Customer relationship management (CRM) is gaining momentum
Brands are taking full advantage of CRM as a central hub of knowledge, using it to analyse behaviour and get that all important feedback. Nicola Smith reports.
To a few marketers, ‘customer relationship management’ (CRM) probably means little more than ‘direct marketing’. For some, CRM remains separated from other marketing disciplines, often used just to trigger direct mail and email. But that state of affairs is becoming rarer and CRM is gaining momentum as the central hub for everything a brand knows about its customers.
Research by Gartner published this month shows that the global CRM software market grew by 14 per cent in 2013, an increase mainly driven by greater investment in digital marketing and customer experience initiatives. CRM has moved beyond direct response and reaches into all areas of a business.
British Airways head of brand marketing Abigail Comber says: “Technology and the use of data have meant that CRM as a function has matured, so that it is no longer just the preserve of the CRM team; it has become a fundamental way of doing business for companies that want to get close to their customers. It has the power to shape the entire customer experience.”
Such is the importance of CRM to BA that its agency, Bartle Bogle Hegarty, is launching a dedicated CRM division, prompted by winning the brand’s customer engagement business.
BA constantly reviews its approach to working with agencies as its business needs change. Its new model is designed to help drive a “channel-neutral approach” to its marketing activity, says Comber. “The focus is on developing great brand content, not predetermining which channel or agency should lead.”
The need to take a more holistic view of customer behaviour, regardless of which channel customers use to engage with a brand, is a pressing issue, and it seems that at least part of the answer to achieving consistency lies in the integration of customer experience with CRM.
Late last year, John Lewis launched its CRM-based ‘my John Lewis’ programme, with the aim of creating a seamless customer experience across online and offline channels and gaining a deeper understanding of customers’ preferences. Head of customer marketing Chris Bates explains that in exchange for customers sharing who they are, what they buy and what they might like to buy, the retailer provides a more personalised service in the form of relevant, curated content and access to exclusive events and rewards.
“It is an omnichannel programme, which means that the content covers everything from personalised emails, containing products and services we believe will inspire our customers based on what we know about them, to exclusive and experiential events such as the recent 150th anniversary exhibition and roof garden at our Oxford Street store, and vouchers to reward and enhance the in-store shopping experience.”
Bates says John Lewis is “significantly ahead of forecast” in terms of customer registrations for the initiative, as well as exceeding its target for incremental sales and visits to stores driven by membership of my John Lewis.
Moneysupermarket.com is also embracing CRM to span the touch points of its relationship with customers. General manager of marketing operations Steve Sweeney says the brand has made a “significant change” to its CRM strategy, working with an agency rather than handling it internally.
“Proximity London will provide a horizontal function unlike the traditional agency model – it will become the solution to joining the dots between our different business units and agencies,” says Sweeney. Proximity will be the voice of the customer and work across the silos in the business and agencies. “This is critical for a customer-centric business,” he adds.
One of the advances Sweeney anticipates integrating into the company’s CRM relates to behavioural economics. “We are applying a more psychological approach to how each communication is delivered in terms of copy and layout; but also digging deeper into the overall life goals of our customers.”
It means that, rather than looking at its customers as targets for its campaigns, the company will use data to identify what campaigns it should be developing for individual customers. “More importantly, and this is key to our new approach, we are identifying their deeper implicit motivations, for example independence or security. These are much more powerful drivers of behaviour and open up new possibilities for our communications.”
The key driver is the age-old desire to find out exactly what makes each customer tick – and to apply this knowledge. While John Lewis is aiming to get a deeper understanding of customer preferences through my John Lewis, Moneysupermarket is aiming to take this one step further and understand what its customers want before they know themselves.
Anticipating the point when a customer is about to leave is another priority for many brands, particularly in the digital age when competitors are only a click away. Research by TNS found that one of the top three reasons for customer churn is poor customer service. The report also points out that companies that are renowned for good customer service, such as Amazon and Hilton, use CRM technology to connect the customer’s experience with staff at all levels of seniority as part of the company culture.
This enables businesses to follow up on problems before they threaten the relationship with the customer. Linking transactional information, such as number of complaints or dropped calls, with real-time customer feedback and social media listening enables them to address customers at risk and to build the relationship with those who advocate their brands.
Online retailer Brand Alley is using CRM technology to review its customers’ journeys through the sites. “There are points when people waiver and stop their journey with us,” says PR and marketing director Melissa Littler. “We want an ongoing conversation, so we will implement different calls to action at each of these ‘pain points’ to provide further inspiration and keep them browsing.”
The retailer’s investment in CRM also enables it to segment customers to create optimal user journeys on the site. “Every unique visit costs money and we want to ensure our cost per visit, cost per member and cost per customer are as effective as possible,” she says. “We can assess browsing and buying behaviours against time and frequency of purchase, know when to incentivise and when to leave well alone.”
Debenhams is also looking at retention, using an adaptive behavioural analytics platform to gain insights into customers in real time and at an individual level. “We want to find the point at which customers churn, and create engaging campaigns based on this data to keep our high spenders,” says head of advertising and loyalty Jane Exon.
Added to this is segmentation of Debenhams’ communications to customers. “The end goal is to provide them with a more bespoke, multichannel retail experience,” says Exon.
Debenhams is not alone in focusing on the provision of a more personalised customer experience. John Lewis has plans to introduce personalised services within Johnlewis.com, and BA is already seeing the results of a similar approach. “We have seen higher conversion rates from emails where the content is tailored to the individual at a one-to-one level,” says Comber. “The priority now is to deliver that personalised experience across more of our direct campaigns and to test and learn in more channels.”
BA has also implemented personalisation offline through its ‘personal recognition’ programme, which is incorporated into an iPad app for its crew and ground staff. Comber claims this has seen “great results”, despite provoking a flurry of adverse media attention over the privacy implications when details of the programme, called Know Me, were revealed at the Marketing Week Live exhibition in 2012. The programme links a passenger’s flying history and habits with public information, such as Google Images.
Staff receive messages with information about specific customers, for example they may be told that an Executive Club member is flying in business class for the first time, enabling the crew member to welcome that customer and explain the benefits. The programme also enables the crew to thank regular travellers who may have experienced issues on previous flights, such as delays.
“Those customers who have received personalised messages from colleagues are more likely to recommend BA to others,” says Comber. BA also arms its call centre staff with company information such as offers that customers have previously viewed, enabling them to have more relevant conversations that deliver higher conversion rates.
There are numerous ways to measure the success of a CRM strategy, but it is clear that these indicators are no longer siloed figures relating to direct response activity. Instead, they are goals that are embedded company- wide, from reducing calls to the call centre to optimising profit. As Brand Alley’s Littler says: “You want to see your investment pay back and more. Ideally, if you get it right, you want revenue to go up through a customer’s lifecycle. It’s a major factor and true sign of growth, it’s just not always that easy.”
For BA’s Comber, CRM is about delivering on two key goals, regardless of channel: “Customers want consistent experiences from brands but they also want those experiences to be personalised. The brands that get the balance right between consistency and personalisation are the ones that will have an advantage over their competitors.”
Viewpoint: Matthew Turner
Vice-president of marketing, VoucherCodes.co.uk
At VoucherCodes.co.uk, we believe that strong relationships with both merchants and consumers set us apart. That said, we are now approaching customer relationship management in a far more strategic way that will deliver more value to all of our customers.
Our first step has been to learn as much about our customers as possible. On the consumer side, over the past six months we have run qualitative and quantitative research, site and mobile user experience testing, and implemented surveys across many of our key consumer touch points. We have plenty of work to do but we now have an actionable consumer segmentation and far richer insights into our own performance, as well as clarity around what really matters to consumers.
As a result, we have configured our marketing and product roadmaps to focus on areas that will deliver greatest value to them. Most of our upcoming enhancements gravitate around three themes: mobile, personalisation, and custom audience targeting. In mobile, we will be delivering far more enriching experiences, including improvements to our mobile app through expanded, tailored offers and location-based capabilities enabling push notifications.
Across the website, app, and email programme we will be developing a host of enhancements that will serve more relevant, personalised content, whenever consumers want it. We are also building custom audience products that will allow our merchant partners to engage with valuable segments of their customer base and prospect audience.
There is more to come, including RFM segmentation, which divides consumers according to the recency, frequency and monetary value of their visits; further focus on customer lifetime value, retention, and engagement; and the development of a long-term membership and loyalty scheme.
Case study: Coeliac UK
Coeliac UK works on behalf of people with coeliac disease – a lifelong autoimmunedisease caused by an intolerance to gluten. In October 2013, the charity invested £250,000 in overhauling its ICT infrastructure, a move underpinned by a new customer management relationship (CRM) solution tightly integrated with its website.
Head of ICT Brendan Harris explains: “Knowing and understanding the profile of our 65,000 members is really important to ensure we can continue to evolve the information, products and services they require.”
The charity has a database of 10,000 gluten-free products, and also manages a venue guide for recommended eating establishments. In addition, the CRM system has to support the commercial operations of The Coeliac UK Trading Company, which includes advertising, sponsorship and merchandise.
Working with CRM software Workbooks, Coeliac UK has combined CRM and membership management into a single system, enabling members to sign up and pay online, purchase merchandise, submit recipes and access details of gluten-free foods.
The system has enabled the charity to introduce six different types of membership and provide a website experience for each of them, as well as being personalised to allow each member to organise and save links to recipes, products and venues.
“In addition, we are sending specific information and metrics about what the person does on the website into Workbooks so that we can get smarter about the differences between the demographics of our membership,” says Harris.
For example, the charity is tracking how many times a document has been downloaded, which sections of the website the member visited and whether members are linking the website to social networks. This information is recorded on a member-by-member basis in real time.
“The intention behind the data gathering is first and foremost to enable the charity to undertake better segmentation and analysisof its membership and to understand its members’ and/or volunteers’ wants and needs in more detail,” says Harris. “From this we will be able to tailor the outbound communications to suit differing personal preferences, enabling us to move away from single approaches and into mass communication.”
It is hoped that this more personalised approach will increase volunteer numbers, membership and donations.
Within six months, 25,000 of the charity’s 65,000 members have activated the new online service, and Harris believes that the insight being gleaned about member behaviour will inform Coeliac UK’s future strategy and business operations.