Today, with the right technology, retailers can run a complete allocation, creating millions of unique “snowflake” CRM versions – in just 90 minutes.
After reading Gartner’s Market Guide for CRM in Tier 1 Retail, I wanted to understand more about the increasing importance of CRM in retail today, so I interviewed Jateen Patel, EVP Retail Solutions & Business Development at Symphony Retail Ai for his insight.
Q: In the last few years, what do you think the most significant change in CRM for retailers has been, and why is it so critical?
There are too many changes in the last five years to pick just one item, so forgive me – I am picking two.
Advances in Technology:
The advances in data management – both hardware and software – have driven huge changes in sophisticated CRM programs. Five years ago, the offer allocation process was manual. To optimize allocations, it took 60+ offshore analysts 6-8 weeks to deliver a final allocation. Today, with the right technology, retailers can run a complete allocation, creating millions of unique “snowflake” CRM versions – in just 90 minutes. This enables greater allocation optimization – and also ensures that they consider the most recent shopping activity. The advances benefit retailers, content partners, and consumers.
The digital landscape changes so fast that it is hard to remember what it looked like five years ago. For perspective:
- Pinterest was only one year old in 2012.
- Instagram video did not yet exist.
- Twitter had only 200 million active users. Today Donald Trump and Katy Perry together have more than 200 million followers!
More digital channels means that the customer audience continues to further dissipate. CRM is critically important – brands and retailers need to target precise customers no matter where they are. Each channel has unique strengths and dynamics that must be considered to deliver true value to customers. Effective CRM must be able to coordinate the digital landscape today, and be flexible enough to work with the landscape of tomorrow.
Q: Going forward, what do you think will be the most critical components of retail-focused CRM?
The ability to manage the constantly changing and expanding channels is critically important. Not only does a retail CRM solution need to have the flexibility to reach each channel, it also needs to be able to measure and monitor communication across all these channels – in effect be “air traffic control” to manage a customer’s entire experience.
Think about a grocer promoting Thanksgiving. If the grocer talks about turkey via email, direct mail, Pinterest, Twitter and more, customers engaged in each of these channels will quickly tune the messages out. But if the messages are customized to provide recipe tips via direct mail, store hour reminders via text, table setting tips via Pinterest, etc., each message has a unique twist and value that incorporates the strength of each channel.
Q: How do Symphony Retail’s solutions for retailers incorporate the 5 major CRM processes, as defined by Gartner?
SR Personalized Marketing allows users to select a precise audience with precise offers for each campaign. For example, if a retailer is talking to best shoppers, they may select 6 reward offers and 2 grow offers for the mix of the 8 offers. For secondary shoppers, the mix could be changed to 4 reward offers, 2 grow offers, one new category offer and one threshold offer. The beauty of the SR Personalized Marketing system is that the content is strategically driven, and the system optimizes the content.
We allow users to select different content and different offers for various levels of loyalty. For loyal customers (primary customers) that you understand well, our Personalized Marketing solution can use precisely targeted narrow offers. For secondary and tertiary customers, you can provide fewer offers with broader appeal. These are customers with less robust customer history. Of course, as with any retail CRM program, different tactics can be tested and precisely measured. The offers and audience can constantly be refined and optimized. We enable different executions for different audiences, and have clear reporting included for every campaign.
SR Personalized Marketing is well-suited to execute in-store programs with a native application that can work with any retail app and deliver targeted messages at any time. Please allow me a moment of advice for the readers: a mom shopping in grocery with three kids does not expect – or want – a text message for $0.25 off Cheerios. Retailers need to exercise caution when choosing to execute in this manner. Do you remember when Target put beacons in every store? Every customer with a Target App got a text for makeup. As a 43-year-old male, my need for makeup is minimal. Customers expect you to know them and understand them, and only send relevant offers. SR Personalized Marketing makes this level of precision possible.
Real Time Offers
Once again, SR Personalized Marketing can deliver real-time offers. Via mobile, this can be done with geo-fencing, so you can target everyone at the local fair or concert (or whatever) and invite them to your store or restaurant for food and drink before the long drive home. Our solution also enables geo-fencing, so that you can target customers close to your store – or close to the competition. As I mentioned above, these messages are very powerful and must be used sparingly. Nobody wants a message every time they pass within 2 miles of a Starbucks.
This is one of the most powerful assets of our solution, and one of the best assets of any retail CRM program. Everything in CRM can be precisely tested and measured – and our solution does all of the work for you. We measure the impact of every campaign, and also the impact of every offer in every campaign. With our top clients we also hold out a “universal control” – households that never receive an offer message. The universal control group enables us to measure the longitudinal benefit of campaigns over time, and show that loyalty drives profitability with each campaign, and also grows and strengthens over time.
Q: In your experience, what are CIOs looking for? How do certain solutions fall short, and where are retailers missing the boat?
CIOs are looking to do more with less. Margins are squeezed, and new hires are harder to get approved. SaaS solutions make a CIOs job a little bit easier. SaaS requires no hardware, no updates, no installation, etc.
In terms of “missing the boat,” for years companies have said, “I can build a unique program for CRM that fits my unique business.” These internal solutions were 18 months away five years ago, and they are still 18 months away today. The demands of retail CRM are getting more complex – and a DIY solution will never be able to keep up with the channel expansion we are seeing. More and more CIOs are recognizing that one of the most important decisions they can make is the “build or buy” decision – and buying today delivers much greater speed at a much lower cost.