Assignment Sample on Customer Acquisition and Retention
Introduction
Consumers are major carriers of business on whose demand growth in corporate activities and the firm’s financial performance is entirely dependent. This task aims to provide a consumer acquisition and retention portfolio by considering the operational process of Tesla. However, this portfolio will be beneficial to showcase current interrelation of organizational marketing practices and utilizable customer relationship management (CRM). For this purpose, a brief introduction about the company, Tesla, will be produced, followed by a customer value chain implication and CRM application.
Part 1: Introduction to client and their target consumer
Organizational overview
Tesla, a world-famous electric car company, was established in 2003 to accelerate global transition in a sustainable way (Tesla.com, 2020). For this purpose, this firm’s mission was associated with the utilization of sustainable energy to promote comparatively greater fun in riding for passengers and drivers. This company has secured about 31.5bn USD from its world-wise business in the financial year of 2021 [Refer to Appendix 1]. It successfully sought about 3mcas from a global perspective in that financial year (statista.com, 2021).
A stipulated increase in its product demand can be observed from its increasing rate of production. The above graphical representation is also revealing such an increase. As per statistics, in the first quarter of 2016, the company had a max fraction of only 15510 vehicles. However, in the fourth quarter of 2020, a total of 179757 cars were produced. Thus, intrinsic market demand can be obtained for this form. This is also demanding good customer care options so that the volume of potential customer groups can be increased significantly.
Targeted customers of Tesla
Targeting the most efficient customer group is beneficial for any global company to produce more consumer-oriented products. According to Ascarza (2017), targeting can be done by following market trends, geographical privilege, financial income of potential customer grips, and so many others. As described in the annual report of Tesco, it focuses on geographical location while launching new products (anualreports.com, 2021). For example, while launching its Model 3 car in 2016, it targeted the mass market effectively as a producer of potential customers (Ft.com, 2021). On the other hand, it is also depicting environmentally concerned people’s interest while developing its new vehicles with sustainable energy source usage (Tesla.com, 2021).
Part 2: customer value chain in application
Critical analysis
Customer value chain analysis provides a more in-depth outlook on the creation of specific values from customers. According to Nagy et al. (2018), a major focus on supply chain process and product quality, price distribution and product diversification can enhance customer value chain perspectives. Henceforth, a critical analysis of the customer value chain for Tesla, must forecast important information regarding these aspects. As demonstrated in this automotive company’s annual report, it focuses on the emergence of improved customer satisfaction attainment to maintain a stipulated business growth (Annualreports.com, 2021). Furthermore, an effective illustration of suppliers and their constraints is being done to ensure the firm’s best supply chain management practices.
Effectiveness of illustration
The customer value chain’s effective maintenance is beneficial for various reasons, but the foremost aspect is to retain customers. According to Rejeb et al. (2019), customer retention can be done by effective service generation process and management of product and service quality. As a firm is looking through a customer’s lens by considering their perspectives and opinion through experiences sharing process, it is significantly improving manufactured cars (Annual Report.com, 2021). This, in turn, is creating great effort to not only retain customers but also to gain a higher perspective from them. Firms are also receiving a good customer satisfaction level to manage and maintain effective market share in the UK and global automotive market. As all of these purposes are being served by considering customer values, it is an effective approach to be taken into consideration.
Customer value evaluation through customer value chain model
Customer value evaluation can be done by considering value chain models, and in it, some specific elements need to be considered. For example, inbound logistics systems, operations, outbound logistics, marketing and sales mechanisms, and service points are considered. These can be discussed for selected company in the following way:
- Inbound statistics
Utilization of order-by-order basics in its inbound logistics system provides a great opportunity for Tesla to provide the best quality services to its customers (annualreports.com, 2021). According to Reinartz et al. (2019), better inbound statistics is always a key for serving customers in an improved manner by generating an on-time delivery system.
- Operations
Maintenance of effective operations processes within the organizational periphery is beneficial for any global firm to address its operational objective and provide the best service to its customers (Madhani, 2017). In this connection, Tesco operates through various operational facilities and specified robotic actions to complete each task properly (Annualreport.com, 2021). Therefore, the effective use of the operations process helps this firm address more specific and improved value from the customer’s end.
- Outbound logistics
Tesla is serving a huge consumer group throughout 29 countries worldwide, denoting a huge customer base for it (Tesco.com, 2021). It is bound to serve its customers through shops; it also serves customers by selling products directly to them. Therefore, it signifies a good but contemporary outbound logistics system by which it is dealing with its outbound logistics process efficiently.
- Marketing and sales
Sales and marketing are directly connected, and in the era of business transformation and globalisation, relationships are gaining more importance (Schwartz et al. 2017). As stated in this firm’s annual report, it is focusing on effective marketing and promotional activities to brag about product details among more potential customer groups (annualreports.com, 2021). This is it highlighting on consideration taken to share product information with huge global consumers.
- Services
The firm is significantly focusing on service generation mechanisms to deliver the best quality of service to its customers. For example, it has decided to establish service centres and electric charging stations in the UK in alternate regions as per requirements (Annualreport.com, 2021).
From the entire evaluation, it can be stated that this firm is significantly focusing on each of the above-stated components to deliver the best service to its customers. According to Afèche et al. (2017), a good volume of marketing activities and promotional constraints is key for having a huge sales forecast. Henceforth, this must play an effective role in delivering best service to its customers to satisfy them and increase the market share of Tesla in the global automotive market.
Part 3: CRM in application
Critical evaluation of CRM techniques in Tesla
Customer satisfaction attainment is a pivotal aspect for any global company to receive effective growth in terms of revenue collection. According to Hollebeek et al. (2019), CRM practices are keys for evolving the best relationship with customers. This is beneficial for companies to avail consumer perspectives and make consumers satisfied by communicating with them as and when necessary. In the case of Tesla, it focuses on this aspect, intending to serve its customers to retain its loyalty (Tesla.com, 2021).
Effectiveness of CRM technique identification
A good CRM system is always beneficial to any global firm as it is effective enough to collaborate with consumers and devise a better understanding with them. According to Hashemi et al. (2018), by implying an effective CRM technique, a firm can get more specific information regarding market preferences, trends, and sales forecast. On the other hand, it can also contribute to productivity enhancement. Tesla, world leader in electric cars manufacturing industry, is also focusing on CRM strategies to fulfil its aim of producing best sustainable cars for riders (Tesla.com, 2021). From this perspective, this company needs to detect the best pathway to improve its productivity.
In this connection, consideration of marketing information and effective illustration of sales forecast helps this firm address customer’s preference. Athanasoulias and Chountalas (2019) view that when a firm is capable enough to identify and address customer’s demands, it can avail success defined by focusing on product and service quality maintenance. This is also true for this selected company. However, effectiveness of CRM practises also levied within consideration and establishment of better customer care. As mentioned in the company’s annual report, the management entity is enforcing a great effort to deliver best customer care and support to car users. Its purpose is to establish effective customer care websites, toll-free numbers email IDs, and other equipment (Annualreport.com, 2021).
A good CRM practice’s effectiveness is also related to improving brand image and an increase in brand awareness at the corporate level. In a demonstration of Charoensukmongkol and Sasatanun (2017), customer loyalty can be gained by maintaining an effective relationship with consumers. Hence, Tesla’s steps are providing a great effort to evaluate and improvement in its CRM practices. An increase in consumers’ total volume also provides significant proof of its effectiveness to generate a great effort on CRM practices.
Recommendation to improve CRM practices
From the above demonstration of the effectiveness of CRM practices in the context of service generation process of Tesla, the following recommendations can be provided:
- Recommendation 1: Creation of a personalised customer service process
A personalised CRM practice can be recommended to this firm. It can provide a good opportunity for consumers to discuss with responsible entities of Tesla regarding them’ problems. In this connection, effective tracking of consumers, the implication of methods to detect post-purchase and servicing consumers’ experience can be considered major concerns (Tsou and Huang, 2018).
- Recommendation 2: Keeping of customer service records
Tracking of customer service process and keeping of records are to be recommended for Tesla to manage a proper synchronization within CRM practices. Consideration of opinion given by De Vries et al. (2017) established the relevance of this recommendation by highlighting its effectiveness to provide a better service as per customer’s requirement.
- Recommendation 3: Integration of an improved CRM system
Utilization of effective software and digitised systems is recommended herein based on which CRM system can be improved in an integrated way. For this purpose, the inclusion of several methods such as face-to-face over the phone through mail, website, and other consumer consultation process is to be established.
Conclusion
The entire task has presented an effective illustration based on which CRM practices and customer value chain integration process within Tesla has been described. The emergence of presence and analysis of its effectiveness for Tesla has provided an opportunity to highlight various concerns. Effective evaluation of customer value chain analysis is safeguarding a better service generation process for Tesla. On the other hand, CRM practices effectively emerge with good growth in terms of loyal customer volume enhancement. This from effective discussion about, relevance of considering customer value chain and CRM practices to enhance service quality of Tesla can be concluded.
References
Afèche, P., Araghi, M. and Baron, O., 2017. Customer acquisition, retention, and service access quality: Optimal advertising, capacity level, and capacity allocation. Manufacturing & Service Operations Management, 19(4), pp.674-691.
Annualreports.com, 2021, Annual report, available at: https://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_TSLA_2019.pdf [accessed on 24th March, 2021]
Ascarza, E., Ebbes, P., Netzer, O. and Danielson, M., 2017. Beyond the target customer: Social effects of customer relationship management campaigns. Journal of Marketing Research, 54(3), pp.347-363.
Athanasoulias, G. and Chountalas, P., 2019. Increasing business intelligence through a CRM approach: An implementation scheme and application framework. International Journal of Information, Business and Management, 11(2), pp.146-178.
Charoensukmongkol, P. and Sasatanun, P., 2017. Social media use for CRM and business performance satisfaction: The moderating roles of social skills and social media sales intensity. Asia Pacific Management Review, 22(1), pp.25-34.
De Vries, L., Gensler, S. and Leeflang, P.S., 2017. Effects of traditional advertising and social messages on brand-building metrics and customer acquisition. Journal of Marketing, 81(5), pp.1-15.
Ft.com, 2021, Tesla targets mass market with new Model 3, available at: https://www.ft.com/content/8913fdc2-f7c3-11e5-803c-d27c7117d132 [accessed on 24th March, 2021]
Hashemi, M., Peydaei, M.M. and Khodadadi, A., 2018. The impact of organizational factors of Customer Relationship Management (CRM) on CRM adoption in Tax Affairs Organization of Tehran. International Journal of Advanced Studies in Humanities and Social Science, 7(3), pp.267-277.
Hollebeek, L.D., Srivastava, R.K. and Chen, T., 2019. SD logic–informed customer engagement: integrative framework, revised fundamental propositions, and application to CRM. Journal of the Academy of Marketing Science, 47(1), pp.161-185.
Madhani, P.M., 2017. Customer-focused supply chain strategy: Developing business value-added framework. IUP Journal of Supply Chain Management, 14(4), pp.7-22.
Nagy, J., Oláh, J., Erdei, E., Máté, D. and Popp, J., 2018. The role and impact of Industry 4.0 and the internet of things on the business strategy of the value chain—the case of Hungary. Sustainability, 10(10), p.3491.
Reinartz, W., Wiegand, N. and Imschloss, M., 2019. The impact of digital transformation on the retailing value chain. International Journal of Research in Marketing, 36(3), pp.350-366.
Rejeb, A., Keogh, J.G. and Treiblmaier, H., 2019. Leveraging the internet of things and blockchain technology in supply chain management. Future Internet, 11(7), p.161.
Statista.com, 2021, Number of Tesla vehicles produced worldwide from 1st quarter 2016 to 4th quarter 2020(in units), available at: https://www.statista.com/statistics/715421/tesla-quarterly-vehicle-production/ [accessed on 24th March, 2021]
Statista.com, 2021, Tesla – statistics & facts, available at: https://www.statista.com/topics/2086/tesla/ [accessed on 24th March, 2021]
Tesla.com, 2021, About Tesla, available at: https://www.tesla.com/about [accessed on 24th March, 2021]
Tsou, H.T. and Huang, Y.W., 2018. Empirical study of the affecting statistical education on customer relationship management and customer value in hi-tech industry. Eurasia Journal of Mathematics, Science and Technology Education, 14(4), pp.1287-1294.
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