Retail CRM (Finally) Comes of Age
Direct Relationships with Consumers Accelerates CRM in the Retail Industry
Yogi Berra once advised In theory, there’s no difference between theory and practice, but in practice there is.
Retail CRM has become an underlying platform supporting proven business development strategies — such as omni-channel communications. customer experience (CX) management, social media engagement, loyalty programs, precision marketing and mobility among others — but for too many retailers these practices still appear to be theories.
The gap between retail leaders and laggards is growing. Despite the retail industry research, retail best practices and numerous case studies, many retailers sit the sidelines with regard to new consumer engagement methods and technology adoption. These retailers know their customers are ahead of them but defer innovative retail strategies and in turn find themselves perpetually behind their customers.
It reminds me of the 1990’s when retailers took a slow approach to creating their websites, and later their ecommerce platforms. And like that era, today’s consumers who expect to connect with their new and favorite brands over social, mobile and other channels are not a fad and are not going away. Retailers can adopt consumer strategies and supporting technologies now or they can wait until these strategies themselves become commoditized. Adopting them before competitors will result in increased consumer engagement, market share and business performance.
The Retail CRM Tipping Point
22 years after the term Customer Relationship Management was coined, retailers are adopting CRM in mass for the first time. So why now? Because for the first time brands, manufacturers, retailers and others are pursuing direct relationships with consumers.
Consumers have led the way, using social media and mobility to connect and communicate with each other and their brands in ways not previously possible. Smart retailers are responding by adopting CRM and social CRM strategies along with enabling technologies in order to engage consumers and build stronger customer relationships.
But it’s not easy. There’s an intense competition for these consumer relationships among the entire retail value chain. Manufacturers, distributors and retailers are all vying for these relationships, and in fact competing with each other for the very limited consumer attention span. In the new battle for consumer relationships, which will define business winners and losers, there will be far more losers than winners.
So how do you win?
First, recognize that building relationships with consumers is not a theory or a fad. It’s here to stay, and it’s a business practice that you can and should adopt now.
Second, recognize that CRM is not a software application. It’s a business strategy aimed at growing mutually rewarding and profitable customer relationships. Don’t make the mistake of trying to substitute technology for strategy, or deploying technology in the absence of strategy.
Third, begin with Voice of the Customer (VoC) outreach and analysis. Don’t assume you know what consumers want as getting this wrong will set back your CRM business results by quarters or years.
Fourth, thoughtfully construct a CRM strategy that becomes your blueprint, roadmap and delivery plan. Your CRM strategy should document clear and measurable objectives in a prioritized order, with specific methods to achieve specific objectives. This allows you to stack rank your planned tasks by payback, achieve the biggest ROI results first, demonstrate early wins and create an environment for sustained success.
Lastly, apply CRM software in order to perform the data management, process automation and closed loop reporting. While software should not precede strategy, it’s also true that achieving retail strategies such as omni-channel communications, CX management, social media engagement, effective loyalty programs. retail marketing automation and the like can’t be done at scale, or quite possibly at all, without CRM software.
Since the advent of the term CRM in 1992, retailers have largely ignored this business strategy as they really didn’t have the means to track and engage consumers in a relevant, personalized and timely manner. That’s now changed, and those retailers that capitalize on these new consumer relationship opportunities will most certainly outperform competitors who continue to treat this movement as just a theory.
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