CRM

CRM in my eyes is a very wide field and its complexity very much depends on the way it is implemented. A perfect example for CRM are Customer Cards, Client Cards or whatever you want to call them. You use them everytime you buy something at the respective store and this gives them the opportunity to start collecting data about you, their customer. The value of that data then is subject to the way it is processed and merged. What I mean is, it makes little sense to know what you are buying, if they don't also know e.g. your gender, your age, your demographic situation, etc. This makes it easier to start segmenting customers and put up statistics on them. For example which age group of what gender buys the most Justin Bieber tracks (not allowed to say CDs here anymore). We all know the answer to that one. But the quality of the information that can be gathered through such systems is mindblowing. And the effect it can have on your companys sales performance is outstanding. Yes, the example with the client card is a little worn out, so let's have a look at a modern way of implementing CRM in your company. Before that, I would like to try to explain the meaning of CRM in my own words:

CRM is collecting data about consumer behavior, analysing it and using the collected data for the marketing mix. Through this you are able to increase the customer frequency, their satisfaction and make them repeat customers instead of one timers. You really try to understand your customer better and make them come back for more. As a consequence your customer loyalty will rise and opportunities for up and cross selling will appear. The whole idea is to be able to provide relevant offers and information to your customers. How relevant that information is, depends solely on how well you know your customer and therefore, how well your CRM data is collected and used.

So much for that, now i would like to have a look at a few companies and how I think they implement their CRM. It isn't rocket science to see what happens above the surface, i.e. what the customer can see. But it is a little more difficult to find out what happens under the surface, i.e. what only the company sees.

Zappos takes pride in their customers sevices and they use it as their main marketing tool. Instead of investing in paid marketing, they make sure their customers are happy and let them spread the word. Being an Online Store like Zappos makes it easier to collect data from your customers. Through simple analysis tools like Google Analytics, you already gather a great deal of information about your visitors, those are not personalized though. That means you have a set of data, but you cannot link that data to single users. The great thing about online buying is that your customers usually sign up on your page and willingly provide you with all sorts of information about them. And even better, if they are logged in while they surf on your page, you can tell exactly what they looked at, what they bought, and therefore start knowing their preferences. Simple. Amazon has been doing that since the beginning. Rather annoying sometimes in my eyes, especially if you just click on a product once, without special interest in it and then you are flooded with suggestions about this product category which is not really relevant to you. So the system does have its flaws, but hey, most times you do search for things which actually are relevant to you.

The European pendant to Zappos, Zalando is also implementing the same stragegy. And to make sure it is done properly, they outsourced the whole thing. This happens rather often, considering that CRM can become a very costly and complex tool, also depending of the size of your operation.

Times are changing and so are the rules of the game. With new players, you need new strategies. Tablets and smart phones have proven to have a mayor influence on todays CRM strategies. Because now you can not only follow your customers at home or in the office, but pretty much everywhere they go. And with a little thing called geolocation, you can even tell where they like to move around, where they shop, which bar they go to celebrate happy hour etc. and provide them with relevant offers taking their current location into consideration. Here you can see a little video about how geolocation works and what it is good for in marketing.

To wrap it up I would like to say that with the technical possibilities we have today, it has become rather easy and relatively cheap to start implementing CRM systems, but it is not so easy to use them effectively. This is probably the reason why a lot of companies outsource this. However, it is an absolute must nowadays for any company to know their customer and build up a relationship with them. No matter if that is done through large and costly software systems, or simply through minimizing the distance between you and your customer.

Cheers! P