CRM Is Not A Four Letter Word.
CRM or Customer Relationship Management is probably the most misunderstood term in contemporary retail. Most associate it with exorbitantly expensive and dubiously productive rewards programs. From some of the so-called CRM systems I have seen in the past, this reputation is entirely understandable.
In the 21st century however, best practice CRM is “action oriented M.I.S.” or management information systems. That is, great CRM systems sit at the very heart of an organization driving productivity gain through end to end (sourcing to shopper) insight that reduces organisational resource usage (time, cost, energy) and drives revenue growth – including new sources of revenue – in turn delivering EBIT gain.
For customer relationship management to be relevant to a retail business, that business must first hold two beliefs:
1. A retail business will be more productive if it works from the customer in (pull model) rather than business out (push model).
2. Sustainable profit growth comes from lifetime customer profit contribution not individual transactions.
With those two beliefs in place, retail CRM can:- – identify and profile customers and track their behaviour – create customer behaviour change insight & enable actions to exploit it – build direct two-way communication with customers – align business enablers, capabilities, systems & processes to customer behaviour – reduce cost & wastage – focus investment where it is most productive – develop new sources of revenue – drive more sales from existing customers & retain them – recruit new customers & retain them
More over retailers like Tesco have demonstrated that when used as a business wide tool, CRM creates a backbone for MIS which transforms the organization by simplifying everything down to a single A4 sheet of paper which outlines prioritised insight and prioritised actions.
CRM is not about rewards. It is about EBIT.
CRM is not about margin erosion. It is about customer profit contribution
CRM is not about mounds of data. It is about actionable insight.
CRM is not about technology. It is about how you drive the business.
If you are not embracing CRM right now I urge you to consider how it could transform your business. Don’t take my word for it. Read up on what drives Tesco’s success at the very least. CRM is not a four letter word, but if it was it would probably look more like EBIT.