A few years ago, my wife secretly booked an iMac computer for my birthday as a gift from a store that we often visited. However, the computer did not arrive on time, and that really irritated her as it was meant to be a surprise. So when she finally made the big reveal about the iMac a few days before my birthday sounding absolutely dejected, we decided to visit the store. There, we learnt from the store manager that they were out of stock for the iMac across Australia.
However, the next day, we found out that Apple was selling the iMac at their Apple store, and not via their other retail partners. It was an extremely infuriating situation. When we informed the store manager about this, he somehow managed to source an iMac for me from somewhere just before my birthday and won us over.
But why did he go to such lengths?
The answer lies in the proper use of customer relationship management, or popularly known as the CRM system. In just a miniscule timeframe that we were at the store expressing our frustration, the store manager was able to identify us as long-standing customers, note what our preferences were, what was our purchase behaviour and history. Armed with this data, he and his team did what was most important – which was to make their customers feel valued – and provided us with the best resolution. But is this only about a CRM system? Not really.
CRM is not a new strategy. It has been practiced for centuries. Let me give you an everyday example.
Let us take a walk into your neighbourhood grocery. The local corporator’s wife visits the shop everyday to purchase fresh fruits and vegetables, most often not intimidated by the pricing as long as the products are fresh. This is because she needs to entertain high-profile guests. When she visits the shop, the grocer often helps her handpick some of the fruits and vegetables that she intends to purchase. The current economic value that she adds to the grocer is high, and hence he invests greater time and effort in retaining this customer for the long term.
Ever so often, the hardware store owner from next door drops into the grocery store to have a chat with the grocer. They enjoy long conversations and the hardware store owner occasionally buys his grocery from here, but his purchases are never consistent. Now, every time a high-value customer comes around, the grocer takes his leave from the hardware store owner’s tete-a-tete to attend to his buyers; but when he has time on hand, he indulges his neighbour’s conversations despite the fact that he is a customer of lower value. After all, what if he spreads negative comments about the grocer to his friends or customers!
Then there is a young couple that comes by to make an occasional purchase. The grocer greets them with a courteous smile. The grocer knows that they do not buy all their groceries from him, but he is not sure why. They are low value customers as well, just like the hardware store owner. Nonetheless, the grocer still values them to an extent because they keep returning to his store to purchase specific types of fruits and vegetables. He also feels that they have the potential to become high value customers in the future.
With each of the three customer types, the grocer knows in his mind the value that they add to his business based on their level of loyalty to him across their lifetime. He knows what his customers want. He is also acutely aware of any past incidents where his customers have been upset and avoids these situations. He treats them all well, but he understands the perks of focusing on clients based on current and potential value.
Just like the grocer’s mind calculates the CRM value of every customer, so did the electronic store that, of course, used the data in its CRM software to understand our value and provided us with service accordingly – which was to expedite the delivery of the iMac computer based on our past buying behaviour.
Irrespective of whether it is a grocer or a big brand, ultimately the customer experience strategy designed by every brand must be based on comprehensive analytics to offer a differentiated, yet pleasant, service.
So what does an ideal CRM system within your operational fabric need to have? For one, it needs to have a record of your brand’s contact history with every customer across touchpoints. These must include an analysis of their past purchases, their likes and dislikes, and their preferences of payment methods, budgets, brands, segment indicators and more.
How do you turbo charge your CRM system?
A CRM mindset is powerful, but primarily has an inside-out perspective. It is about how a business views a customer in terms of current value, potential value, recent transactions, demographics, product holdings, segmentation, etc. Imagine how powerful it would be if you could couple this inside-out information with outside-in insights via cleverly designed customer insight surveys! As an example, imagine what would happen if the grocer who knew what his customers preferred also knew exactly what his customers thought about him. What if he knew that the reason why the young couple did not shop at his store for all their vegetables was because he did not have a large range of organic vegetables! What if he also discovered that this was a requirement that was critical for a growing percentage of his customers, and that if he did not include more organic products in his store, he may begin to lose his share of wallet.
Let’s look at a scenario when a customer calls the call centre. In addition to knowing all the usual inside-out stuff, the CRM system also identifies that the customer was a detractor in the last survey. The service agent can then immediately be notified to tread carefully on the call and enhance the customer’s positive experience.
Another scenario is where a sales representative is visiting a client to upsell to them the latest product. Before the visit, he can dig into the CRM database and understand exactly what the customer feels about their organisation. This will help him tailor the sales conversation accordingly.
If you have stayed with the Ritz Carlton more than once, you will have realised that irrespective of whichever of their hotel branches you stayed in earlier, during every subsequent visit, your smallest of comforts are also taken care of. You will find your favourite treats on the table in your room, your pillows will be fluffed to suit your preference… the CRM system is absolutely seamless on a global scale. Based on the data it collates about every customer, the staff at Ritz Carlton leverage it to build stronger relationships.
This is where the electronic store and the Ritz Carlton do what should be done by every organisation that has a CRM system in place – take on a combination of an inside-out and an outside-in approach. Over the 30+ years of my experience in the customer experience space I’ve found that the most powerful brands are built precisely on this premise. They conduct comprehensive customer feedback surveys – not the generic 2-question surveys – across functional and emotional elements. They combine these insights with the data in their CRM system. Such comprehensive information gives them the leverage of critical insights into the purchasing behaviour of every customer, thus empowering them to offer their customers with a valuable and personalised experience every time, driving loyalty and growth.
Managing Director, Engaged Strategy