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Filene'S Basement: Case Synopsis

The document discusses a case study of the retail store Filene's Basement. It outlines how the store had an unprofitable strategy of low customer information and individualization that led to losing a long-time customer. A better strategy would be high customer information and individualization through an individualized CRM system.

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Deepika
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295 views3 pages

Filene'S Basement: Case Synopsis

The document discusses a case study of the retail store Filene's Basement. It outlines how the store had an unprofitable strategy of low customer information and individualization that led to losing a long-time customer. A better strategy would be high customer information and individualization through an individualized CRM system.

Uploaded by

Deepika
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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FILENE’S BASEMENT

Case Synopsis:

 Filene’s Basement, a retail store that sold designer labels at discounted prices is the
organization that is being analyzed in this case
 Norma, a regular customer to Filene’s since the 70’s, who had a terrible experience
at Filene’s is the protagonist of the case
 This case talks about the how the relationship between customers and companies
have evolved over the years and how companies have taken steps to get rid of
unprofitable customers
 The Customer Profitability Pyramid highlights the most profitable customers who
occupy the top Platinum tier, followed by Gold, Silver and Bronze level customers
based on how profitable they are
 The Lead customers who were bottom of the pyramid were the segment which
weighed down the company and were a segment of customers that were
unprofitable to organizations
 The case also highlights on how over the years organizations have been aggressively
offloading their Lead customers by raising their prices and flushing out these so-
called Lead customers
 Organizations have gone to a stage where they’ve even incentivized the exit process
by paying customers anywhere between 300-500 USD to shed their unprofitable
customers.
Solution to the Current Situation

 It is quite clear from the case that Filene’s Management was constantly incompetent
and there was not one organization that acquired it which came out with a suitable
Business Strategy
 A proper Customer Strategy to maintain that long term relationship with its
customers (For example, Norma in this situation) should have been laid down to
avoid mishaps like in this case
 Norma as a customer who would promote Filene’s to her family and friends are a gift
to organizations and Filene’s should have gone that extra mile to have that Customer
Centric approach to not lose out on a customer like her
 Customer Engagement is a crucial factor in retaining such customers and Filene’s
failed in this situation by losing out on a profitable customer like Norma
 Filene should develop a Technology Capability to better understand the profitability
of customers. If this had been done earlier, then Filene would have better
understood their customers had how profitable they have been via their previous
transactions so that they could better maintain customer relationships
 Taking into consideration the current scenario, on the type of strategy Filene
incorporated, below is a customer strategy matrix which talks about the
Completeness of Customer Information and Degree of Customer Individualization
 The current strategy Filene incorporated was Low Completeness of Customer
Information and Low Degree of Customer Individualization. This approach of
customer strategy is Product Based Selling

Low degree of Customer High degree of Customer


Individualization Individualization

Completeness of Customer
Info. (High)

Completeness of Customer Product-based Selling


Info. (Low)
Filene’s present strategy

 The strategy that Filene’s management should look to incorporate is High


Completeness of Customer Information and High Degree of Customer
Individualization. This is an Individualized CRM strategy to help better serve their
customers and maintain a long-term relationship.

Low degree of Customer High degree of Customer


Individualization Individualization

Completeness of Customer Individualized CRM


Info. (High)
Future strategy to be
incorporated
Completeness of Customer
Info. (Low)

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