Through a special arrangement, what follows is an excerpt of a current article from Retail Paradox, RSR Research’s weekly analysis on emerging issues facing retailers, presented here for discussion.
CRM (customer relationship management) has long been a bad word in retail, ever since some retailers spent millions trying to implement it in the late ’90s and early half of the ’00s. But if CRM Evolution, held in Manhattan in mid-August, is any indicator, the CRM solution space is undergoing a massive change.
The biggest impact is due to social media. At first glance it would seem like I’m talking something gimmicky – social business for social’s sake. But sales is a relationship-driven process, and solutions need to conform to and embrace that necessity. Retail is no different. But more work needs to be done to develop a real understanding of the sales process in every relevant department, from store floor to contact center.
It will help to keep in mind a very broad definition of what constitutes "social" in an enterprise context today – everything from corporate blogs to videos to internal Twitter- or chatter-like activity feeds.
On the retail sales floor, social in clienteling will be about comment streams or ratings and reviews by employees that they share internally with each other, or perhaps to build stronger relationships with their customers. It’s about leveraging the entire employee base to get help, rather than the limited resources of the local store or store manager. It promises to help make every employee as smart as your smartest employee.
Employee expectations around tools are also changing as more and more entry-level sales positions are staffed by Gen Y and beyond. One presenter at CRM Evolution talked about how they had "gamified" their sales process to encourage employees to use the system – providing weekly, monthly, quarterly, and yearly rewards based on social recognition – to the employees who helped others out the most or posted the most valuable content.
Having probably already been trained by games as diverse as Farmville and WoW, future sale staffs will bring the expectations that those games set at home into the workplace – which means that retailers need to provide a way for employees to connect with each other – especially beyond the boundaries of the store. Provide social recognition within that context for people who are positive contributors to the community. Give them goals and update them – in real-time – on how close they are to achieving those goals. And make those goals progressive, so that there’s a new one every day or every week. And finally, change the incentives over time to keep them interesting.
CRM isn’t what it used to be. It’s not even CRM 2.0 any longer – it’s really on the way to CRM 3.0. Hopefully retail will have a better idea of how to use it this time around – the customer experience is likely going to depend on it.
BrainTrust
Discussion Questions
Is CRM still a “bad word” in retail? Do social and gamification trends in CRM promise to breathe new life into in-store CRM tools?
Poll
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Does anyone remember what problem CRM was supposed to have solved? When the solution becomes the problem, something wasn’t plugged in.
Now “social” media will take over? I don’t understand why we’d call it by the same name as a process most people hate and that customers don’t care about. Call me skeptical, but I still don’t see very much that’s truly ‘social’ in social media. Lots of noise, but very lean in terms of revenue generating results.
As a former retail marketing person, I’m not sure I ever regarded CRM as a “bad word,” but rather more of an often elusive goal. Nikki Baird nails it when asserting that both technologies and mindsets have radically changed over the past few years. Adaptation rates to new technology and social media systems are rapidly increasing and with that, retailers will be smart to incorporate both in the business practices for employees and customers.
While I recognize progress is being made in the area of “monetizing” all of these new engagement tools, much more needs to be done in terms of convincing retailers that investment in social media is worthy of their scant capital or expense budgets. Those service providers that can offer affordable tools with high levels of employee and shopper engagement, AND can cogently link this activity back to incremental shopper behavior and sales, will rule!
Customer Relationship Marketing or if you prefer, Management, remains as relevant and important today to the success of the enterprise as it did 10 or so years ago when it was coined “direct marketing” or 1:1. Social is but one more channel and yes, advertisers need to adapt/leverage it to remain timely and relevant to their current and future customer base. The aspect of employee engagement is pretty cool — I am certain that human resources staff will have a significant challenge in managing this aspect — addressing what is shared, content, compliance.
3.0 relies heavily on improved capabilities in leveraging insight in real-time to support two-way communication/response in order to influence/capture the sale.
I believe gamification concepts will breathe new life into CRM tools.
I find current CRM to be nothing more than flat data such as a filtered list of customers contact information to send mass mailings. In addition, data mining against flat data is not much exciting either.
By using gamification metholodies, the CRM transforms from flat data to object orientated data. We can now apply attributes and methods to an object (a customer) and create a domain environment (seasons, events, etc.) and optimize the best iteraction possible on object-orientated analysis.
CRM is still a bad word in that most retailers adopt CRM programs as a means of enhancing their bottom line on the cheap. The CRM is almost never employed to inform the consumer or provide the consumer with the best value. Nothing can be done to change this until the retailers realize that they are not providing the experience the consumer is looking for.
Retailers should spend their money on hiring right, training right, and providing value at every level. This is not impossible! There are many retailers who do it well. There are also many more retailers who don’t have the ability to do this at all, due to ignorance or just plain laziness. And gamification is just another word for gaming the consumer. It will not overcome the lousy management that seems to abound at retail.
I think CRM may be a “bad word” in general, and not just in retail. We may tack on new definitions and techniques; we may quibble over whether we are “managing” or “marketing” to “customers” or “consumers”; but where CRM is very often off the rails is on the subject of the “relationship” itself. We seem to systematically forget that the owner of that relationship is the shopper, not the institution.
There is certainly great merit in continuing to refine our methods of identifying, classifying, segmenting and responding to shoppers. The social media revolution and Big Data from online commerce and search have demonstrated that there are other ways to skin that cat besides frequent shopper card programs and recency-frequency-monetary (RFM) analyses.
Gamification has promise, IMO, as way to engage employees and consumers in interaction. Imaginatively applied, it could breath new life into frequent shopper programs. And yes it holds potential to favorably influence customer service delivery in some retail environments. Keep an eye on this trend.
For what it’s worth, I’d favor dropping the term CRM entirely, in order to separate innovative current practices from the inward-focused legacy methods of past decades. Instead of CRM 3.0, how about SSP — Shopper Success Programs?
The only problem with “CRM” is that the term reminds us of ancient data analysis tools. “Consumer Analytics” sounds more modern and cool. Even if “analytics” is a relatively new word in our language, the word implies scientific analysis, far deeper than in the past.
The tools that exist today bridge the gap that included “gut feel” in the past. Very little is left up to interpretation with the best in class analytics software today.
Those who know me best know that I coined the concept of “CMR” (Customer Managed Relationship). CRM is such old news. Customers don’t want to be managed — they want to be the managers.
Any discussions of CRM are moot.
To me, CRM represents the pipeline built as a vehicle to transport a valuable resource (relevant value proposition) to a targeted customer. Imagine a hot summer day in New York City. Kids like the idea of playing in water shot from a fire hydrant. They care little for what type of pipes lay underground. I’ll bet retail customers have the same attitude.
Adding Social as a prefix to CRM reflects a brand’s response in recognition that the customer, not the company, is in control of the conversation. Social CRM is an extension of CRM, not an entirely new concept, and simply expands CRM to include and embrace digital channels.
I like the specific examples offered up in the article as they are realistic and practical. Including digital channels into CRM may allow retailers, for the first time, to realize the promise of “1 to 1” marketing within today’s marketing budgets.