Taking it to the max

Published on Tue, 24/07/2012, 12:30:51


Many retailers are struggling in today’s tough economic climate with customer savings up and spending down. Yet people will always continue to buy products to suit their lifestyle whether it is groceries, clothing, make-up or the latest gadget. So getting under your customer’s skin can sometimes be a case of adjusting strategies and finding tailored solutions to transform one-off buyers into loyal customers.

A key consideration in the current cluttered and technology-led environment is to have a proficient customer relationship management (CRM) strategy. We have the ability to collect vast amounts of data about purchasing habits. However, often companies collect a wealth of data but don’t know what to do with it. In today’s digital society, we create 2.5 quintillion bytes of data everyday — so much that 90 per cent of the data in the world today has been created in the last two years alone.

But how do you turn data into useful information? The first step is to review your company’s processes around how you collect and utilise customer information before you can look at strategies to encourage repeat business.

A key aspect to remember is that you are trying to ensure customer loyalty so you need to make sure your customer communications reflect the nature of your business and offering. Every company will need a personalised strategy, but the basic principles of what makes customers return remain the same.

Major overseas retailers, such as Tesco in UK, have already proven that data is pivotal to increased customer visits and sales. By tailoring their loyalty program they have achieved a 90 per cent email open rate and redemption rate of over 60 per cent, as well as increased sales. This also highlights the success that can be achieved by focusing on your customer’s preferences and habits and tailoring offers and promotions to them.

Be in control of your own data
The main element of an efficient data and CRM strategy is to be in control of all of your customers’ information and store it in one central location. Given the obvious truth of this statement, one might forget that most companies aren’t keeping their customers’ basic information in one place. Instead, different information is often collected in a variety of places and not shared. For example, companies may have a separate point-of-sale system and an email newsletter database.

So, your first step is to merge or sync customer databases. If you’re a large organisation this can be complicated and often requires professional help, but a software provider can work out where your gaps are. If you choose a local solution, you won’t be lumped with a giant bill for flying in a consultant from overseas.

Regularly review and cleanse databases
Companies often overlook the need to keep customers’ basic information in good order. Without correct contact information you are limiting the benefit data can bring to your company, particularly as your existing customers are potentially the greatest source of future business.

A systematic and regular update of your customer database provides a huge opportunity for growth and budget efficiencies. Simply put, this involves a thorough clean-up to reduce customer duplication, as well as ensuring you have up-to-date contact details. Benefits include a reduction in duplicated or wrongly-addressed mail, as well as opening up cross-channel retailing.

This can be very time consuming to execute or difficult to do but there are a number of companies that specialise in this field. It may cost you a bit, but it is money well spent, as a clean database is the starting point for effective customer communication.

Embrace your database and analyse its effectiveness
Customers now expect more from the companies they buy from. Not only do they expect you to know who they are but when, where and what you have spoken to them about during your relationship with them. The holy-grail for retail marketers is to have a single customer view (SCV) of each product and interaction.

Steps on how this can be done, which can be applied to an individual store or a multi-location chain are:
1.    Make your databases the basis for all customer/supplier communication.
2.    Include as much information as possible about your customers such as in-store interactions, phone calls and click-through rates from email messages.
3.    Analyse this information to see what brings your customers back and tailor marketing strategies accordingly.

This can sound very complicated and hard to manage, however there are a number of customisable solutions available on the market – including our Simplicity CRM – that provides a framework for managing customer data and therefore encouraging increased loyalty. These software platforms have been developed to ensure all staff members can input and review customer information, therefore allowing you to maximise customer relationships.

If an organisation can do this successfully they will be in good stead to keep their customers’ loyalty. However, if they don’t recognise the importance of simple data management they are highly likely to lose their customers at an accelerated pace.
Trends in loyalty management
With budgets shrinking across the board, deciding what loyalty offerings to invest your time and money in to achieve the biggest bang for your buck can be confusing.

Working in the loyalty sector I’ve witnessed many missed opportunities by retailers. Think about what applies to you and your customers and what can you put in place to show them that you understand their needs so much they should return. Loyalty cards can be the best way to do this. The technology is available to us, so apply it whenever possible – and ensure it is a priority on your marketing calendar.

For example, what if you bought three cans of baked beans every week and the register took note after six weeks that this is a regular purchase and offered you a coupon with another canned product for free on your next visit. It’s a low-value item, but a small token which then encourages broadening of current shopping habits and inspires your customers to come back – and buy more.

Smaller companies such as cafes and even bookstores do this well, with a ‘buy 9 get 1 free’ card. While simple, these can be highly effective and require a low cost outlay. You can also look at other simple options that are a bit different. If a competitor is already offering this, think about lowering your redemption target and offer customers a ‘buy 5 get 50 per cent off your next purchase’ scheme. Again, this applies to companies that are both big and small.

We have the technology to be able to implement such schemes, so I’d urge retailers to get on board.

Loyalty goes online
There have been a range of technological advances in recent years – not to mention the rise of social media tools – and many retailers are missing a number of marketing opportunities by not placing enough importance on digital loyalty programs.

Mobile loyalty schemes can be a more convenient alternative to paper loyalty cards, but also enable you to develop consistent customer communications that build loyalty and facilitate ongoing relationships. And linking a traditional loyalty program to social and location-based check-ins can be an easy way for businesses to attract new customers.

Whether you decide to go with mobile, social, paper loyalty cards or coupons, the most important thing is to put measurement strategies in place so you gain valuable insights into how your customers interact with your brand.

To reiterate, the most important aspect of managing customer loyalty is having an up-to-date database of all customer purchases and interactions. Having the right CRM strategy and tools in place means you can tailor future communication and hopefully increase efficiencies over time, as well as maximising brand loyalty and the all-important factor, sales.

Paul Dolan is the CEO of Simplicity CRM Australia. He is a CRM strategic consultant with experience in CRM systems, call centres, marketing strategy and management consulting.

Simplicity is a CRM marketing software provider. The company and the software developers are based locally and provide an Australian and New Zealand solution to CRM and loyalty management.



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