With knowledge comes power. Understanding customer needs and building relationships are key to retaining customers and growing your business. To achieve that, you should know how to manage the customer at any point in the customer journey and throughout the customer lifecycle. We invite you to learn more about the power of a data-driven approach and personalization by reading this article.
Alternatively, if you would like to get a full overview of how to achieve a 360-degree excellent customer experience in retail, you can download our report straight away.
Here you will find:
- Value of effective customer relationship management
- Understanding the customer at every touchpoint
- The need for good data and customer insights
Value of effective customer relationship management
After a period of great change in retail and consumer habits since the pandemic, building effective customer relationships is essential. It ensures the best chance of retaining shoppers as committed customers beyond their initial purchase, especially if they were new to your brand during the pandemic.
However, it requires a complete 360-degree view of the customer. This is no longer just a nice-to-have, but in today’s retail world, it is essential. Without it your retail business will be operating blind. You will be trying to sell to customers whose wants, needs and behaviors you simply don’t know or understand. Their response may mean that either they don’t buy in the first place, or that they don’t buy from you again.
Complete 360-degree view of the customer is no longer just a nice-to-have. In today’s retail world, it is essential
Sadly, the history books are crammed with retailers who didn’t listen closely enough to customer needs or look at global technology trends. They also hadn’t built the strong customer relationships they needed to survive what business, or life may throw at them. They hadn’t achieved that level of customer loyalty to their brand. And of course, no one had predicted a pandemic, the lockdowns or the changes in customer demands and shopping habits that happened as a result. They tested even the most loyal of customer relationships.
Customers were exposed to new products and brands as their shopping habits altered, testing the loyalty of their more traditional retail relationships. Those retailers who had already learned the art of effective customer relationship management saw an easier transition, even as more of their business moved online. This meant they were better able to retain such customers, even if they had been heavily store-focussed before. Others struggled.
Understanding the customer at every touchpoint
So how can retailers overcome this challenge of building and maintaining customer relationships? The key is understanding the customer at every touchpoint.
Building knowledge of the customer must start from the very first interaction and be diligently tracked at every point on the customer journey. Retailers must know every possible touchpoint to allow them to join up the dots, this will show where and when on the customer journey their customers have interacted - regardless of channel, time or type of interaction.
And did we mention that the visibility of that customer needs to be clear to everyone in your business? This is so that employees ranging from your store colleagues to your call center team can see a single view of data. This will ensure a coherent, unified approach to dealing with customers.
The need for good data and customer insights
Fundamental to this is the ability to collect and understand customer data. It’s the backbone of decision-making and relationship building, and retailers can’t afford to skimp in this area. It requires a CRM system that allows you to centralize information, from past purchase history to shopping frequency and demographics, in one location that everyone can access. This allows you to personalize and target relevant and contextual content to your customers. It also means that a salesperson can quickly see how a customer has been interacting with your brand, either in-store or online.
But it’s about collecting more than just data. Adding AI functionality to your CRM system turns your data into insights. It allows you to better understand and predict your customer needs, and to give them a better experience as a result. It moves data from only being a collection of facts, to true customer insights that help you to do more.
It can even help you to segment your customers, identify when and why churn happens and allows you to more proactively target them. It gives you the insights into your customers that you need to drive your business forward, backed by data.
Adding AI functionality to your CRM system turns your data into insights. It allows you to better understand and predict your customer needs, and to give them a better experience as a result
We have said already in this article, that building loyalty is key. This might be with a formal loyalty scheme or by simply improving customer satisfaction using the added capabilities of AI to better personalize the experience for the customer. According to McKinsey, companies that excel at personalization generate 40% more revenue from those activities than average players.
Some retailers will build loyalty through traditional ‘points equal discount’ schemes. Other retailers are building loyalty schemes of more unique value to the customer. These are often experiential-based offers that have a greater worth than a discount because they can’t be obtained elsewhere, for example, early access to sales or other unique "money can’t buy" in-store events.
As an example, in 2020 Marks and Spencer relaunched its loyalty program ‘Sparks’, to include instant rewards such as giveaways and "thank you’s" ranging from free shopping trips to a pack of Percy Pig sweets. It promised that through the new scheme, it would know its customers better than ever and offer greater personalization than before.
Retailers need to ensure that their loyalty offers interest to their particular target customer base if they are to maintain customer attention and ultimately increase spending when building loyalty schemes. But the lack of ability to create differentiated loyalty can hold retailers back. The same McKinsey study showed that 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen.
The beauty of an efficient CRM system, especially with the addition of AI, means that loyalty is built through the relationships that are customized and nurtured, so the retailer can get maximum of its efforts and investments. Ultimately that can turn your one-time shopper into a lifetime shopper and advocate of your brand. The value of that is priceless.
