Since our inception ins 2015, our Innovations have always been driven by suggestions from both Retailers and Manufacturers.We have been developing almost all suggestions so far, and they have proved very valuable for the all parties.Looking a few years back, all these innovations have focused on 3 main points:
• Increase efficiencies
• Accelerate Digital Collaboration and decision making
• Improve understanding of ShoppersFor 2021, we are calling on you again:
what innovations would like to see: Merchandising, Shoppers Analytics, Range & Promotion Planning…thank you to let us know!
After a period with extremely high volumes, several activities will be in the “Pause” mode. How difficult this period might be, the preparation of the post pandemic era might be the opportunity to sharpen some fundamentals, shift Teams’ mindset from survival to revival…and get ready to capture new market shares when the rebound will start.
We are thrilled to announce that HPT Ariane has taken a minority share in Hypertrade consulting.
Both companies have been collaborating since 2015 and this strategic move will enable Retail Customers – Retailers and their Suppliers – to have access to all in 1 solutions for Retail Data Value Creation. Hypertrade Consulting has always been building on its retail expertise and HPT Ariane brings in a wealth of Retail Tech and Big Data expertise. With Customers in Myanmar, Philippines and Malaysia, both companies are now expanding their markets to Middle-East, Africa and Europe
Change is hard for everyone, especially when circumstances increase its level of urgency. Digitalization used to be a nice to have and was already a topic discussed during Boards. Today it has become an imperative. The current pandemic we are all experiencing is only accelerating the urgency for move forward and step into the array of Digital Transformation.
The harsh ultimatum is to make it happen now or face the risk of losing touch with today’s marketplace, its Customers and the competition.
Digitization has 2 main objectives: make the business ready for a more digital world and, maybe the most important one, optimize the existing business.
Large Retail companies are hiring international consulting firms to help them in the transition because they can. But what about the other companies? How should CEOs approach this Digital Transformation Journey? For more information
Defining Digitalization
The Merriam-Webster dictionary tells us that “Digitalization is the process of converting something (information mostly) to digital form”. For the retailer, there are 3 things it can digitalize: Its Data, Its Products Offer and its Communication.
The Digital Journey will not only concern the conversion of information into data, but also the use of technologies to process these data to evolve the business model and drive its performances.
In other words, optimize what already exists.A practical approach to this essential journey requires first to look at what it is, and what it is not.
Myth
Digitalization is Complex
If one tries to reach perfection from the beginning, yes, it is complex, expensive and with little chances of success. But in practice, because retailers are already using certain level of technology (at least for their ERP and POS), they have already established the fundamentals of digitalization: they capture data.
There are a lot of solutions out there that can help retailers on the Road Map and Tech side.
If there is one complexity, it is a management one. And it requires a real Leap of Faith.
Myth
Digitalization Mostly Supports Online Commerce
Not really. In countries like Malaysia, The Philippines, Myanmar or even Thailand, Online Grocery Shopping remains small and very costly. Though it is true that E-commerce requires data and the technology and skills to use them, the main objective of Digitalization is to improve how the organization is working. It is necessary because the amount of data to process now is much bigger than in the past, and decisions are more complex.
Digitalization means we can do much more, much faster, with the same Team. Not only on E-Commerce. On all Sales Channels and all Business Units.
Myth
Technology Will Be a Challenge For The Teams
A Good technology is a technology that is accessible by all, easy to understand and interact with. A well design solution will embed the work of employees and make it easier, and faster. Technology is not a challenge. Selling to Teams the idea to work differently is. While the work objectives will remain the same, decision-making processes will change. A progressive and planned approach is required, not so much because of Technology but to give time to Teams to embrace and support the project. The Digitalization Journey is before all a Team’s Adventure.
Truth
Leap of Faith
There is indeed one leap of Faith required for a successful, economical and effective digitalization approach: retailers must agree to have their data put to the Cloud. This will enable them to access amazing cloud-based tools, from Merchandising to CRM to Data Collaboration, at a very low cost, thus avoiding heavy investments.
If the decision is simple from a technical perspective (it is nowadays quite easy to regularly upload selected data on the Cloud), it often corresponds to a major paradigm shift for many Business Owners. The perceived risk of having Trade Secrets on the web is scary. But the risk is only perceived, and even 100% security can not be guaranteed, it is almost a given. Even though the data might not have been utilized that well in the past, CEOs understand their value. Shifting to the Cloud can sometimes be perceived as a risk of disclosure, even a loss of control sometimes. Unless the CEO and the Board are willing to invest literally millions in Hardware and hard-to-find and harder-to-keep Talents, the Cloud is the best available option.
Truth
Digitalization Journey is Essentially a Human Adventure
Steve Jobs had this famous quote: “It’s not a faith in technology, it’s a faith in people”. There is one thing even the best Consultants or Service Providers or Colleagues – actually no one – can do for the CEO: Lead.
And everybody knows how difficult that is. From enabling Teams to visualize the benefits the Journey will give them to reducing their fears and turning their resistance to change into a dynamic source of support…This is THE challenge of transforming the organisation. Before even thinking about Technology and Data, successful Digital Transformation Journeys have been approached like Change Management Programs. Technology will support people, not replace them. Intense Planning and Brainstorming sessions ahead!
Truth
Benefits Are Real And Immediate
For Teams More purpose: thanks to immediate access to the results of the decision they took for their categories and how their customers reacted, Teams gain in motivation and ownership.
For Management Better focus: Faster access to Dashboards that deliver in an instant what took weeks to deliver means priorities are quickly identified and measured. For Customers Improved experience: supported with Data, Teams understand Customers Better, take faster decisions and can allocate more time to execution. Choice, promotions, pricing and availability are improved.
Truth
Strong And Reliable Partnerships Are Needed
In addition to the CEO’s Leadership and Vision, the other ingredients required for a successful digital transformation is Talents and Experience in the industry, the trade craft and technology.
The first thought many Business Owners might have is to have these talents in-house so not only the solutions are 100% tailor made, but the Talents can help the company improve further. Such an approach is even more understandable when the business has been built from scratch, when all the challenges in the past years have been successfully addressed internally. Still, a thorough costs-benefits analysis might help:
What type of Talents am I ready to retain vs. Talents for hire?
How fast can we keep up vs. How fast can a provider innovate?
How much do we already know vs. How much can we learn?
Where do we want the dependency to play in our advantage?
You did a Campaign focusing on a specific objective: it was maybe to invite shoppers whonever or seldom buy a specific type of products, or you wanted to grow overall basket, oryou wanted to invite profile customers try a new concept.Whatever the level of success – hopefully high – one of the great ways to maximize thecampaigns outcome is to leverage, after the campaign, is to understand the differentperspectives of success measurements.
2. Campaign Result : Choose your perspective
Each campaign performances can be measured from different perspectives.
CRM teams might consider selecting several analyses angles based on the Campaigns objectives
3. Sales & Margin & Overall Impact
This is the easiest analyses to get in Ulys Customer Intelligence SaaS Software. All what is need is to access the Campaign Analytics function in the Promotion Menu.
Note that the conversion rate can be calculated only if a specific segment of Loyal Customers has been selected and targeted.
4. Basket Decision Tree
The basket decision Tree measure Shoppers behaviors between 2 periods: • The number of Customers and transactions • How much they spend Basket Decision Tree is a great tool to measure the impact of the Campaign by measuring Customer behaviors evolution between the periodsbefore the Campaign and during the Campaignbefore the campaign and at the end of the Campaign before the campaign and after the Campaign
The example below details the behavior change before the campaign and during the campaign.
In this example, we can see that the Campaign is generating an increase in • Basket Value • Basket Penetration • Units per basket • Average Unit price per basket The same analysis can be done at the end of the campaign or a few weeks after the campaign.
5. New Customer Acquisitions
Imagine that you have been running a promotion campaign in one of these scenarios: • You invited shoppers to Switch from Brand A to Brand B • You invited Shoppers who never buy in a specific category • You invited Shoppers who never bought in 1 specific channel
In these cases, you will be interested in knowing how many new customers did the Campaign successfully acquired? You can easily to this using the Switching segmentation tool in Ariane. In Switching, you start by creating a new customer list. Like in Basket Decision Tree, you will select the previous period to identify all the Customers who did not buy a specific product, or Brand, or category. In the second period, you will select the Promotion Period. You will then select the corresponding category and Brand, and just un the report and select New to Market. And you have immediately the list of customers, their financial weight, and can save it.
6. Customer & Transacions
It is often useful to identify which customers responded positively to a campaign. This customer list (or segment) can be used later on to
• Measure their shopping patterns evolution • Re-invite them to similar promotion
In the case of a Targeted Campaign, the list of Loyal customers that responded positively to a campaign is directly available from the Customer List button as described below.
This list can then be saved as a segment and used later to measure the
7. Tracking Customer Behavior Change
In certain cases, you might want to know if the customer behaviors during a promotion period continues after the Promotion. For example:
• Do shoppers continue buying this Brand? How many of them do? • Do shoppers continue to spend in this category?
To what level?There are 2 options available
Option 1: Switching Analysis (again)This option is to count the Number of Customers who changed or maintained the Shopping Behavior developed during the Campaign.
By selection the 1st period as the promotion period and the second period after the promotion (dates of your choice), and uploading your Customer List from the Campaign Analytics you will be able to see: • Customers who stopped buying • Customers who continue Buying • Customers who continue buying, spending more or less
This can be easily done through the Cohort Analysis function and upload your Customer List, select the category / brand of your choice.
Option 2: Cohort AnalysisThis option is to measure the importance of the Customers who maintained their shopping behavior during the Campaign in terms of spending and shopping frequency. In the Cohort Analysis section, select a period of time after the Campaign, upload your customer list and select the corresponding category / Brand / Product Scope
The 2020 coronavirus pandemic has hit businesses hard and continues to do so. Many store owners have had to shut their businesses down for long stretches of time, and others have had to close their doors completely.
As many businesses have found out – sometimes the hard way , the pandemic has demonstrated that new approaches were necessary, so companies manage to not just survive, but thrive.
This is especially true when it comes to business digitalization.Building on our experience working several retailers in SouthEast Asia and the Middle East over the last 9 months, we identified 4 major directions Retailers have taken during their accelerated Digital Transformation.
1. Modernize Merchandising
Throughout the pandemic, among all practical challenges retailers had to address, work from home (WFH) for Head Office Teams became problematic. From getting access to data to the execution of decision-making processes, the absence of digital and out-of-office accessible tools made the work extremely difficult.
During the same time, most teams faced – and still are – a strong increase in their workloads, having to find solutions to a growing list of challenges from sourcing available supply to quickly setting up home deliveries and online services.
By digitalizing their Merchandising Activities (i.e., using web-based tools that crunch ERP Data and use predictive analytics engine to suggest what action need to be taken, item by item), like TRF Retail), retailers almost instantly improved the efficiency of their teams.
Teams could have access to data and suggestions, workflows were enabling to not only smoothen the relationships between Head-Office and Operations Teams, but also management to follow up and coach, while the quality of decisions improved thanks to the support of tactical data and quantification.
Time and distance are no longer an issue for teams. In fact, as the saying goes, necessity has been once again the mother of innovation and change. And the changes implemented during the heat of the crisis are now anchored into the working organization, continuously delivering gains and improved Customer Experience.
Click here for more detailed information on digitalization acceleration since the pandemic.
2. Rationalize Range & Assortment
In theory, any merchant is supposed to constantly work on improving its commercial offer, navigating the Customers / Competition / Technology trends’ triangle. In that view, there is nothing new in rationalizing range and assortment.
And in practice as well, through many retailers are fully aware of the importance of range and assortment, plans and schedules often remained plans and schedule. Everyone got busy with some other priorities.
Since a few months, the drastic changes of Customers Behaviors and the scarcity of supply have been sharing a new light on Ranges and Assortment. Less frequent shopping trips from Customers and decreased variety in their basket accelerated the need for cash and profitability.
Many retailers realized that embarking on a range and assortment rationalization project without expertise and digital tools was close to Mission Impossible.
These who decided to take the bull by the horns not only delivered better results, but also established new working routines to ensure that changes established during the hard time could sustain. Click here to explore what methodology you can apply to make it in your own stores.
3. Re-visit Promo Activities
In a genuine and candid conversation, a CEO shared with us “One major reason why our profitability grew by almost 2 points is simply because we drastically reduced our Promotion activities.” Knowing the importance of Promo in the retail business model, we asked the same questions to almost all the CEO we are working with. And the big majority shared the same facts.
Let’s do some simple calculation: if the supplier promotion support is smaller to the gross margin gain, from a profitability perspective, why so much effort for promotions?
If we now integrate the traffic and spending variable in the equation, the question is then to measure how much traffic and spending have been potentially lost due to the absence – or strong decrease – in published promotion activities.
At the same time, since customer behaviors have – across a majority of markets – reduce their spending to focus on what is essential and increase their savings – it is also fair to say that even if traditional published promotions were back to their previous level, the business benefits would be much smaller.
In other words, it might be time to reduce the time spent for negotiating for fees for published promotion activities – whose largest share will end up financing operations that won’t deliver the expected results – and start investing more in personalized targeted promotions (PTP).
PTPs, which focus on Carded Customers, not only have the benefits of strengthening loyalty, are 100% measurable. Which means they can be improved and sharpened over time.
4. Strengthen Loyal Customers Engagement
PTP is an efficient way to strengthen Customers Loyalty. And with time, it might quickly reveal itself as necessary and still insufficient. There is a lot of other Data Driven actions CRM and Marketing teams can undertake to strengthen loyalty.
On the information level, it is not difficult to inform specific segments of Customers about new services or products that concern them.
On the communication level, it is not very difficult to engage a specific Customer in an online survey.
In the same line as reducing Mass Promotion, the concept here is to leverage data to engage concerned customers in a discussion that matters to them. It is to tell them about you, and it also be for them to tell you about them.
Don’t worry, HPTC can help you with all of that with our Digital Transformation tools, all the while saving time and money.
HPT Consulting is the leading Digital Transformation platform for Retailers in South East Asia.. We help Category Managers Retail Analysts, Sales Manager, and Senior Managers organize, structure, enrich their data, and automate their business processes to take better decisions and actions for their consumers and shoppers.
Promotion is the most powerful method of communication to tell shoppers to buy more of your products, re-purchase your products, and buy your new items.
Promotion is the method of creating an effective relationship with Retailers. It shows how you are serious to be part of the Retailer to improve business.
Promotion is the method to improve and gain your sales, market share, replenishment, and inventory.
Promotion for the retailer is the method to draw customers to shop at stores onlin and offline, which will also create HALO Effect in overall shoppers’ basket
Promotion for the retailer is the method to be distinct from other retailers as destination shoppers’ shopping trip
Since the start of the pandemic, growth has been driven from a like for like perspective instead of expansion.
At the same time, Retailers are having an increased focus in rationalizing their assortments to boost Sales, Cashflow and optimize Space. In this new retail reality, range and brand’s effectiveness has become one of the most effective sales driver.
Your business needs to have a deeper understanding of your customers if you want to remain competitive and relevant in the market. Knowing your customers’ demands will give you an idea of how to tailor your operations to be more profitable. But keeping track of their varying demands can be tough. Fortunately, you can use tools such as customer data analysis software to help you gather and analyze your customers’ behavior, preferences, and needs.
According to Deloitte, 82% of consumers prefer doing businesses with brands that can respond to their needs than with businesses that pursue their own self-interest. This goes to show how important it is to take a customer-centric approach in your business. Engaging in customer data analysis would ensure your customers’ satisfaction and loyalty. With that, here are some of the best practices you can use in your customer relationship management or CRM data analysis to save time and optimize your operations.
1. Automate data collection
Every interaction with your customers yields valuable data that you can use to improve your business processes. Whether they are purchasing something from your brand or simply making an inquiry, you can learn a lot from every point of contact. The challenge now is how you can extract such data from each interaction.
Fortunately, you don’t have to do it manually. Nowadays, there are various customer behavior analysis tools that can automate your data gathering. It monitors and tracks your customers’ behaviors during transactions. Likewise, it can also take note of general customer trends and behaviors beyond your interactions with your own customers. This gives you a more complete and comprehensive overview of consumer demands within the market.
2. Centralize customer data
Working in silos can be inefficient in the long run. The same is true when it comes to customer data analysis. Instead of having a separate customer database for each department within your organization. It would be better to consolidate them in a single, unified platform that is accessible across departments. For example, a CRM for retailers would be a great platform where retailers can store customer data. It is an all-in-one platform that collects and analyzes individual customer data to help improve your relationships with each one. This helps with segmentation and personalization. But most importantly, it centralizes such data and makes it accessible to important stakeholders within your organization. This includes your marketers, sales agents, customer support agents, and more.
3. Clean your data
To get accurate results from your customer data analysis, you must ensure that you captured the right data in the first place. Hence, an important aspect of customer data management is cleaning it. This means inspecting the data to look for errors and inconsistencies. If there are any, you fix or remove these outliers. From there, you test the changes for their validity. Finally, you can log those changes and report on overall data quality.
The more your business grows, the more you become overloaded with data. As a result, this takes more time and expertise to organize, clean, and check the data you are gathering. By then, it would be better if you consider subcontracting your customer management. Doing so allows you to spend less time cleaning and enriching your data and focus more on implementing actionable insights into your operations.
4. Turn data into actionable insights
Customer data has various uses for your organization. But in its raw form, it is neither useful nor actionable just yet. You need to take time to see what the data is saying. This means identifying patterns, trends, and anomalies across the KPIs that you have set beforehand.
Keep in mind to remain as objective as possible when analyzing your customer data. Avoid shaping the data to get the result you want. Rather, you should let the data speak for itself and accept whatever the conclusion is.
Thankfully, there are several types of data analysis in CRM that you can use to turn data into actionable insights. This automates the process and ensures that you get accurate results. Most importantly, it presents these insights into digestible formats such as charts, graphs, and reports.
5. Use insights to make smarter decisions
By extracting insights from your customer data, you can now implement these insights into your operations. It helps you determine what processes need to improve to accommodate your customers’ demands. Moreover, it gives you insights into how you can also improve your product and service quality
As a result, you now have information that you can use to make smarter decisions for your company. So rather than let it go to waste, make sure to pay special attention to them and incorporate them into your future strategies.
Choosing the right tools Nowadays it is important for your business to take a customer-centric approach in its operations. Through customer data analysis, you can optimize your processes and make them more profitable. But most importantly, this allows you to create the best customer experience for your consumers. So go ahead and invest in various digital tools to help you leverage accurate customer data analytics into your operations.
One can easily find CRM glossaries online, and some of them are really good. Still, we could not find a glossary that is specific to retail and that could explain the practical usage of the main components of CRM for our own growing Teams.
So, we decided to build our own. If we are lucky, our little efforts will also be useful to others
Ulys Customer Intelligence SaaS Software ™ is a Retail CRM online Solution published by HPT Ariane Ltd, South East Asia Leading Retail Collaboration Platform.
Fed by POS Data, ERP and CRM Data, Ulys Customer Intelligence SaaS Software ™ is a tool that enable retailers and marketers to understand customers purchase and non-purchase decisions.
Developed by and for retailers, Ulys Customer Intelligence SaaS Software ™ is both offering simplicity in its usage as well as a really deep level or granularity.
Ulys Customer Intelligence SaaS Software ™ is articulated around functionalities:
CRM Performances & Profitability Dashboards
Purchase behaviour
Basket Analyses
Purchase Trends
Customer Segmentation
Promotions
Customers history
Like many companies, our CRM activity is growing fast. Retailers are in high demand of improved CRM solutions and advanced Analytics. So, our Teams working on the development of our CRM Tools, as well as our Teams commercializing these solutions, are growing too. To welcome these newcomers, who might not always have an extensive experience of Retail CRM, we started looking for CRM Training Materials, especially glossaries, online.
One can easily find CRM glossaries online, and some of them are really good. Still, we could not find a glossary that is specific to retail and that could explain the practical usage of the main components of CRM. So, we decided to build our own. If we are lucky, our little efforts will also be useful to others.
Part 1: Customers
Loyal Customers
Is a customer who owns a Loyalty Card – physical or Digital from her preferred Shop. Loyal Customers are often referred to as carded customers, in reference to the loyalty card they own.
Active Customers
Is a Customer that shops at a certain frequency, defined by the retailer. For example, if that frequency level is defined at least one shopping trip every 4 weeks over a period of, say 12 months, every customer that correspond to that pattern (shop at least 1 time every 4 weeks during a period of 12 months) is considered active.
A Customer who shops below a defined threshold of this pattern will be considered as inactive.
New Customer
A new customer is a customer who recently acquired the card. Each company will define its own duration during which a Customer can be labelled as New.
New Customer Onboarding Journey
Defines the several steps a customer will go through from the first interaction with the Loyalty Program (information quality, simplicity and easiness of access), then the registration itself, and the several interaction the retailer will have with her during the first weeks of her experience as a new member of the Loyalty Program Community.
Note: this is a Retail CRM area which is often forgotten by retailers, although it might be one of the most important components of any CRM Strategy. Let’s remember that there is the word Relationship in CRM. And like for all relationships, a good start can promise a great future
Basket
Defines what carded customers buy during a shopping trip, online or in physical stores.
Share Of Wallet (SOW)
Defines the percentage of expenses of a group of products compared to the total basket value. Imagine a Customer spends 10 USD in her store visit. In these 10 USD, 2.75 USD have been spent on toothpaste and toothbrushes. The Oral Care share of Wallet of that customer in that shopping trip is then 27.5%.
The SOW can also be used to measure the customer behavior towards an activity
Imagine you run a promo for a Shampoo valued at 3.9 USD. If the Shampoo SOW is 95%, it means that the shopper came to your store to buy this promo only, indicating that no additional purchase has been generated from the promo.
Housewife Basket (HWB)
Details and rank the products which are the most found in the baskets of Customers. The products that are the most frequently found in the Housewife Basket are therefore the products with the highest penetration rate (see Basket Penetration)
Customer Lifetime Value (CLV)
CLV defines the value a customer will deliver to the retailer during her lifetime, either form a cashflow perspective (sales) or profitably (margin) perspective.
There are several ways of calculating CLV, and one of the most detailed and well explained approaches can be found in this article from Maryna Sharapa.
Part 2: Behaviors
The behaviors we want to focus on here only concerns what happens once the Customer is in the store (physical or digital)
Frequency
Is the number of times a customer shops within a certain time period
Recency
How recently a customer has made a purchase
RFM [Recency-Frequency-Monetary]
RFM analysis numerically ranks a customer in each of these three categories, generally on a scale of 1 to 5 (the higher the number, the better the result). The “best” customer would receive a top score in every category.
ABC Analysis
ABC analysis is a method of analysis that divides the subject up into three categories: A, B and C. It uses the Pareto principles and enables to group customers from the most valuable (A segment) to the least valuable (C segment)
COHORT Analysis
A cohort is a group of people with similar behaviors or characteristics within a certain period of time. Cohort analysis is a type of behavioral analytics, which is primarily identified by breaking down customers into related groups in order to gain a better understanding of their behaviors
Drop From Market
Is a market research term that defines customers who used to buy from a (set of) categori(es) during a certain period of time and then stopped.
New To Market
Is a market research term that defines customers who did not buy from a (set of) categori(es) during a certain period of time and then started.
Switch Gain
Defines, for a Brand, a group of customers who used to buy competitors’ Brands and then switched to their own Brands.
Switch Loss
Defines, for a Brand, a group of customers who used to buy their brand and then switched to their competitors’ Brands.
Part 3: Customer Engagement
Loyalty Program
A loyalty program is a marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program. It is usually embodied by a system of Card, physical or digital, which enables Customers to both accumulate and redeem points – or any other internal currency – as they shop.
Over time, Loyalty Programs have evolved from a Points Bank positioning to a promotion factory as well as active Communities where several benefits and advantages – involving 3rd and related parties – are offered to its members.
The major ongoing trends in Loyalty Programs are:
Increase of the Customer Centric-Evolution
Review the Financial and Economics Models of Loyalty Programs
Presence in various eco-systems and marketplaces
Increased convergence with payments and Touch-Free
Data Security
Ever evolving member expectations
Conversion Rate
Defines the number of customers who used a coupon or other received promotional mechanisms compared to the total number of Customers who received it
Campaign
A campaign is a set of special offers proposed to customers over a period of time. Campaigns can serve several purposes and focus on various targeted members or future members
Recruitment campaigns to invite new members
Activation campaign, to stimulated specific member
Promotion Campaigns
Private Label Campaigns
CSR Campaigns
…
Campaign Management
Is the ability to plan and monitor the several steps of a campaigns to maximise its efficacy and effectiveness. If we compare a Campaign Life Cycle to a Product Life Cycle, specific messages and stimuli will be needed at various stages of the Campaign’s life
Onboarding Journey
Defines the several steps (the Experience) a new member will go through from right after her becoming a member to a certain period in time after the recruitment. It is useful to define these steps as well as setting objectives to the Onboarding Journey.
Churn Rate
The churn rate, also known as the rate of attrition or customer churn, is the rate at which customers stop doing business with an entity. It is often as the percentage of service subscribers who discontinue their subscriptions – de facto or by stopping their shopping – within a given time period.
Churn Management
Every time a customer leaves the program is a great opportunity to learn what happened. Churn Management consists of 4 key points:
Understand why Customers leave
Identify Customers most at risk to leave
Identify among these customers who are the one we want to keep based on the value they bring
Setup strategies to keep them
Targeted Offer
A targeted offer is a commercial proposition sent to a specific customer based on her shopping preferences and behaviors.
A targeted offer can be part of a campaign and is anyway managed like a campaign
A targeted offer can be initiated and financed by the retailer.
A targeted offer can be initiated by the retailer and sponsored by supplies
By definition, the Targeted offer is personalised.
Part 4: Thoughts on CRM
Initially designed as a Point issuing Bank, CRM has evolved into a sophisticated tool to retain customers.
Technology now enables CRM program Managers to do much more than issuing points: they can create communities, be present in several eco-systems, enlarge the markets for the value of their own internal currency (the Point), understand shopper behaviors and directly interact with them with an adapted offer (i.e. Range, Assortment, Price and Promotion)
Towards a new revenue management system for retailers
During the Pandemic, in locked-down and economically shattered environments, several retailers realised that their bottom line, despite the huge increase of operating costs and potential cash-flow challenges – was not that bad. One of the key reasons is that they had to drastically decrease their promotion and communications.
Still, even as retailers could not publish as many promotions as in the past, most of them successfully maintained suppliers support.
Still, It is probable that it might take some time before the return to massive promotion communication strategies.
Consequently, retailers will have to find new ways of generating additional income from suppliers to compensate the decrease in Promotion Support fees.
The alternative and the big risk
CRM and its ability to build personalised and targeted offers is one of the most attractive alternatives for both physical and digital commerce. Such offers will be more efficient, and their generation of additional traffic and spending will by far surpass, at the member level, the results of previous mass promotions.
At the same time, customers level of satisfaction will also grow since the offer they will receive will be truly relevant to their needs and aspirations. And the fees income will be much greater, by product, than these generated through mass promotion communication.
The big risk for retailers and marketers is to over-exploit the direct and personalised engagement opportunities technology offers today. New business rules will have to be established to ensure that the retailers don’t become another nuisance on the Customer’s mobile phone or email inbox.
CRM Management needs a re-think
At the very beginning of CRM, the CRM Manager was essentially a Finance expert: she was managing points, evaluating their impact of the margin and balance sheet. Her work and analyses were driving the financial value of the point and the redeem strategies.
CRM Management is today at a stage when CRM Managers have developed advanced analytical skills to understand shoppers, adapt their commercial offer accordingly, and build strategies: traffic pull, spending push and retention.
Today, CRM Teams face a new challenge: address what customers want more than money. Most researches on the subject agree that what matters most for customers is a collaborative relationship where consideration is the highest value currency. “Can’t buy me Love” as the song goes.
In other words, it means that CRM Teams need to find ways to entertain personal relationships with millions of individuals simultaneously. Emotions are as important as transactions.
Yes, of course technology will help. But technology will only help automate a set of business rules and communication engagement that Teams will setup (and yes again: Machine Learning will help optimise them).
So the paradigm-shift is here: the future of CRM and Customer engagement needs to accelerate its migration from “Mostly Transactional” to “Emotional and Transactional”.
In practice, it means that CRM Teams will have to change some of the usually asked questions like “How much should we invest / Finance” in such or such customer scenario into “What Question Should we ask?” or “What would be the best thing to say?”
From an operational perspective, it implies that Teams will have to setup new workflows, new metrics and new rules to address all the non-transactional aspects of the relationship and remain consistent with the Retailer’s vision on the omni-channel Customer Experience it wants to offer.
