June 20, 2018

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Tags: CMO, CRM, Marketing Technology

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Categories: Marketing Technology

Six Steps to Successful Sourcing of CRM Software

Six Steps to Successful Sourcing of CRM Software

According to Gartner, spending on software as a service will reach approximately $42 billion in 2019, 75% of which will be spent on customer relationship management (CRM) software.

The key drivers behind this phenomenal investment are digital transformation (DX) projects necessitated by the swiftly changing retail environment. When you consider that:

  • UK YoY retail footfall fell by2% (British Retail Consortium)
  • 20% of retail sales now take place online (Deloitte)
  • By 2020, 40% of e-commerce will be enabled or influenced by a consumer’s social network (IDC)

Investment in digital transformation and CRM is something that all retailers should be considering if they haven’t already started.

 

Why CRM?

You probably already have a team segmenting your customer database, regularly send email (With some automation thrown in) and maybe use some personalisation. The numbers stack up well enough, so why distract from your day job and think about another layer of marketing technology? Aren’t you already doing ‘Customer Relationship Management’?

Unfortunately, not all database marketing provides a great customer experience. If we think about the insights that contribute to lasting relationships in the physical world – knowing a friend loves candles but never woody scents, your partner loves the latest fashions but usually in blue, that mate with the newest, shiniest piece of tech, always before everyone else – it’s detail and context that make a relationship, and also builds long term customer loyalty.

Then think about the times you’ve received an email with recommended products ‘just for you’, only to find the item that took your eye isn’t available in your size or preferred style? Repeat that experience a couple of times and the outcome isn’t just a drop off in engagement, it has a lasting impact; according to the CRM Barometer Report 2018, 85% of customers would leave a brand based on poor experience.

Email continues to be a channel of choice for marketers for good reason – it enables cost effective communication at scale, coupled with the ability to target specific customer groups and optimise promotions.  However, email engagement doesn’t tell you which customers went into a store, called customer services, shared an item on social media or didn’t take up an offer because it wasn’t in sync with their shopper habits.

Additionally, email and it’s DM counterpart catalogues are very much one way, offer led, promotional channels. Whilst 60% of respondents to the DMA Customer Loyalty Report 2018 said that financial incentives continue to drive their brand loyalty, the other 40% were driven by factors including customer service, brand values and social engagement.

In order to engage with that other 40%, a centralised view of the customer is critical, supporting effective customer service, providing insight into shopper habits and enabling communication via channels other than email.

 

The Foundations Are Already Built

Fortunately, direct marketers are well positioned to benefit from digital transformation and CRM adoption. As Luke Kingsnorth, CEO, Charles Tyrwhitt comments “Our foundations in Direct Mail give us an advantage, we have always taken great care of customer data and valued it highly. However, moving to a more digitally focused CRM strategy enables us to be more responsive. It also reduces wastage and means we can speak to our customers in the channels where they want to engage.”

Not only are direct marketers well positioned but most, if not all, will also have completed a key prerequisite – clean customer data. The investment required for good quality data; auditing, mapping flows, deduping and removing inaccurate and old data – will have been done in preparation for GDPR. So it’s just a case of buying in some marketing technology right?

Wrong. Before you reach for the latest Gartner Magic Quadrant report and haul in those visionary CRM vendors for a demo, it’s worth acknowledging that even with the best resources CRM projects often fail.  A 2017 report in CIO magazine estimated that as many as 30% of CRM projects failed to deliver on expectations and for those companies that do successfully complete an implementation, less than 40% of them have an adoption rate over 90% (CSO Insights)

So, what are the steps you should take to ensure success?

The Six Steps

  1. Revisit your strategy
    Review your business objectives and think about how optimising the customer experience might enable you to deliver on them; even if yours is a ‘stack ‘em high and sell ‘em cheap’ approach.
  2. Know your limits
    Take an objective look at your readiness for CRM adoption and be realistic about what you can achieve – our free assessment is available here: http://wr.digital/crmfitness
  3. Understand the market
    Review the market from top to bottom – from service apps to organisational wide platforms. Don’t be fooled into believing revolution rather than evolution is necessary, incremental changes can deliver significant results and may be a better fit for your organisation.
  4. Innovate & Market Test
    Encourage and reward innovative thinking centred on solving customer challenges, organise into short, medium and long-term goals. Put it out to the market as a ‘Request For Information’ (RFI).
  5. Build a Business Case
    Once you have your requirements and a view on how those needs might be met – by a single or multiple vendor and what’s involved in implementation – you can build a robust business case to put to your board.
  6. Avoid the Smoke & Mirrors
    With signed off investment and a clear way forward it’s time to engage with potential suppliers. Based on your requirements, outline 3 high value use cases, when you pick a vendor that has shown they deliver, make sure delivery on those cases is written in to the contract.

In future articles we will take a deeper dive on the steps outlined above and in our next one we’ll look closer at the CRM software market; from advanced email services to AI based marketing automation, Customer Data Platforms to instore client telling apps.

 

By Jane Dixon, MD, WRD Ltd