What Are the Benefits of a CRM in Retail?
The benefits to having a customer relationship management system for a retailer are many. For businesses today, ensuring a positive customer experience is an extremely important aspect of differentiating themselves from competitors.
Decision makers are now recognizing that customer experience is as important as price and quality in terms of making a sale and staying ahead of the competition.
39% of company CEOs say a good customer experience is the most effective way of establishing an advantage over competitors.
2020 has exacerbated economic circumstances for many consumers, and—in a continuing trend over the last few years—are being more careful in whom they buy from.
Winning over these customers is key to any customer service strategy, and CRMs can help. Let’s take a look at the top benefits of a CRM in retail.
Trust in Businesses is Waning
Customers are pickier than ever when it comes to the businesses they buy from.
81% of consumers say that they need to be able to trust the brand they are buying from.
More and more, customers are placing bigger demands on businesses in terms of their services, relationships, and even their positions on issues like sustainability.
What does this mean for businesses? First it means that they have to assess whether they’re doing what they can to ensure they have the trust of customers.
It also means a big opportunity. In a time when a positive relationship between brand and customer is a key competitive differentiator, savvy organizations will be implementing technologies and strategies that exploit this need and give themselves a boost over those who are lagging behind.
Customer centricity makes a big difference between successful and less successful businesses, with customer-centric companies 60% more profitable than their counterparts.
Necessity of Personalization
A good customer experience is dependent on the service they’re provided, and today the key differentiator between a positive and a negative (aside from the obvious; not receiving an expected service or product, etc.) experience is very often the degree to which it is personalized.
80% of consumers are more likely to make a purchase from a brand that provides personalized experiences, and 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them.
Much of this desire is being driven by younger generations, particularly cohorts of Gen X and Millennials, who make up the two largest generations in the current US workforce by a significant margin.
When you consider the approach that the biggest brands in the country take, be it Netflix, Spotify, or Amazon, personalization is at the heart of their customer experience strategy because of the opportunities to retain their custom by providing an experience that is uniquely tailored to them.
This has in turn led to higher expectations when it comes to the kinds of businesses that people want to deal with today, and in the majority of cases these expectations are best met through personalization.
In order to personalize, companies must leverage the data they have accrued from customers and use that to inform their business’ messaging towards customers, including whom to target for a particular campaign.
Responding to complaints and queries effectively marks out a leading customer-centric brand from a laggard.
It might seem simple enough, but the fact of the matter is that one poor customer experience can have serious ramifications for a retailer.
Customers tell an average of nine people about a positive experience with a brand, but they will tell nearly double that number (16) about a negative experience.
In other words, if customer is dealt with poorly, the implications are larger than one who’s been dealt with well—in short; negative word-of-mouth travels fast.
Using a CRM means everything is centralized, so an email will never go missing or unnoticed and customer queries can be addressed according to their priority.
Related Post: 20 Customer Experience Stats SMBs Must Know
The best thing about a CRM in retail is that it acts as a centralized repository for all your customers and allows you to put their information to good use.
For example, it offers you the opportunity to segment your audience according to the information you have. This means you can far more effectively target customers and prospects by having a better understanding of what different audiences are demanding.
The benefit to retailers is the ability to run marketing campaigns back on the needs of your contact base—whether it’s for a specific product or prospects who are at a certain point in the funnel.
This makes conversions a whole lot easier for retailers, while at the same time improving customer experience by giving you the opportunity to establish relationships with contacts based on data—in other words; you’ll no longer have customers unsubscribing from your email list because they’re being bombarded by emails that don’t pertain to them.
A survey from Mailchimp found that segmented campaigns had open rates 14% higher than non-segmented campaigns. They also saw a 101% increase in clicks over non-segmented campaigns, while also noting lower bounce rates, unsubscribes, and incidences of spam reporting.
In times of economic downturn, businesses turn to their existing customer base, and 2020 has been no different.
65% of a company’s business comes from previous customers.
Retaining customers is crucial, and one of the benefits of a CRM in retail is that they allow you to do just that.
Using a CRM will give you the chance to plot out your customers’ buyer’s journey and how they are responding in the post-purchase phase.
Repeat customers provide you with valuable information as regards their interests, meaning you can target them with tailor-made campaigns that offer a more personalized experience.
A personalized experience means a happier customer, and a happy customer means a retained customer.
A 5% boost in customer retention increases profits with 25% to 95%.
Using a CRM to its capabilities by nurturing your customers will go a long way to retaining them in the future.
We noted before that a CRM helps businesses address customer queries efficiently and improve customer service by not letting queries and complaints slip through the cracks.
A CRM is also a boon to communication, both external and internal.
Externally; because you can utilize a wide array of communication channels to engage with customers, like:
- Automated Emails
- Online/live chats
- Social media
- Text messaging
These channels are distinct, and CRMs come with a variety of ready-made templates for these channels in order to get in touch through different means, whether it’s an information newsletter or an automated text message acknowledging a receipt.
The Customer Service Benchmark Report found that 90% of companies do not use autoresponders to acknowledge they have received a customer service email.
For the purposes of internal communication, CRMs are designed to unify information through a central database, meaning staff don’t have to create ad-hoc methods for processes—everything they need in order to communicate and share information regarding tickets, orders, campaigns, and everything in between is right there in the CRM.
Managing inventory and having complete visibility into every stage of order fulfillment is a key benefit of a CRM in retail.
It’s not uncommon for retailers to have two distinct systems for their customer relationship management and their inventory management—having both in one allows for a better customer experience.
Knowing where your inventory is crucial, and if, for example, a customer calls to ask where their product is, a business ideally wants to be able to instantly check in the CRM to provide the information.
Combining these two systems is a good example of how retailers can streamline their technology to provide their customers a better level of service.
It also means that data entry tasks from two different systems are alleviated from employees, and in turn a reduction in data errors—an integrated CRM system can automatically update, in some cases bypassing the need for data entry for inventory altogether.
The benefits of a CRM in retail are varied and significant.
Positive customer experiences have long been a crucial factor in the success of SMBs, and now more than ever businesses have to deliver.
Streamlining customer service and utilizing data through a CRM provides the best opportunity to retain and gain customers, and savvy organizations will recognize that those who are leaders in customer service are more frequently finding success.
As customer attitudes continue to change and expectations climb, it will be incumbent on decision makers to ensure that they have the right technologies in place so that they can effectively offer a great customer experience.
At Impact Networking, we’ve been working with SMBs for over 20 years to help them implement new technology to better serve their customers. Using a CRM in retail helps businesses get a better understanding of their customers and provides actionable data in real-time. For more information, visit our Enterprise Resource Planning page and discover what a unified business management system can do for you.