How Nespresso made it to turn a basic product into a luxury one through its CRM strategy? Drinking coffee is such a common habit that brands always offered all the elements to enjoy this beverage at home; the coffee, the machine, the filters… As a result, the quality and taste can never constant and the best way to appreciate a high quality coffee was in a bar or restaurant, equipped with professional machines. Nespresso nevertheless decided to open access to premium coffee experience at home… A strong concept, a relevant positioning supported by an exemplar CRM strategy leaded the brand to success. So we will first present the concept, then analyze the key elements of the strategy and try to foresee threats to finally develop recommendations.
[...] Make sure that the CRM strategy is profitable. One point of the “Successful loyalty management“ theorem (Stones, 2003) lays emphasis on the understanding of how CRM makes money, since this is the company's main goal. As the concept of Nespresso itself is based on a massive use of CRM, we can wonder if the efficiency and use of CRM could be improved in Nespresso. Indeed, the massive investment for the boutiques is high and is supposed to reinforce the customer loyalty and strengthen the feeling of belonging to the Nespresso community. [...]
[...] Besides of this double need fulfilment, Nespresso also performs a very efficient CRM integration, and applies a differentiation strategy based on total service offer. In fact, the services are strongly associated with the buying of the machine, so that all the CRM is part of the product. It increases the quality by adding to the high technical advantages of the product a real emotional link with the customer. Finally, the company tends to value the product by focusing on advice and expertise dimension only club members are targeted. [...]
[...] Mobile Phone Strategy Nespresso coffee machine owners can order directly their coffee via a mobile phone in France and soon in Europe. They can access to the Nespresso Club via their mobile phone which makes it very convenient and quick. This service is available on Gallery via Orange, SFR and Bouygues Telecom mode). To sell Nespresso products, Nestlé doesn't need sales representative so this is a profitable business, without affecting customer satisfaction. The sales of Nespresso products are made by seller by phone. [...]
[...] So that as Nespresso CRM strategy is really efficient, a basic customer will go through - A welcoming process reminding him the luxury aspect of its machine. - A quite heavy mailing process. - Receiving the magazine with the pompous messages as mentioned above. As a matter of fact, there are great probabilities that the customer would be tired of this, which would damage the CRM efficiency. So that Nespresso should integrate in its data managing system in a way that will control and check the amount of advertising and messages that an individual customer receives. [...]
[...] The data will, after being mined by Calleo, of course, be used in the upcoming short term strategy of the company. The Boutiques also allow Nespresso to handle the customer in a face-to-face relationship, and to perform a very efficient reinsurance Technical support and other tools Technical support CRM in that context is used to improve customer service and consequently increase customer satisfaction or at least to keep it at an equal level in case there are problems. The main CRM issue for Nespresso technical support is not to disappoint customers by providing them, in case of problem, a rapid solution corresponding to their needs, rather than to make them loyal. [...]
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