What does CRM mean in the customer experience age?
Customer relationship management (CRM) is often seen as the boring and functional relation of customer experience, but without it brands have no hope of truly understanding customers.
Marketers’ relentless focus on customer experience has pushed customer relationship management (CRM) into the background. At its most basic level, CRM is a customer database but it should be the glue that holds everything to do with the customer journey together. So before embarking on a mission to overhaul the customer experience with shiny new things like chatbots and augmented reality marketers have got to get the basics right and that means getting legacy technology like customer relationship management fit for purpose.
According to Gartner, $40bn was spent worldwide on CRM software in 2017 and it is predicted to be the fastest growing software market in 2018 at a rate of 16%.
However, CRM is perceived as a key business driver for only a third of businesses, according to figures from this year’s CRM Barometer by Wiraya, which also reveal that in the UK only 35% of companies have fully integrated CRM systems.
At Renault, CRM is “absolutely crucial” says Francois-Xavier Pierrel, corporate director of data, CRM and social. With so many channels to keep track of CRM is not only one of the car marque’s most useful tools, it also one of the “most efficient” as data can be analysed at a granular level.
“We are working with segmentation, with scoring and we are putting a lot of effort to clean all that up and ensure we move away from ‘trap and bombing’ traditional communication to something that is more one-to-one interrelationship.
“Understanding the customer journey and where people fit into the path to conversion and engagement with us is vital and that is why CRM is so important.”
Having the right communication at the right moment is what we are looking for and where CRM helps us much better than media.
Francois-Xavier Pierrel, Renault
Likewise, for Alexandra Simion, head of marketing UK at online fashion, home and lifestyle retailer BrandAlley, CRM is “at the centre of the customer experience” because it holds “literally everything you need to know about your customers, from how they got to your site, to browsing and shopping behaviour”.
Without a CRM strategy there “wouldn’t be any revenue or profit in any B2C business,” she claims. “You wouldn’t even be able to get your acquisition strategy without having the CRM to follow it through.”
The retailer, which recently acquired online homeware site Achica.com, has three million unique visitors a month and 4.5 million active members. It predominantly uses email to communicate with customers, sending around 90 million each month, which drives 80% of revenue.
READ MORE: How to use email marketing effectively
Using CRM to understand the voice of the customer
It goes without saying that positive customer experience is vital for brands to succeed, and according to the CRM Barometer 85% of UK consumers would leave a brand as a result of poor customer experience. When asked what they consider to be ‘outstanding’ customer experience, 52% of consumers say it’s handling problems quickly and with no queue. Receiving the best prices or deals for existing customers is also essential at 38%, having customer service available across different channels is important for 36%, while 22% say receiving relevant communication at the right time and via the right channel is something they look for.
Using CRM to develop customer experience and build loyalty has been a priority at Aston Villa Football Club, which last year launched its ‘Part of the Pride’ campaign. The aim is to put fans at the heart of the club and to unify everyone and everything, so the slogan is used across all marketing, forms part of the club’s charitable arm Aston Villa Foundation and its equality diversity programme All In.
Head of data and insights Matt Swindells, who believes a customer-centric, data-driven marketing strategy and contact management are the two core pillars of CRM, says the club has to be able to “understand the voice of the customer”.
Although fans have been “exceptionally loyal”, Aston Villa has “sometimes been a bit slack in taking advantage of that” so it now ensures all new marketing initiatives look to improve the match day experience fro fans across all touchpoints. “It’s a core component and we look to improve and measure that as we go,” he adds.
If we have users that have a high affinity towards certain brands or categories like homeware, we try to show that content first when they visit the site.
Alexandra Simion, BrandAlley
The club, which gets 35,000 to 45,000 fans on match days and has 4.5 million social followers, continues to develop different ways to engage with fans. It claims to be the first football club to have a season ticket that is also a prepaid contactless chip-and-pin card through which the club can track fan spending around Villa Park and at certain retailers and brands outside the grounds.
“We are collecting a huge amount of customer data at every single touchpoint, which enables us to tailor the experiences and marketing we do for each fan individually,” explains Swindells.
“Hopefully we are moving in a direction whereby we have got so much information and data about our fans, including all purchasing habits, that once we marry that up with social demographics and sentiment analysis, we have a much clearer picture of our fan base than we ever had before.”
Building loyalty through CRM
Achieving standout and customer loyalty can be challenging. According to the DMA’s Customer Engagement 2017 report, 72% of consumers want loyalty offers to relate more closely to what they like, but 46% find it difficult to know which brands to trust and 44% don’t know which marketing messages to believe. Brands that communicate “genuine values” and “deliver on function” will build stronger connections with consumers, the report finds.
Pierrel says Renault is using CRM to understand where people fit into the funnel and how to engage them across various touchpoints.
“We become even better at purposing conversational tools, such as instant messaging, and making sure we move from mass communications to one-to-one communication,” he says.
The difficulty for the car industry is, however, is “the volatility of customers”. Previous generations bought cars as a status symbol and kept them for longer, but with so many financial options open to consumers today, it has become much easier to change cars every few years, which gives people more flexibility to move from one brand to another.
Consequently, it’s essential to be “extremely precise” when talking about the brand while making sure it sends the right message to the right person at the right moment with the right frequency.
“This is how we try to build loyalty,” he says. “For example, if a customer receives a message that they have driven their Renault for 21,000km and their tyres might need changing, we can offer a specific discount if they come to the dealer store. We make sure we take care of the relationship but also everything that goes around. Having the right communication at the right moment is what we are looking for and where CRM helps us much better than media.”
AI and machine learning’s role in CRM
With an ever-increasing number of players, Simion at BrandAlley doesn’t necessarily believe there is loyalty in ecommerce, which makes it harder to retain customers.
In order to get customers to return, the brand is using Emarsys’s artificial intelligence-enabled platform with its data to offer more relevant communications by predicting the category the customer will shop next.
“We try to offer content in whatever is more relevant for an individual. Then in terms of the site we apply the same method. For example, if we have users that have a high affinity towards certain brands or categories like homeware, we try to show that content first when they visit the site.”
Using AI with CRM data has led to a 26% increase in revenue and 27% increase in email clicks. Simion describes it is a “fantastic revenue increase” but more importantly the brand gets engagement from emails being opened and people coming to the site and “that is what builds loyalty”. “The customer always comes back if they feel there’s something in it for them,” she adds.
READ MORE: Ben Davis – Don’t talk nonsense about customer experience, just get CRM right
At Renault, machine learning is at a “natural first stage”. The brand is working with SocialBakers to get a fresh perspective from social activity. Pierrel says the brand has been able to identify influencers who are not the “super guys but the smaller guys with a very loyal community where we can promote one aspect of a car or experience”.
He adds: “Machine learning is helping us because finding this kind of information would take a zillion years, scrolling everything we have on our Facebook pages, Twitter and Instagram. Now we have instant access…it helps us in finding insights in the way we are going to promote and communicate around a car.”
Measuring the success of CRM
Selling cars is the obvious measure of success for Renault, but Pierrel describes CRM as a “natural helper” when it comes to controlling churn rate and making sure existing customers buy their new car from Renault again. It is also enabling “measurement of everything – what you deliver, conversion, attribution, contributions. We want to be sure we can measure everything we do all together. So we are mixing media, CRM, DMP, online tracking and offline tracking to make sure we understand the customer journey,” he says.
“A Google study found there were 900 touchpoints over three months from discovery to purchase and we need to understand the value of each touchpoint and where we should put our money and efforts based on our knowledge of our customers and prospects.”
But for a global brand like Renault it gets trickier to find the right channel and have the right tone of voice across different markets which have different structures and products. “There’s a lot of complexity and this is where CRM becomes much more complex than before,” he explains.
Swindells at Aston Villa reveals the club has embarked on a priority project this year around understanding the metrics that deliver success, not just commercially, but “right the way through the club, whether that’s true sentiment tracking, understanding where we are against a budget or digital marketing metrics, latest CPA or campaign”. The club is building a new self-service portal that will deliver real-time insights and allow it to measure success.
He says brands can feel as if they are drowning given the sheer quantity of data they collect, so they need to ensure at the outset there’s a clear strategic focus on the areas that are most efficient and profitable. “Everyone is aware and understands the power of data in their role and it is part of their everyday lives,” he says.
GDPR has been a big challenge for businesses over the past year, and will continue to be as brands look to get their customer data in order, but ultimately, Swindells believes it should be seen as a positive move, especially for marketers as it allows them to be much more targeted. It will be “quality rather than quantity and that can only be a good thing,” he concludes.