Customer relationship management

CUSTOMER RELATIONSHIP MANAGEMENT

BUSINESS DILEMMA

The most influential person in café 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 café, 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 that’s 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 it’s 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 and keep that customer attached to a particular business.

Through customers, a business can improve its business as said by Bill Gates “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 café 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 café is up to the expectation of the customer, it would help the café to attract more customers through viral marketing and gain market share. However, if the products and service in café 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 café to improve its service.

My employees will agree that customers are the most important part of cafe since that’s the reason they are in cafe. If there wouldn’t be any customer, there wouldn’t 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 café doesn’t 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 café. 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 café 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 café connected. If café provides continuous updates in virtual world, people nearby the café would go for new and innovative products in that café just because of that cafes presence in virtual world which would enhance the business/café 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 won’t 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 café. 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. Café 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 customer’s 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, café 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 café 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 café. However, second life gives a customer a virtual feel of being part of that café in addition to visitor information. To make the experience of a virtual world customer great, second life location should offer free virtual coffee, music, and chairs with tables for customers to hang out. In the traditional (physical) environment, the café 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 café 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 café 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 person’s 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 café. Moreover, phishing can easily take place whereby an intruder who is against the café business can create a website similar to the café site and trick the customers into inputting confidential data. This confidential information can be used as a tool to harm the image of the café through missing the customers’ information which would tremendously impact on the café 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 don’t go or visit the real life café. Second life café can be visited by anyone but real world café may not be. People in a region would only be visiting the café and if those limited people get attached to second life café, there won’t be much importance of real life café. Thus, issue arises that second life should be positioned and designed in such a way that real life café 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 café 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 customer 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 café 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 café. 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 café. Also through You Tube, café 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 café 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 it’s 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 someone’s 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 café. Blogging can also be a publishing medium. If a customer complements the cafes service or the products and food in café in his blog, it would be a free advertising for the café. But can also harm the image if blogger comments in a negative way.

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To obtain high quality data, systems in the café 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 café would provide real time information in response to decision maker’s queries and requests. High quality decisions can significantly impact the cafes bottom line, thus, profitability. For instance, having integrated and real time system, café 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 café frequently can help café 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 café 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 café to follow up with its profitable customers who frequently such as daily visit café 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. This will affect the demand and supply of a particular product which would not be reliable. Also café may be marketing and promoting its café 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 café.

The examples of information that can be used by The Broadway Café to gain better understanding of its customers are customers taste and preferences. If the café gets a picture of what their current and potential customers would like to consume, café 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 customer’s disposable income would help understand the affordability of prices by customers. This would give the café 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 there’s 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 café 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.

** 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 café should offer to its valuable customer’s 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 café 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 café.

SUPPLY CHAIN MANAGEMENT

BUSINESS DILEMMA

Broadway Café can reinvent the café by making use of demand planning software. This software would enable the café to be prepared in peak hours of business since it would capture and give information as and when a customer enters either the café or the car park of the café. For instance, as part of software set, a camera can be attached at the roof of the café 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 café 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 café. The software would also enable in ensuring whether the café 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 would be beneficial for café 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 café.

Like Netflix, we would not see café becoming a supplier in another business supply such as hotel industry since our café 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 café 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 café 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 café, the items are prepared for them before hand such as coffee. Thus, innovating ordering system would also attract more customers in the café.

With the help of these supply chain technologies, the café 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 café 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 wouldn’t 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 café 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 café 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 café on time to meet customer demand and if not than they would be responsible for the loss.

MAKING BUSINESS DECISION II

Broadway caf̩ РNo move

Broadway caf̩ РMove

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ENTERPRISE RESOURCE PLANNING

BUSINESS DILEMMA

Some of the issues of running business with separate systems are as follows:

1. It is costly and time consuming. In today’s evolutionary world, time is money and one cannot afford to waste money by wasting time. Double entering of same data takes lot of time. Similarly, having separate individuals to maintain each system increases labor cost. In running separate systems, one would be wasting a lot of time and resources.
2. Loss of productivity. Café would have had fewer employees to perform the same task if systems were integrated, diverting other employees into other departments.
3. Employee confusion and frustration. There would be huge confusion if a single employee would have to maintain multiple separate systems. Person managing separate systems would be under stress always and would be faced with confusion in entering which data where. Stress and confusion greatly affects employee morale; it demoralizes an employee.
4. The above issue leads to high rate of errors. Employees under pressure of work tend to mass up the information in their hand. They end up entering wrong data in wrong systems. This loses the accuracy of data.
5. Lack of data integrity. The inability of systems to draw data from each other provides a limited picture of business at the café. It becomes difficult to run reports for strategic decision making since different systems may have data in different formats.
6. Lack of data integrity hinders decision making. Success of business depends on decision making which ultimately depends on data and reports from a company’s systems. If systems are not producing unified vie of data for overall business, decisions would be affected.
7. It becomes difficult to keep everything up to date when systems are separate. It may take the same data to be entered more than once, making it hard to keep all data updated at once and also causes data redundancy. For example, if a particular customer buys more than one product, that particular customer information would be added in the different products system causing wastage of physical storage media and double entering of same data.
8. Deteriorating profitability. Due to being unable to get clear business overview, company may end up focusing on less profitable product, losing out on its profitable product.
9. Difficulty of keeping track of each and every product. This is because one would have to keep going back and forth between each one system to calculate sales and cost, that is, dollars spent.
10. Customer satisfaction may be at risk.Inability of tracing out the right data may lead to ordering or producing wrong product which may not be demanded by customer thus making customer dissatisfied.

If the café cannot correlate the details of each system, it may seriously affect café in terms of its potential customers leading café to lose their business. The biggest risk would be the misinterpretation of separated data. When correlation among system is missing, any rapid decline in sales would be assumed to be caused by a particular event when in fact it will be from something quite different that is captured in a separate system. This inability to getting a full picture of business can lead the café to respond erroneously, failing to solve a problem or to capitalize on a strength and ultimately losing its current and potential customers as well as sales. In terms of long term effect, it can also force the business to close down due to financial problems.

Marketing campaigns would be affected due to separate systems for each product in terms of its inability to mix different products while promoting them. For instance, if one has a promotion that includes a purchase of coffee that entitles the customer to a discount on a coffee press; it would be difficult for separate systems to report this properly. Marketing would also be hurt since café may not know which products to promote and when to promote because of its inability to compare “apples to apples” using different system; meaning difficulty in comparing products, prices and sales. There may be hardships faced by café in allocating or tracking its most profitable and popular product as well as less popular product as a result of separate systems. This leads to confusion in marketing strategy as to which product to advertise and thus, café may end up advertising its popular coffee instead of CD’s which needed to be cleared from stock.

MAKING BUSINESS DECISION I

* For the break even analysis, we have used the goal seek feature in excel and assumed our revenue per item is $5 since we are not given any detail on it. We have taken that $5 as price for a cup of coffee and have used the software #1 in determining the revenue needed to pay for new software. Thus, our total revenue needed came to $14225.

MAKING BUSINES DECISION II

Its difficult to operate café due to its disintergration of information which leads to misinterpretation since some data or information maybe same in separate excel sheets for example, employee ID, employee name, marital status, etc.

I would advice and help the café to develop a human resource information system(HRIS) to operate more effectively and efficiently. Since all 3 excel sheets show the similar information particularly about same employees, it would be easier to intergrate these information through HRIS. I would focus on implementation of this system since it would also be an aid in routine transaction of business. This is because this system enables payrolling to be done as and when needed, just have to instruct the system. Although it would be costly, I would still try doing the implementation through effective planning and support of my employees which I achieve only by including them as part of this implementation. I would also provide them sufficient training for the operation of new system effectively and efficiently.

ERP is a kind of integrated software system. (Turban, E., and Volonino, L., Information Technology for Management, 2009.) The core components of ERP includes accounting and finance, production and material management and human resource management. The HR capital management is an example of ERP module which would aid the café in integrating its separate information about employee, payroll and human resource now as well as in future to give a unfied view of enterprise HR information if the café business expands. in other words, together with other ERP modules, ERP would standardize HR information. Thus, implementation of an ERP system would provide the café substantial benefits in the future with greater intergration capabilities.

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Enterprise planning system strategies are the drivers of today’s organizations. The better the strategy the greater the processes and systems are effective and goal congruent. For any strategy to be devised and implemented the scale and the nature of the business shall be considered. The needs and the interaction of their organization to any other system should be determined.

The strategy would be to integrate the ERP system, meaning that the systems that are present in the different sections of the café should be aligned together to cut across the functional departments and/or areas. The alignment may be the better opportunity for the organization to report the different dynamics of information. The integration process will benefit the café and the other operators by allowing them to clearly device a plan of action to promote the sales of the other related products thus savings in terms of advertising and promotional costs.

Further consideration needs to given that there may be resistance to change from the other operators and the community event organizes. It can be amplified that the other operators may not want to change because the cost of the new system be significant and quiet large and other additional costs such as employee training and the system upkeep or maintenance may be the bigger theory behind this change. A further, issue is that the area of divulging information that is deemed to be confidential and /or important. This will not able the organizations to integrate their systems and open the area of cost benefit analysis. Never the less, to a person who is in the business of longer term business one has to take heed that the benefits that will be added to the café and the other operators will be greater than that of the costs that persist currently.