Written by Alison Ebbage
Alison Ebbage takes a look at customer relationship management (CRM) solutions in a multi-channel world
Customer relationship management (CRM) systems are moving on from the days of simple loyalty cards and now need to navigate the world of multi-channel sales. Indeed, as clients buy online, as well as in person and over the phone then retailers must find a way to reach out and harness the new data that forms around those various channels. But to be really successful the systems must also be able to engage proactively in a relationship with customers which is both one-to-one and two-way; thus leveraging the opportunities offered by social media and online relationships.
Indeed, CRMs have always been about far more than maximising sales, rather about having a better understanding of customers in order to influence and respond to future trends and demands. Social media offers a unique opportunity to access opinion formers and engage with them in a real-time manner.
Darryl Owen, head of EMEA retail business at SAP, comments: “In simple form CRMs come as loyalty cards where the retailer can collect information on their customers, work out who is buying what and when, and try to tailor offers around that. But most systems are not all that good when it comes to delving further into the data to draw solid conclusions around specific groups and then making targeted merchandising decisions.”
Thus analytic capability to react to rich data already in the hands of retailers is now key. In simple terms this means being able to use powerful analytics to look at existing data and leverage that to cross-sell to a defined user group.
According to Ian Rawlings, Northern European sales director at Egain, a CRM provider, being able to do even this is not as common as it should be. “Retailers already have the information they need but are not using it terribly well. The level of analytics is fairly rudimentary and the data is not often exploited to its full potential,” he says.
Indeed, some systems are not actually able to react to parameters set by the retailer, instead requiring manual manipulation. But these systems will undoubtedly need to be upgraded in the midst of a move to multi-channel real-time retailing.
Jackie Palmer, senior product manager for Infor CRM Epiphany, comments: “CRMs now need to be able to ‘learn’ on their own and look for certain attributes both from online and store transactions in real-time,” she says. A practical application of this might be the CRM knowing that x making y transaction online has been further tempted by z product. When a similar transaction comes up in-store, it should be able to offer that in-store client money off z product in the hope of cross-sell.
Other examples of real-time leverage include e-mails that are personalised and also able to update themselves. For example, if a customer was sent an e-mail on Friday but did not open it until Monday, would that e-mail be able to update itself to reflect the customer’s purchasing activity over the weekend and thus contain offers or discounts relevant to that?
And perhaps crucially, CRMs also need to be nimble when it comes to interacting with customers while they are actually online, thus upping the retailer’s online conversion rate. Egain’s Rawlings comments: “If a customer is on the website with a few things in their basket but then goes idle you can use a prompt to see if they need help. This means that you have a much better chance of making that basket into an actual sale. Other tricks include prompt detailing of what other customers bought to go with x item. You can also look for browsing patterns and identify who is most likely to be online when and advertise tailored offers around that timing.”
He adds that the current internet conversion rates average around just 1.6 per cent. But more than this the biggest challenge for retailers is how to harness ‘inbound’ data, that is where the customer takes the initiative and shares information willingly and knowingly with the retailer via social networks such as Facebook and Twitter.
SAP’s Owen explains: “There has been a convergence of technologies around social media where users are freely imparting information and retailers need to use that.” He gives an example of being able to see if a product is ‘trending’ on Twitter, analyse that to see whether the feedback if positive or negative and make product refinements or discount offers based on that.
“This is how 1.1 marketing communications of the future are going to be,” he says. “Traditional CRMs are not advanced enough to harness this active participation and one-to-one marketing opportunity, but I think retailers are all too aware that this represents an unmissable opportunity and are looking to spend a significant proportion of next year’s CRM spend on this.”
And direct interaction with customers applies to all, not just the younger generation. An example of this is Marks and Spencer, whose designers made prototype designs available online and asked customers what they thought. Those that responded received notification when the product range came out. Burberry too has undertaken similar initiatives.
The crucial change of focus is, then, that customers are the ones making the trends rather than retailers simply relying on forecasting. And this can be applied across all age ranges and interest groups and retail types from supermarkets being involved in Facebook cookery clubs, to make up ranges showcasing demonstrations online.
But Egain’s Rawlings warns: “Social media is very hard to manipulate at the moment and requires massive investments to make sure that the data provided by two way conversations can be effectively analysed and used.”
He also says that CRMs will need to not only be able to turn the data around quickly, to reflect the real-time nature of the internet but also be able to interact with more in-store and telephone systems to allow for a holistic overview and be able to effectively leverage all retail channels. “The whole internet revolution has really changed the way that retailers need to use their CRMs but once the functionality is in place retailers should not forget to join it all up.”