CRM: Expert views

6 August 2009 | By Nic Howell, Celina Bublik

CARLY CAZZOLLI

Ecommerce marketing manager, House of Fraser

The principles of CRM remain the same in terms of providing relevant and timely information to your customers, but there have been changes in how the information is delivered and the type of message. A genuine sale message will always excite our customers, but mid-season offers are no longer engaging. The personification of your brand and how it ‘speaks’ with the customer is pivotal in securing a long-term relationship.

These changes are driven by customers deciding how they want to engage with you. Some actively want to discuss your brand on forums or in blogs, use live chat and receive updates through Twitter or Facebook, while others prefer classic communication channels like well-executed direct marketing. This doesn’t impose any significant changes on our CRM needs, although certainly social networking channels continue to grow. Traditional channels such as email and direct mail still play an important role in engaging customers.

It’s more about integration than innovation. A good CRM programme needs to focus on all points of customer contact to deliver a consistent tone and brand experience. Using live chat, as Nordstrom does, or Net-a-Porter’s weekly updates based on a customer’s preferred brands are both intimate ways of communicating. But something as simple as a follow-up email based on browsing behaviour and preference selection, or a ‘thank you’ postcard from a charity, are effective methods of contact.

When relevant, Twitter, RSS feeds and on-site reviews are a great way to allow real-time customer engagement. However, the key is finding a balance between the revenue these activities drive and the revenue from more broadcast channels, such as email or direct mail. It’s a question of whether the customers using these real-time experiences are the most valuable to your brand.

All these channels require an integrated data structure so data management and segmentation are the biggest challenges. There are so many different ways to communicate with your customer, and so many ways the customer can contact you, that you need to ensure they’re feeding into each other so the optimal message is sent to the right customer at the right time.

 

PIPA UNSWORTH

CRM practice director, LBi

The emergence of internet platforms for social networking has rapidly expanded online self-expression from the ‘geeky few’ to the ‘casual masses’. This rapid emergence reduces the effectiveness of traditional communication methods and may dilute even the performance of modern approaches, such as email.

Consumers gather in more places and hold more conversations. Topics vary widely and organisations should be looking to guide these conversations. Once, email marketing with a call to action was enough; increasingly, clients ask how they should be tackling an integrated communications and messaging mix.

The multi-channel approach to CRM is becoming fully digital. Clients are now asking if they should be testing their messages through these emerging channels, if they can push the call to action or be more collaborative, and how they can track effectiveness of these new channels.

The rapid development of internet platforms for social networking is spawning specialist communities for consumers, such as GetSatisfaction.com. At the same time, web analytics specialists are speeding up their offer to provide visibility of the effectiveness of online platforms using integrated reporting suites.

 

STEVE GROUT

UK CEO, Targetbase Claydon Heeley

Data is the basic foundation of CRM and, whereas previously the costs to collect, capture, manage and process data were considerable, much of it’s now self-serviced. Customers give us the data by being online, requesting information and completing details. We can then use smart tools to see what they’re doing.

Before, a direct marketing pack might cost 50p to £1. Customers now go online to get information, or we can send it via MMS or email for an incredibly low cost. As a result, CRM is easier to implement. Marketers can understand and communicate with consumers individually. Prior to these advances, CRM was only possible to a limited extent by targeting segments rather than individuals and realistic only for certain industry sectors with larger budgets, such as cars and airlines.

Many clients have legacy systems from which the data is hard to integrate. Beyond that, many clients are still organised in silos so that departments defend their channel and budgets rather than think of the individual customer and what’s right for building a relationship to add greater customer value. The challenge for CRM now is how to create brand engagement without irritating people. For example, Twitter allows people to be strongly engaged with a person or a brand and it can be particularly good around customer service programmes. But we have to be careful how it’s used.

 

RICHARD MADDEN

Planning director, Kit Catt Nohr Alexander Shaw

CRM is becoming more of a conversation on the customer’s own terms, due to the fact that consumers are becoming increasingly irritated with irrelevant communications. As a result, brands are slowly waking up to the fact that what’s fascinating to them may be less than fascinating to their customers.

The recession has accelerated a trend we spotted well before last year, namely that CRM projects have to deliver a positive ROI within 18 months. This makes solid business modelling absolutely imperative. ‘Build it and they will come’ is very much an attitude of the past.

We’re noticing three innovations having a big impact on CRM. First is the integration of user-generated and peer-to-peer content - Amazon stands out here. Second is the integration of mobile applications by retailers such as Ocado. Last is the engagement of customers in product development. It was amazing to see a huge company like Boeing doing this in its development of the 787.

CRM is responding to the trend for real-time experiences badly. Most rules-based CRM systems are too rigid to accommodate this. It’s often better to see this as a separate activity, at least for the time being. The biggest challenges facing integration of digital and offline CRM systems are that many databases set up to serve direct marketing can’t be addressed in real time.

Remarkably, many clients still lack a coherent and effective strategy for getting customers to provide their email addresses. In some cases the online and offline customer conversations are owned by different teams. At worst this creates competition, at best it makes joined-up communications more difficult and often more costly.

 

GABRIELLA PETTER

Senior strategic partner, TMW

The work we do for Nissan is 100% CRM. We’re seeing what we do in a much broader context of social media. We encourage Nissan to see that there are many influences at work and that we’re just one of a number. Our role is less about selling and more about facilitating a buying experience.

One of the things we say is CRM isn’t necessarily driving people through a standard purchase funnel. It’s much more about being responsive and delivering the right message at the right time, and not necessarily through a traditional direct marketing channel.

The traditional CRM model is what I call triggered communications: the kinds of things we’d do as matter of course. But we need to consider there’s more going on outside that arena. We might be looking outside our customer base and looking at people who influence them.

The traditional purchase funnel only has meaning in certain areas, where you’re trying to formulate a very standardised customer journey. How people gather information and how they purchase is much broader. Therefore we need to consider how our communications are received among all the customer reviews, for example.

Nissan wants innovative ideas that can increase consideration and drive opinion, and that’s not really just about triggers. It’s about helping customers understand the brand better, to see value in the model they have and talk about the car more. Those kinds of things will help customers get involved and see the value of Nissan more.

 

MICHAEL ROSS

Director, eCommera

CRM needs are changing with the growing recognition that thoughtful segmentation of customers is increasingly significant. They’re moving from simply sending out broadcast emails to looking at how to segment those emails optimally using RFMP - recency, frequency, monetary value and what the consumer actually purchased - in one category.

This is where the market is at the moment. The two big challenges are how to segment as effectively as possible and how many segments you should be managing. A couple of years ago, driving sales was key; now people care about profit, so there’s increased sensitivity around marketing costs and acquisition costs. An economic shift has forced people to look harder at their customer base.

There are two examples of innovations making a big impact on CRM. One is behavioural targeting. As people become wary of marketing emails, targeting has moved to banner ads adapted to what people are looking at on the site. This will improve. Second is Twitter, which is an interesting email substitute, part of a dynamic world.

As far as real-time interaction goes, none of these things is radical, just evolutionary. Smart retailers put offers on Twitter, MySpace, Facebook and so on. ASOS, for example, has cited Twitter as a massive source of traffic.

The biggest challenge facing integration of digital and offline CRM is finding a unique cross-channel identifier. Online you have email identifiers; offline there are none unless the customer uses a store card. A hotel might take an email address to guarantee a booking and send offers. Retailers need to add value to the identification process.

Online purchasing patterns could be used offline. If you put something in your etail basket but don’t purchase, then you could be intercepted at the point of sale in-store and offered those products. How we identify people across channels is the battleground.

 

MARTIN HAYWARD

Director of strategy and futures, Dunnhumby

CRM has risen up most clients’ agendas in the last year. A recession is a great way to remind companies that customers need to be understood and managed properly. The seemingly endless growth in consumer spending is well and truly over for several years. This means customer retention driven by better insight and communication is a priority.

There’s also a greater focus on the ROI of marketing activity as budgets are squeezed. This too bodes well for highly targeted and accountable messaging to customers.

The underlying innovation driving CRM take-up and efficiency comes from the continued explosion in the speed and granularity of customer data available. Many companies now have access to detailed customer data for insight, segmentation and targeting purposes. This is only going to continue as commerce and media digitise, creating automatic insight into behaviour down to the micro level. We now analyse the purchasing behaviours of more than 300m customers around the world for our retail clients, frequently reporting on this data within 24 hours.

The challenges facing the integration of digital and offline CRM systems remain complex. It’s only a matter of time before most of the technical issues are overcome, now most companies understand the requirement to offer a seamless interface across channels. To be able to browse online, buy in store, arrange home delivery and return in-store is the expectation of many shoppers today.

The only companies that will have privacy issues are those that aren’t completely transparent with customers about what data they’re gathering and for what purposes, or those that haven’t sought the permission to use this data for improving their customer experience.