When Customer Relationship Management was only a baby in the 1980’s, it was limited in its ability to do more than just be your drooling digital rolodex. It was also really into glam rock.
Eventually it began to crawl, providing businesses with more useful information like transaction tracking.
As it grew to adulthood, it became adventurous and experimented with new skills like cloud computing and basic integrations with marketing tools like social media and email service providers (ESPs).
For most of the CRM journey, performing any sort of analysis on customer data was relegated to those who knew SQL. And even then, the insights were mostly historical in nature. Then CRM moved into the world of predictive analytics, providing marketers with insights about what customers might purchase in the future.
Today, the CRM database represents a treasure trove of information for retail marketers to leverage towards improving customer acquisition and retention. But all too often, this data sits unused because it’s either too hard to manipulate, or too cumbersome to “connect” to other marketing platforms.
Now, in 2018, the bar for CRM has been raised. It’s not just your customer database anymore, it should be equipped to deliver value from day one.
If you are aiming for marketing effectiveness but your team is unable to fully utilize your current CRM, or if you are shopping around for something new, here are 5 questions to ask before you sign that dotted line.
1. How can we use customer insights to increase repeat buyers?
There is always pressure to increase revenue, and it’s no secret that retailers should be investing in the retention of repeat buyers to do this. According to research by Bain & Co., increasing retention by just 5% can increase profits by 125%. The best way to achieve this is through out-of-the-box predictive insights and segmentation capabilities that unlock the potential of customer data. A CRM should give marketers access to insights like customer lifetime value, churn detection, and product affinities, so you can enhance and personalize your marketing efforts to deliver timely, relevant and effective messages — making your customers feel like they are the only ones in the CRM room. Sometimes, these insights can be hidden within the CRM data, but it’s important this information can be leveraged by your marketing team so they can develop relationships with customers in a meaningful and practical way. Find out whether your CRM system not only stores and processes incoming data, but has the ability to easily identify insights to improve customer acquisition, retention, and lifetime value.
2. How will you help us leverage customer data to inform our marketing strategy?
Ok, you have a lot of data, but what do you do with it? What will you focus on? Does this CRM system allow you to move away from promotional emails that eat into margins and instead find a better strategy to engage customers and drive purchases? Yes, I realize that I have added another 3 questions under this question but these are the important ones to ask.
It can be overwhelming when there are a ton of different campaigns you could run, so what should you do first? At Custora, we always say you should start simple and build up the complexities of your campaigns over time once you start seeing valuable results. You can start with quick wins by testing multiple generic, on-brand messages or incentives and measure these against a control group. With advanced segmentation, you can get more granular with your messages and expand to additional marketing channels. An advanced CRM should also provide prescriptive analytics, helping marketers to identify the biggest revenue opportunities to prioritize.
Whatever marketing strategy you decide, it is important that your marketing team has access to measurement tools to quickly determine how targeted marketing campaigns increase revenue/user and profit/user. So, be sure you are using a system that is built to this scale and ability, so your data can be consolidated and enriched for actionable and measurable strategies.
3. Are the CRM tools purpose-built for challenges retailers might be facing?
There are many CRM services out there, but you should choose the best one for your industry, as they can better understand the current landscape you’re in and your pain points, and they have continuously made improvements to their product by incorporating feedback from similar customers. There are specialized CRMs for healthcare, real estate, B2B, and there are specialized platforms for retail, like Custora (wink). Retailers face many challenges in a frequently changing sector, including strong competition and difficulty preventing one time buying behavior. It is important to find a provider that knows your needs, strives to solve your problems, has industry knowledge and can provide valuable insights such as price sensitivity, predicted product affinities, and persona clustering.
4. What are my competitors using? Why?
Like with any business decision, it’s always a good idea to conduct a competitor analysis before choosing your CRM provider. When your competitors have a really good CRM, they have the advantage of better customer insights, leading to increasing revenue and customer loyalty. Our advice is to check out the CRM’s website to find testimonials and case studies from current customers. This will allow you to see who the provider is serving and their customers’ experience with the platform. If you work within the retail industry, ask yourself, ‘what are the top retailers like Tiffany & Co., Crocs and J. Crew using to increase their ROI, lift revenue per user, and dramatically improve their marketing performance?’ (hint: the answer rhymes with mustora).
5. What kind of customer support can we expect?
A good CRM provider should provide a dedicated team to identify your goals, explain how the system can be applied to your database, give you helpful tricks and tips, deliver quarterly business reviews, and work directly with your vendors and check in on a weekly or bi-weekly basis to discuss prescriptive guidance on loyalty strategy. If your current CRM account owner is only concerned about the lack of users logging in, you should instead be working with a CRM team that can become your thought partners, rather than just pushing the usage of the product.
Though you might be thinking you have already spent time and money on a CRM system, your customer insights may take too long to access, or perhaps your data has become such a hot mess that you can never fully trust what it tells you. This is where Custora comes in. We act as a CRM activation tool to make your segments awesome and easy — giving you point-and-click access to all your customer insights.
And for those high growth companies who have yet to invest in a CRM system, Custora can also serve as that central repository for first party customer data that extracts insights and connects them to your collection of marketing tools.
Interested in learning more? Request your demo here.