Customer Relation Management Customer Relationship

Customer Relation Management

Customer Relationship Management: CUTCO Cutlery

Company Overview

CUTCO Cutlery describes itself as a crafter of "fine kitchen cutlery" (Alcas Corp, 2007). CUTCO first began supplying knives to consumers in 1949. CUTCO claims "skilled craftsmen" manufactured these knives from their factory located in Olean, New York.According to CUTCO management it is the "personal touch" they give to their craftsmanship that results in fine cutlery people around the globe can enjoy.

CUTCO Cutlery conducts business in a unique manner. The company site claims they incorporate quality and innovation in each step of the manufacturing process. This process includes: "blanking, heat-treating, blade polishing, hollow grind, handle molding" and other critical steps that help the company produce high quality and "razor-sharp" instruments for sale (Alcas Corp, 2007). Much of their product is sold by independent sales representatives of Vector Marketing who present the products created by CUTCO to eligible customers often using direct sales or by going door-to-door (ConsumerAffairs.Com, 2007). Potential buyers can also inquire about the products sold by CUTCO using the company website, which provides comprehensive information on the history of CUTCO, the craftsmanship put into the company's products and information about fairs and shows the company plans to attend, which offers prospects an opportunity to buy products or become an independent sales representative (Alcas Corp, 2007).

CUTCO recruits potential employees primarily through their website using a "careers" section. Here potential employees will find opportunities to work part-time, full-time, or as independent contractor. The company encourages recruits by providing "success stories" online which may persuade prospects to sign up as a sales person. The company also provides a list of its benefits in the career section of the website, which include flexible scheduling, "advancement opportunities" and a "fun environment" (Alcas Corp, 2007). As a bonus, the website claims no experience is necessary to join the CUTCO "team." Then the company provides a briefing of its achievements and outlines its customer base to potential sales prospects.

CUTCO manages sales using independent contractors and full-time or part-time paid employees (Alcas Corp, 2007). According to ConsumerAffairs.Com (2007), recruits are required to first buy CUTCO Cutlery and then sell it to prospects by going door-to-door. The company arms them with information about the company and their relationship with Vector Marketing. CUTCO promotes many "success stories" on its site about contractors that create their own small businesses or "entrepreneurships" by using the CUTCO sales team system. Many people buy into this claim, thinking they can make a lot of money in a little time. Customers receiving or buying the goods can buy them direct from sales representatives that carry stock, or at trade shows, fairs or other special events. These are all claims made by the company site and previous employees.

Using a SWOT analysis the researcher can provide a closer look at the inner operations of CUTCO. "SWOT" is short for strengths, weaknesses, opportunities and threats. How CUTCO currently manages these factors is interesting. The company strengths include its "brand name" and the quality of the product they provide. The weaknesses include the company's inattention to details related to the way or manner in which it recruits and treats employees or independent contractors. There is much criticism in the press about the way CUTCO recruits potential sales reps. Opportunities exist for improvement at CUTCO, including improvements in the policy making and representation of the company. The company has an obligation to provide truthful information and not rely on information that is not 100% accurate. It also has an opportunity to become a leader in its industry because there are few companies that have the branding strategy and influence CUTCO currently maintains. Threats to the company include press releases regarding questionable hiring and recruitment policies, and the threat that other companies without any bad press may enter the market and compete directly with the company.

Four Critical Strategies - Customer, Channel, Brand, CRM

It is important a company like CUTCO Inc. address each of the four critical strategies to better their business. They can address each of theses factors independently or all at once. The customer can make or break a business, so it is critical that CUTCO Inc. maintain their image so that customers continue buying products from the company. To do this CUTCO must consider the SWOT analysis mentioned above, and address any threats, while taking advantage of opportunities it may have for expansion. Channel strategies involve distribution. CUTCO would benefit by utilizing channel distribution strategy as a tool for entering and remaining stellar in the market. Just as a channel might direct the flow of water, CUTCO can create a channel that is small enough to provide them with the money they need to continue their business, but not too small because this may result in a backflow of water (QDI, 2007). Backflow may then result in toxins or other problems that prevent the company from providing good quality services. QDI Inc. (2007) describes this process by referring to a pipeline; when pipelines become clogged or "filled with impurities" the result is "poor quality products" or services. This will result in lower profits and higher than average expenses for sales and marketing (QDI Inc., 2007). They also suggest the flow of water or the pipeline may "fail" if the channel is not built strongly enough to handle the job or product output by a company.

CUTCO Inc. must also work on branding, meaning people need to get to know the name and immediately associate it not just with knives, but with superior and quality cutlery that gets the job done right. While it is sometimes difficult to brand something, CUTCO has done a fair job of making their name and segmenting a place in their industry. They could improve their image and perception further however, by looking at CRM to improve customer's perceptions of the company. This is especially important given poor reports from former employees claiming the company does not live up to its employee/employer contracts. Many employees suggest the company hires independent contractors to avoid taxes (ConsumerAffairs.Com Inc., 2007). People will automatically associate any liabilities or litigation with poor service or questionable practices. To improve their image in the market, CUTCO must immediately gather its employees or independent contractors and develop a human resources policy that specifically and exactly describes the job functions and roles CUTCO expects its contractors to fulfill. The company must also refrain from making false statements about what contractors will and will not be doing, or the company will lose credibility and face much hardship when trying to recruit future employees.

Customer Relationship Management is a "company-wide business strategy" that in theory should allow businesses like CUTCO to reduce their costs while increasing profitability (Information Today, 2002). To do this the company must create a loyal customer base. Loyalty comes with trust, meaning CUTCO must also establish trust, not only with its external customers, but also with its internal customers, which include independent contractors and formal employees. CUTCO can use CRM to gather information from all of the "data sources" within the company to identify their exact customer base (Information Today, 2002).

Once CUTCO identifies their customer base, they can then talk to contractors and their employees working in sales, marketing or customer support to help them make "informed decisions" when selling to customers or marketing their products (Information Today, 2002). If CUTCO wants to survive and remain competitive, it must adopt a CRM policy that is customer and contractor focused. The company must learn to fully inform customers and contractors of their policies, practices and any efforts the company has made to compensate for past failures. They must also demonstrate what initiatives they are using to help bolster ethical and moral business practices all while still providing the best possible product to their external customers.