Customer Relationship Management (CRM) strategies are an important aspect for retailers to consider. After all, retail success depends upon fully utilizing retail marketing solutions;to develop long-lasting customer relationships. Retailers who have access to the latest and most accurate information about their customers have an upper hand in creating and fostering customer loyalty.
Knowing your frequent customers and big spenders is half the battle of CRM. Establishing their profitability is the other half.
Benefits to establishing a CRM model:
- Transforming the customer experience and get a better understanding of customer needs
- Improve quality of service
- Enhanced customer loyalty and retention to increase profits
- More effective promotions and loyalty programs
- Better forecasting and budgeting of sales for segmented customers
- Increase up sell and cross sell opportunities
- Create more effective marketing campaigns based on past history and known preferences and aligning the marketing campaign with the target audience.
Customer behavior can be analyzed and monitored to understand their decision making patterns and allowing for the customers to be better served. The sales history of a customer can be reviewed for customized service or to provide the data for promotional marketing campaigns.
Once the data is obtained, it can be segmented in a number of ways - by geography, demography, brand loyalty, purchase history, etc. - and used in marketing and incentive campaigns.
Some retailers target the top 20% of their customers based on purchase amount. But, how do you get those customers back in and buying more? The key is understanding who they are and what they're buying. Then, you can fine tune your direct mail better.
It makes sense to integrate back-end applications like merchandise and inventory management with your CRM package. After all, you obviously can't keep a loyal customer coming back for his favorite brand if you discontinue it.
One issue that needs to be addressed is being able to measure profitability. Loyalty does not spell profitability. The sale of high ticket items means nothing if the return rate is high or margin is very low. Retailers need to analyze the profitability of their 'preferred' customers to determine how much money they should spend on keeping them.
Retail CRM is directly linked to the customer and in turn results in improved sales and Return on Investment (ROI). These are achieved through effective data management. The ROI depends on how retailers are managing their customer relationship based on their ability to aggregate, analyze, and apply a range of data sources such as Point of Sales (POS) and customer information. The major business processes for retail CRM are campaign management, in-store CRM, customer analytics, master data management, and a collection of customer information at POS.