the best month? Kids CD $64 What is the best selling product during the worst month? Music CD $33,684.43 What is the worst selling product during the worst month? Food $63.2 * For answering the above questions, we have taken our base as sales amount values to reach an answer. SUPPLY CHAIN MANAGEMENT BUSINESS DILEMMA Broadway Cafà © can reinvent the cafà © by making use of demand planning software. This software would enable the cafà © to be prepared in peak hours of business since it would capture and give information as and when a customer enters either the cafà © or the car park of the cafà ©. For instance, as part of software set, a camera can be attached at the roof of the cafà © to capture information on people entering the car park and determine what they would normally order at that particular time of the day. Also, it would allow the cafà © to keep track of its regular customers and their demands, thus, have the items available for them without having them wait in lines. This can be done before a customer enters the cafà ©. The software would also enable in ensuring whether the cafà © has enough of the products that that would be demanded by the customer such as a particular type of coffee. Although the implementation of such a software would be costly at its initial stage, it w ould be beneficial for cafà © in future as it is located in Suva, to obtain customer satisfaction and where people are always in rush. Thus, demand planning software would be a great benefit for the cafà ©. Like Netflix, we would not see cafà © becoming a supplier in another business supply such as hotel industry since our cafà © itself is very small at this stage. First, it needs to widen its customer base with the help of demand planning software and online ordering system (electronic ordering). Since our cafà © has a website, we could include in that a feature where customers order online, paying through credit cards or paying subscription fee for being in that account. The cafà © can based on customers order deliver the items to the customer within the Suva area if large quantities are ordered such as Pizza King which delivers pizza to people living in urban and suburban areas. Moreover, a customer would also order online so that before their arrival in cafà ©, the items are prepared for them before hand such as coffee. Thus, innovating ordering system would also attract more customers in the cafà ©. With the help of these supply chain technologies, the cafà © can expand its customer base and from there on can think bigger and better options such as becoming supplier of coffee/coffee beans to hotels or other businesses such as MacDonald. MAKING BUSINESS DECISION I The success of any business depends on its ability of short and long term planning. As a concerned business operator, I would always maintain some inventory in my warehouse for such unexpected events especially coffee beans which are in demand. Since not being able to meet customer demand would lead to losing out customers. Thus, our cafà © would keep with its operation regardless of disruption in supply chain du to dockworkers strike and would run on warehouse inventory (Brazil Beans, China Tea and custom Coffee press machines). Moreover, based on available inventory analysis in the warehouse, we would determine how long supply would last. Is our warehouse inventory wouldnt be able to meet up with the disruption period, we would resort to redundant suppliers since all suppliers wont be affected at once with the same problem. We would consider our temporary local suppliers such as Nestle to supply us with similar products as long as we are able to operate efficiently, although the cost in emergency need may be higher than usual price paid to our fixed suppliers. Since the cafà © has been going towards demand-driven manufacturing, Radio Frequency Identification Technologies (RFIT) would be the newest and most efficient solution to supply chain problems. RFIT is the most valuable technology to track inventory. If inventory level in any case would be low, it would trigger automatic alert to our suppliers. It is an important device in global transportation both land and sea. It ensures that inventory level are checked and replenished on need by need basis. Although this strategy would be bit costly for the cafà © in the initial stage at present, it would provide benefits in the future. Another strategy I would recommend is to create a position as freight specialist whose job would be to enable transportation of products in whatever the situation maybe and at any cost. The freight specialist would guarantee that products would reach the cafà © on time to meet customer demand and if not than they would be responsible for the loss. MAKING BUSINESS DECISION II Broadway cafà © No move Broadway Cafà © Units sold per month: 20,000 Unit variable costs: $0.50 Average unit sales price: $2.20 Current fixed costs: $5,000 Added lease payment, new offices: $2,500 Projected fixed costs: $7,500 Sales month Units Sales Fixed Costs Variable Costs EBIT January 6,582 $14,480 $5,000 $3,291 $6,189 February 11,121 $24,466 $5,000 $5,561 $13,906 March 14,178 $31,192 $5,000 $7,089