Competing in the New CRM Arena
Eight database marketing challenges retailers must tackle
By David Ehrenthal
Today, an increasing share of retail senior executives recognize that CRM marketing investments need to be made in areas that directly impact customer revenue, profitability and satisfaction, and in ways that reinforce the company's competitive positioning. Moreover, most of these senior executives have discovered that the challenge of CRM is less about software and technology, and more about the skills of their people, customer intelligence gleaned from multiple data sources, and the ability to disseminate this customer intelligence to drive interactions with customers at all touchpoints.
Forrester Research, in Cambridge, Mass., has identified the principal challenge facing companies pursuing CRM initiatives to be the sourcing of marketing, analytic and technical skills. In fact, based on a survey of companies, 45 percent of marketing executives identified a "lack of skilled staff and/or available talent" as the major pain point in their marketing organization. Moreover, 98 percent of marketers rate customer analysis and analytics as the most important database element in producing successful results.
To reinforce their competitive advantage through CRM, retail marketing executives face some key CRM marketing challenges. They have a much better chance of realizing the fruits of CRM by following this eight-point framework:
5. Multiple channels;
6. Marketing investment prioritization;
7. Segment branding; and
8. Tools selection.
#1—Data: The Answer Lies Here
To succeed at CRM, retailers must have a central repository of continuously updated customer data. This central operating data warehouse typically will include raw transactional data, self-reported survey data, third-party data, and data transformed to inform marketers and integrate into analytic applications.
Capturing transactional data and matching each transaction to an individual customer can be a challenge unless the vast majority of transactions are made with a loyalty card. Without a loyalty card, companies will need to establish a policy to collect customer information at the point of sale. This information could be a telephone number, name and address, or simply a ZIP code, depending on the application of the data. To optimize data capture rates, marketing should monitor rates at the store and cashier level, and report compliance to the operations group.