Most CRM Systems Don't Meet Retail Needs
Why Many CRM Systems Don't Meet Retail Needs
1. Most CRM systems are focused on B2B use cases
Many CRM systems are not designed to handle B2C use cases such as tracking individual purchase histories, householding individuals (to identify buyer v/s head of family, etc.), tracking transactions from point of sale system / ecommerce platform / partner sites, handling coupons, etc. In a retail business, tracking these are extremely important as the marketing segmentation are based on these parameters.
2. Loyalty engine is usually NOT built in CRM systems
Loyalty programs can increase customer lifetime value (CLTV) by 30%, if not more. It's due to this reason that loyalty platforms are gaining prominence. While many loyalty platforms are not true CRM platforms, only a few CRM systems are starting to provide capabilities to manage customer loyalty. Integrating loyalty membership, points management, incentives, redemption & core CRM capabilities into a single platform is very critical for retail to stand out from competition.
3. Point of Sale - CRM integration is an after-thought
Retail customer information is typically captured via Point of Sale, eCommerce site or mobile application. Not many CRM systems have out of the box integrations with these systems. Significant effort goes into building data integrations across various systems to make CRM platforms useful. Additionally, data flow between systems need to be painstakingly managed if the right CRM is not chosen.
4. Real-time Customer 360º view is unavailable
Many CRM platforms do not support a true 360º view of the customer, especially real-time information. Customer behavior (on website, mobile apps, social media, etc.) can be very valuable to understand customer preferences and make real-time decisions (by the call center reps). This level of details requires the CRM to be able to support structured, unstructured and streaming data, which many CRM platforms do not support.
5. Data Hygiene in CRM is usually a nightmare
Due to lack of data hygiene capabilities within many CRMs, when a customer engages with a company through the different channels, the CRM may create multiple profiles for the same customer. The ability to perform data cleansing, enrichment & deduplication if not well planned, can be a nightmare for retailers.
Vendors use Many Confusing Terms to Describe their Products
CRMs can provide 180-degree (transactional) view of the customer.
Watch out: Many CRMs are B2B focused & are not built for B2C use cases.
CDPs can be used in real-time & provides 360-degree (transactional & engagement data) view for known & anonymous audience.
Watch out: CDPs are HOT right now & many vendors call themselves as CDPs just to be part of CDP RFPs.
DMPs store 3rd party customer data & is useful to segment customers.
Watch out: DMPs typically don't store transactional data. Also, DMP data is owned by vendor, not you.
Loyalty engines enable businesses to run dynamic campaigns, issue & manage points real-time.
Watch out: Very few loyalty vendors have true CRM capabilities.
These systems integrate identities of customer from various systems together.
Watch out: They don't hold transactional data & don't provide detailed segmentation capabilities.
Data Lake can store any type of customer data (structured & nonstructured) & can be processed / presented as needed.
Watch out: Customizable, but requires lot of technical development effort.
Comparing Various Systems – Clarifying the Confusion
Business Case For A Retail CRM
Measuring ROI from CRM Investments
Increase in Revenue via Campaigns
Increased revenue via better segmentation, targeting & personalization campaigns through email, web, mobile, etc.
Savings from Increased Productivity
Reduced time (or head count) on data collection, data generation, report reviews, etc.
Increase in Revenue via Store Sales
Increased revenue via access to relevant customer data to store salesmen.
Savings from Systems Replaced
Reduced cost of recurring licenses / support costs for managing existing systems that get replaced by CRM.
Potential Revenue Increase & $32m Cost Savings from Retail CRM
Performing Current State Assessment
Why Perform Current State Assessment?
1. Identifying KPIs & Key Metrics
Although you may have KPIs defined already, this exercise will help leadership re-look at the KPIs they want to measure and track within the CRM system. Performing a quick competitive assessment can also align the business benchmarks with industry standards.
2. Understanding Current Realities, Complexities & Bottlenecks
Implementing a new CRM system is usually not as simple as it seems. Understanding current capabilities and limitations across existing technologies, processes and people is essential before undertaking such a gargantuan task. Comfort and reliance on legacy systems (technology debt), reluctance to upgrade due to system fragility and skill level of existing employees would mean that you document and educate the executives about the challenges before embarking a new CRM search.
3. Prioritizing Pain Points & Defining Project Scope
CRM implementations may take years to complete, especially if current pain points are not well prioritized and the project scope is not well defined. Prioritization allows you to phase out the implementation and target the quick wins early. This enables leadership to see the value out of the system and continue to invest more the system for more complex use cases.
Current State Assessment: 4 Key things to Catalog
1. Business Challenges and Goals
Involving leadership, key business stakeholders and primary users of the solution in this process can provide you many insights. Their business problems help justify why there's a need for a CRM platform that solves these challenges. Concrete goals from leadership team and business leads can be valuable to measure ROI from the CRM investments.
2. Current State System Architecture
Documenting and diagraming the current system architecture helps understand how the CRM solution will interact with the existing sources and systems. A strong understanding the data sources along with data & process flows will help in check if prospective CRMs can support them.
3. Technology, Data, & Resource Challenges and Limitations
Assessing the current technology and data challenges will help identify if there are certain limitations and challenges that the CRM system will need to work with. Additionally, team capabilities will help identify if there's a need to hire, replace or cross-train the CRM team.
4. Key Metrics
The current KPIs and key metrics may change with the implementation of a new CRM solution. They may not be in line with the company vision, creating little to no value for decision making. Assessing them will help determine how the new CRM solution can bring value to business.
Business Requirements For A Retail CRM
Identifying Business Requirements for a Retail CRM
With many CRM vendors to choose from, it is possible to select an industry leader that showcases many features and functionalities but provides little to no value for your business needs. When retailers go through a thorough business requirements gathering process with the key stakeholders and primary users, it can help achieve the targeted ROI and address the major shortcomings in the current state.
Defining The Right Evaluation Approach
1. Vendor Requirements & RFP
Once the requirements are identified, you may issue an Request For Proposal outlining the core needs such as specifications, budget, and timelines. This approach works best if you intend to invite many vendors for evaluation. The RFP responses will help quickly disqualify the key vendors and streamline remaining evaluation process.
2. Vendor Demos & Presentations
RFP responses alone shouldn't be considered while evaluating vendors and the responses should be taken with a 'grain of salt'. Most vendors try to check every box of an RFP. This is where detailed demos & presentations will highlight the truths vs. marketing twists. Full day onsite presentations and hands-on demos not only give a better understanding of the vendor capabilities, but will also help develop a better vision for the solution.
3. Vendor Reference Checks (Customers & Analysts)
Reference calls can potentially unearth some hidden nuggets that can help the decision making process. Seeking unbiased opinions (both pros and cons) during the entire lifecycle of the product implementation and usage from both C-level execs as well as actual users of the system can provide useful perspective. Speaking with analysts can bring some insights that cannot be overlooked.
4. Rating System - Consensus & Leadership Approval
Finally, when it's time to rate and select a vendor, the size of your company and the way it operates should be considered. If it is a team consensus, the decision process should be well-thought and well-planned to accommodate the majority. During stalemate, it's important to have pre-defined criteria to break the stalemate. The leadership approval is critical while selecting a vendor.
Evaluation Criteria & Selection
Soft Criteria for Evaluation
Don't forget to evaluate these...
As important as it is to evaluate vendors based on the overall quality of their product and services, features and functionality, and their pricing and timelines, it is also important to evaluate vendors based on soft criteria, as this will help determine how well they will work with your team and company during the implementation process.
Gauging the vendor's participation and reference feedback will determine how committed they are to showcasing their product and services in a timely manner in association with your company. If the vendor is difficult to work with, you may not be getting the most value from the CRM itself and may not be worth selecting.
Reviewing the vendor's history and industry credentials are important as it shows how familiar they are with any regulations, processes, and terminology they need to be successful in implementing a CRM system.
About HGS Digital
HGS Digital is a marketing technology consulting and services provider that has helped marketing and IT teams within 100+ organizations with digital transformation solutions. Through our data-driven marketing services, we help customers select the right CRM systems and implement a complete data strategy that helps marketing teams get higher ROI out of their existing marketing investments.
Our CRM and Data Practice has trained and certified CRM (Customer Relationship Management), CDP (Customer Data Platform), Tag management, DMP (Data Management Platform) and Big Data experts who help clients successfully strategize and implement data-driven marketing solutions within their organization.
By integrating the right data from different systems, we help clients understand their customers better. Through AI and ML based data analysis and reporting, we're able to provide our clients highly valuable insights that they can action upon.