Customer Relationship Management: The Matalan Way

Abstract

This article seeks to contribute to the literature on customer relationship management through a case study analysis of the United Kingdom based club fashion and homeware retailer Matalan. Matalan seeks to deliver value through relationships with staff, suppliers, and most significantly customers. All customers are club members, and every transaction is recorded, yielding a valuable database of member behaviour. Matalan's business model is discussed in terms of 'making the promise', 'delivering on the promise', and 'communicating the promise'. Brand relationships with existing brands drive up quality and build perceptions of Matalan as a quality brand. Direct relationships with manufacturers, and ordering based on customer information minimises costs in the supply chain, and efficient use of staff in service delivery contributes to keeping costs, and hence prices low. The membership database is also the basis for an efficient marketing communication strategy in which the dominant and most effective mode of communication is direct marketing to members, coupled with sales promotions that deliver on the promise of value, whilst also reducing stock levels. Matalan's CRM model is compared with that adopted by Tesco Clubcard, revealing some interesting similarities. Club retailers can be seen as adopting a different approach to CRM founded on the notion of membership rather than loyalty.