REVIEWER: Chang Suk Suh, team leader of the customer relationship management (CRM) team for Lotte Department Store.

BACKGROUND: With 23 locations, Lotte Department Store is Korea’s largest department store. Lotte has a 60 percent market share, yearly sales of $8.5 billion and more than 10 million customers. In a project to improve CRM, Lotte conducted a CRM business consulting project with Teradata in 2002 and a CRM implementation project with Teradata in January 2004. The project improved direct marketing (DM) response rate from 30 percent at the project’s beginning to 47 percent in 2007, the customer retention rate rose from 81 percent to 84 percent, the customer acquisition rate rose from 65 percent to 74 percent, and the customer loyalty rate rose from 69 percent to 72 percent.

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