The retail industry has been driving advancements in CRM over the last 20 years. Recently the CRM industry’s shift to SaaS has dramatically lowered the barrier to entry and allowed many companies to take advantage of capabilities, analytics and automation that were previously only accessible to the largest organizations and Tier 1 retailers. At the same time, retailers’ desire to develop a more customer-centric approach to interacting with their customers has driven even more adoption in the CRM market. The market is becoming downright massive: Gartner predicts the market will be over $36B by 2017.
With all the investment in CRM and the push for customer-centricity, why are so many retailers still struggling to engage their customers in a relevant, timely way?
The fact is, managing the interactions with customers and designing programs to generate awareness and sales through many different channels often comes at the tail end of the strategy. It takes vision, creativity and discipline to design programs that can be targeted enough to feel personal and relevant to consumers. Throw in Big Data, and analytics can be downright intimidating to retailers, in part because it requires expertise beyond their comfort zone.
At the same time that the CRM industry has been expanding, we have been seeing the widespread adoption, or at least widespread discussion, of how advanced analytics can improve business performance. It is imperative those CRM professionals, marketers and anybody responsible for customer loyalty understand how analytics can help them advance from a “batch and blast” model to one that is designed to be relevant, timely, and scalable.
Personalization can be designed on a “sliding scale” – so not every interaction has to be “one-to-one.” The creative and campaigns that have been designed for batch campaigns can be delivered in a more timely way using analytics to predict when various customer segments are most likely to respond. In marketing, we used to say “any segmentation is better than no segmentation” – and it’s important for CRM and marketing professionals to begin to understand how they can employ analytics, no matter what the brand, resource or financial constraints might be. Campaigns that are tailored to customers’ behaviors – even without personalized content – can drive 10x improvements in response rates.
In a recent analyst report (which by the way, FICO was recognized as a vendor with critical analytic capabilities for retail CRM), analytics were cited as a critical component for successful CRM vendors in retail. Surprisingly, many traditional CRM vendors have yet to integrate analytics into their platforms, and vendors whose roots are in analytics have leapfrogged the traditional vendors in this area. You can read the full report here.
There are many ways to integrate analytics that don’t require throwing out investments in CRM capabilities that lack Big Data analytics. I will discuss the topic of embedding analytics in CRM further in my next post.