Customer Centricity Top Priority: Expect Rise in CRM Spending

By Allan Pulga

In order to find out more about their customers, today’s retailers are willing to spend more money.

According to a recent study, an increasing number of retailers are using customer data to improve marketing programs and merchandise offerings – demonstrating retailers’ reliance on integrated Customer Relationship Management (CRM) solutions. Ogden Associates retail consulting firm, commissioned by the National Retail Federation (NRF), found that 65 per cent of retailers surveyed plan to boost their expenditures for CRM technology this year.

The study, conducted in December 2005, surveyed over 200 retailers from a variety of industry segments, including many of the largest U.S. retail companies.

Interest in improving the customer experience was nearly unanimous (98 per cent), as well as the desire to increase customer satisfaction (97 per cent). And retailers expressed a dependence CRM technology to find out ‘how to cater to customers’ and achieve these goals.

“Retailers have been gathering consumer trend data for years,” says Ogden President Janet Murphy. “Understanding the value of CRM technology will help retailers use this information to personalize the relationships with their customers.”

Retailers have become better at seeking and responding to customer feedback, particularly information relating to customer lifestyles and demographics. Over 35 per cent of retailers obtain direct customer feedback on a daily basis – a considerable increase from 2004, when 10 per cent of retailers obtained weekly customer feedback.

Retailers are also better at using information strategically, with 67 per cent of respondents linking customer information to ‘merchandise planning’ – a big jump from 42 per cent in 2004. The majority of retailers linked customer information to other activities too, such as: developing market strategies (92 per cent), advertising budgets (69 per cent), catalogue targeting (67 per cent), promotions (83 per cent), and naturally, customer service (78 per cent).

“In this business, pleasing the customer means everything,” says Mike Gatti, executive vice-president of RAMA (Retail Advertising and Marketing Association).

“Retailers clearly recognize the significance of developing relationships, evaluating customer feedback, and ultimately improving the overall retail experience for the consumer and boosting their own sales.”

CRM Basics for Retailers: Learning More about Customers, Faster 

• Get executives on board. Executive leadership is KEY in implementing a sustainable CRM initiative.  
• Implement the right technology. The solution you select should: NOT be a stand-alone customer database, be a real-time solution, have a central database and have an intuitive interface to capture ALL customer information. 
• Compile and upload an accurate database of current customers. To have a successful CRM strategy in place decisions must be made based on reliable data.
• Log all activities: phone calls, in-store activities, complaints, privacy requests, etc.
• Use the data you collect for superior, personalized customer service and cost-effective, targeted marketing.