CRM at Moore Medical Corporation - Response to questions about Harvard Business Review Case #9-601-142 Moore Medical Corporation
What problems and challenges are faced by Moore at the time of the case?
Moore Medical is a medium-sized distributor of medical supplies to practitioners such as podiatrists and emergency medical technicians. Up to the time of the case, it has relied on traditional customer channels such as catalogs, phones, and faxes to communicate product offerings, promotions, and availability, and to take orders. It is now attempting to transition into a "bricks and clicks" distributor with a strong Internet presence. It has already made substantial investments in an eCommerce web site and in "back office" ERP software to improve the fulfillment performance of its four distribution centers. The ERP software has not lived up to expectations in all areas, and the company must decide whether to invest in more modules for this system that might address its shortcomings. It must also decide whether to make a significant additional investment in customer relationship management software. At the time of the case, Moore must decide whether it has "enough" of the "right kind" of IT. The decision is complicated by the fact that the company has recently made substantial IT investments that have impacted financial performance and caused organizational disruption. In addition, it is not clear that all of Moore's known issues related to customer retention and satisfaction will be addressed by the Customer Relationship Management (CRM) under consideration.
Problems and Challenges faced:
1. Share of wallet of current customers was not close to 100% due in part because the company did not offer capital goods and has a relatively smaller product range as compared to the larger competitors. i.e. it is not a big force in the market.
2. Churn rate for customers as high as 35% in some categories and 30% on an average whereas the industry standard was 25%. It was estimated that it was largely due to low customer loyalty and very high price sensitivity.
3. Split shipments were an issue due to
Moore Medical is a medium-sized distributor of medical supplies to practitioners such as podiatrists and emergency medical technicians. Up to the time of the case, it has relied on traditional customer channels such as catalogs, phones, and faxes to communicate product offerings, promotions, and availability, and to take orders. It is now attempting to transition into a "bricks and clicks" distributor with a strong Internet presence. It has already made substantial investments in an eCommerce web site and in "back office" ERP software to improve the fulfillment performance of its four distribution centers. The ERP software has not lived up to expectations in all areas, and the company must decide whether to invest in more modules for this system that might address its shortcomings. It must also decide whether to make a significant additional investment in customer relationship management software. At the time of the case, Moore must decide whether it has "enough" of the "right kind" of IT. The decision is complicated by the fact that the company has recently made substantial IT investments that have impacted financial performance and caused organizational disruption. In addition, it is not clear that all of Moore's known issues related to customer retention and satisfaction will be addressed by the Customer Relationship Management (CRM) under consideration.
Problems and Challenges faced:
1. Share of wallet of current customers was not close to 100% due in part because the company did not offer capital goods and has a relatively smaller product range as compared to the larger competitors. i.e. it is not a big force in the market.
2. Churn rate for customers as high as 35% in some categories and 30% on an average whereas the industry standard was 25%. It was estimated that it was largely due to low customer loyalty and very high price sensitivity.
3. Split shipments were an issue due to