Modern retail business model is unimaginable without a proper and smart customer relationship management or CRM. Now, CRM might include a whole set of certain practices, attitudes, approaches, and tactics. It is especially important in retail segment as such businesses are 100% client-oriented. A CRM system is one of the pillars of effective marketing since it makes possible precise targeting of certain customers to increase sales accuracy and efficiency. It is up to CRM to collect and analyze client data. This information allows to personalize ads and create a more detailed customer portrait.
Speaking in broad terms, CRM initiates targeting and targeting ignites demand with supply already on the way. Thus, you may know what your clients want even before they know it. You may even create demand by predicting the behavior of your clients. It is possible to do with effective collection of client data and its even more efficient analysis. The output of effective analysis is a specified marketing strategy which increases profits, reduces expenses, improves product quality, converts clients into loyal customers, etc. Below you will find out what is CRM, how it works and what it does as well as benefits of using a custom-made CRM software instead of hiring a specialist or adopting a ready-made software solution.
- What is CRM in retail?
- The Effects of CRM in Retail Markets
- Who Will Benefit from Gathering and Processing of Data
- Big Data processing to reveal actual shopping trends and personalize ads
- Custom CRM Development Benefits
- The absence of CRM software and its risks
- Frequently Asked Questions
What is CRM in retail?
CRM in retail business:
- Increases customer satisfaction
- Reduces costs
- Improves company’s overall performance
- Optimizes many routine processes
- Collects and analyzes client data
- Shows sales patterns and tendencies
- Manages budgets
- Allocates resources to meet revenues goals
- Monitors performance
- Ensures accurate pricing
- Guarantees effective sales planning
- Improves product quality
CRM is aimed to provide employees with the information and processes necessary to know their customers, understand and identify customer needs, and effectively build relationships between the company, its customer base and distribution partners.
CRM in retail business is by definition a system of interconnected processes aimed to collect and analyze client data in order to give your business a boost. Nowadays, it is a matter of survival for every retail business. Basic info like client’s age, marital status, place of residence, tastes, and preferences directly affects buying habits of your clients. You should research your the behaviors of your customers to meet them more than halfway. When just one click makes all the difference, it is a question of success to make everything possible in order to get your client buy what you offer. Even before digital era of e-commerce certain CRM techniques existed like providing customers with surveys and ask clients to complete grade rubrics in order to get their feedback. You probably received a few calls from TV or internet providers yourself and were asked to grade their services.
Knowing your customers is a key to success. Without it business is just a gamble with companies guessing instead of acting deliberately with certain tactics in mind. Nevertheless, that’s how business was done in the past.
The Effects of CRM in Retail Markets
A CRM system narrows targeting down and makes it more individually client-oriented.
Take, for example, a fascinating example of Target supermarkets chain in US. They once surveyed their clients and revealed that young couples who just married and had a newborn baby were the most precious market share. Based on customer habits they got to know which women were pregnant and structured their coupon programs and discount distribution accordingly. They predicted demand and provided supply to clients even before clients themselves knew what they needed. Amazing, right? However, this is a frequent practice now.
So, a successful business should be even more cunning in order to outrun their clients’ desires and also win them over, standing against competitors.
How does a CRM system work in Retail?
Client data obtained by a CRM system adopted by a company affects every little aspect of how you run your business. It influences your advertising, your sales, and even your production. It is true that CRM changes a company’s orientation on product to focus more on customers, their needs, habits, and behaviors.
CRM software gathers client data like age, marital status, place of residence, level of income, preferences, etc (this list can have no end). Using this data, it provides analytics. For example, a certain individual orders a chicken hamburger daily because he has a lunch each day between 12.00 and 14.00. It is valuable because you know when your client eats and what he eats. You use this data to send him a coupon for a chicken hamburger discount that only works from 11.00 to 15.00 (so-called happy hours). This is the most basic example. You can use it to attract a client, to improve your chicken hamburgers, to be able to serve more chicken hamburgers at these hours, etc. Now, there are solutions like that but much more complex applicable for any kind of retail business.
In order to get from raw data to adoption of a different strategy a CRM system makes analysis and looks for patterns. For example, more people ordered chicken hamburger with fries than people who ordered chicken hamburgers with ice-cream. This tendency can lead to a forced ice-cream campaign to increase its sales or to a decrease in supply of ice-cream. It is certain, though, that analytics do show what part of your retail business begs for a change.
Who Will Benefit from Gathering and Processing of Data
CRM benefits your business. But having data is just a start. The more info you have, the better. Information is power. The clearer your client portrait is, the more precise will be your targeting. It improves and optimizes the work of your sales department. You benefit, knowing what products sell better and which of them sell worse (so you can cut short its supply). You, then, increase the share of products that sell better in order to reduce losses and increase your income. Your clients also benefit because it is their needs that you consider and you meet their expectations. They get what they want. Therefore, it’s a win-win situation for both parties.
Your CRM tactics have a direct influence on your whole marketing campaign and sales strategy. Effective CRM application uses collected data to anticipate customer demands. Knowing this, you are able to provide personalized customer service to build loyal customer base.
CRM software affects pricing analysis. Your products’ price is of huge importance. However, recent statistics show that this part of marketing strategy is generally undervalued and highly neglected. Basically, you should look for 2 things: your pricing tag and your competitor’s pricing tag. However, pricing data itself is a vast source of analytics. Your customers may be dissatisfied with certain prices. Here comes your CRM software which indicates certain pricing tags that cause problems. Changing prices accordingly is a necessary adjustment which occurs constantly.
Take, for example, discounts. Everybody knows that a product or a service sold for a discounted price either doesn’t sell or gets promoted (sometimes both) Pricing data analytics allow to indicate the most correct pricing tag depending on who bought what, where, and when. Hamburgers don’t sell? Give them away 50% off.
Many people buy something ONLY because it is discounted.Your smart approach here can either save you a fortune or cost you a lion share of your income.
A lot of your clients’ data affect your pricing policy. For example, their level of income. It directly influences their ability to buy your products. You can find out just how rich (or poor) your customers are to adjust your prices and/or product line. Or, you may consider timing to adjust your pricing according to seasons or other time intervals. You can take it for a fact that sunglasses are better sold in summer than in winter. However, there are more complex patterns than that. You can give a birthday discount to your client just at the right time because you know when his birthday is thanks to your CRM software. Therefore, as everything in business, pricing and CRM are also interconnected.
Big Data Processing to Reveal Actual Shopping Trends and Personalize Ads
It is not only about your client’s info voluntarily given specifically to you. Your victory or your downfall also depends on what you can get to know about your clients from the depth of Big Data. In our day and age people leave tons of info on the web for free. And you can use it. It would be a shame if you don’t.
For example, you client’s recent post on Facebook can change the way you approach your brand and organize your marketing campaign. Take 1000 clients and their views expressed in their Facebook posts and you get a trend. To foresee a trend or get a hold of it while it lasts can mean a fortune in revenues.
The world of Big Data is endless. But, you need just the right tools in order to mine it for info you can use. This means, essentially, developing your own CRM system that can trace data vital for your purposes.
Custom CRM vs ready-made CRM software solution
Take, for example, the most popular CRM system Salesforce and its wonderful capabilities:
- Integration with other services
But, it has its cons as well:
- Problematic support
- Difficult to navigate for small businesses
Custom CRM Development Benefits
You may use already-made CRM solution. It will work but it won’t ever be perfect. This is like comparing a suit tailored specifically for you and a one-size-fits-all suit made without considering your specific needs.
Custom-built CRM system can extract viable info from the vast ocean of Big Data to present it in a coherent way and make possible to analyze and use it. Using HTML code, your CRM system collects data from your clients, for example, their name and phone number, puts them in your database to track these customers’ buying habits and client behaviors for further more complex predictions and analytics. The possibilities here are endless.
Customer tastes, preferences, and demands constantly change. You also need to change your sales approach in order to continue selling. Custom-built CRM system in pair with Big Data integration monitors these changes and keeps track of every little deviation in order to provide relevant analysis and real-time statistics. Compared over a certain period of time they indicate what needs to be changed in order to meet eternally evolving customer preferences.
Key features of a custom-built CRM system:
- Has a friendly user experience
- Can be easily upgraded
- Has only what you need and nothing else
- Optimized to the point of perfection
- Smooth implementation
- It is paid for once but lasts long
The Absence of CRM Software and its Risks
CRM as a system can never really be absent. Whatever you know about your client and how you use it fall into the category of CRM processes. However, not all companies adopt CRM software. This happens for different reasons. Many small startups don’t really need it. Older companies can’t fully grasp the point of its adoption. And others prefer to stress and press their sales-managers and market departments or hire data-analysts instead of automatizing routine tasks using CRM software. Nevertheless. general consensus shows that more and more retail companies adopt either ready-made or custom-built CRM software solutions. It occurs because companies want to avoid the following risks:
- Human factor mistakes
- Extra expenses (hiring a specialist)
- Lower brand recognition
- Lower product quality
- Customer dissatisfaction
- Failed budget plans
- Inaccurate pricing
- Ineffective customer outreach
- Inadequate workload
- Slower procession of orders
… and many others. Reaching a certain stage, every retail company should start thinking about adopting CRM software. It happens when data analysts, market department, and sales managers can no longer attend to the tasks at hand at the same time keeping high KPI. More and more business tasks become automated. Data collection and analysis are among such tasks.
But it’s not just the fact that a certain software solution can do it instead of your employees. What matters is that CRM software can do it better. It is highly unlikely for a CRM software to hurt or be useless. It generates certain benefits even for a small business with a little workload. Freeing the hands of specialists and providing you with more man-hours are among them. CRM software is able to boost your business because optimization of your work results in higher revenues.
Do I really need CRM software? Can I do without it?
It depends on many factors like the size of your retail business, your financial capabilities, number of clients, etc. However, it is more likely to be “yes” than “no”. Even if it is not crucial for you to have it now, it will become essential in future providing your business is going to grow. You can do without it. But, you won’t do good job or be in business for long without it.
So, what is better for my business: custom-built CRM or ready-made solution?
Custom-built CRM software solution is by all means a better choice. And it doesn’t really mean what retail business you own.
How much does it cost?
It depends on functionality and interface you need. The amount and complexity of features and instruments affect the overall price of a CRM software. Starting price is $10 000 and it goes up. Some huge successful companies invest hundreds of thousands in their CRM systems. Keep in mind that it is paid only once while subscribing to a ready-made CRM software like Salesforce can cost you thousands over years without exclusive ownership rights.
Do I have to keep my data analyst or no?
This is up to you. Your marketing team and sales managers can work together to work with analytics and provide relevant feedback, adjusting your strategy. Nevertheless, keep in mind that it is always up to a human being to make sense of diagrams, graphics, and statistics. Raw data is useless without meaningful analysis that draws certain conclusions.
How adoption of CRM software changes the way my sales department work?
It optimizes their work. They have more time and more tools to approach client with relevant information at hand. In broad terms, they sell better and they sell more.
How complex is CRM software integration with Big Data?
This is not an easy thing to do. However, it depends on what exactly you want. For example, getting to know you client’s Instagram account to see the amount of his followers requires a certain code to be written to deliver this information to your database. But, it can give your business a tremendous boost. For example, you may narrow your target audience to only those Instagram accounts that have more than a 1000 followers in order to get a hold of this market share.
Does mining Big Data really benefit all kinds of business?
Perhaps, not every small business should jump straight ahead into the bottomless pit of Big Data right away. But, every small business wants to be a big business, right? And it is also true that every big business was once a small business. Big Data changes the whole philosophy of CRM. You can quit asking your clients to rate your services and use info they leave online to know them better. Photos, social media posts, and geolocation tags can be used by your business. But you should know what you’re looking for before you look. Otherwise, you’ll just get lost in the ocean of Big Data.
All in all, you can’t ignore the fact that your CRM strategy decides the fate of your marketing campaign. The more info you have about your clients the better. You should also store, prioritize, and analyze client info efficiently. CRM software can enhance these tasks, boost your retail business, narrow down targeting, and optimize sales at the same time improving the overall quality of their work.
Custom CRM software is a better solution than a ready-made CRM platform because it is designed with your needs in mind. It is also evident that custom CRM software can be integrated with Big Data. It pushes your marketing capabilities to the next level enabling you to predict trends and primarily reach out to those customers that want your product. Precise targeting can lower your expenses, boost sales, bring you more loyal customers, enhance pricing, and reduce the amount of peripheral tasks. Therefore, it gives your sales managers and marketing specialists more possibilities to effectively approach clients, eliminating their routine tasks.
More and more companies adopt CRM software every day. Some use ready-made solutions like Salesforce. Others go with custom models. But you can take it as a fact that you should adopt CRM software earlier or later if you want your business to survive. CRM techniques, practices, and approaches innovate each day.
CRM software evolves to become a smart database
You may not only know your customer’s level of income or job position but his favorite color, where he goes on holidays, and how much children he has. You can do it using Big Data. Next level CRM software solutions backed by machine learning and AI will predict trends based on a variety of different info to create demand. That’s modern marketing as it is. And whoever doesn’t adapt is going to be pushed back.
CRM software seems more and more not like an option but a necessity. It is just a matter of time how long you’re going to last without it. Thus, it might be better to think strategically and adopt it beforehand. Until some point in your company’s history you save money by not adopting CRM software. But reaching that point, you start losing money because your CRM processes lag behind and beg for optimization. Ask you sales managers and marketing department regarding the whereabout of this point to know whether it is time for you to take action.