Originally published in Contagious.
You’ve done it. Your online retail presence is top notch. Your brand’s website is best in class. You have squared away your product detail pages across every digital channel. Your smart, segmented media campaigns are filling your funnel, and your sales growth is encouraging. But don’t break out the bubbly just yet.
No matter how well you’re doing in the short term, you are probably not affecting your most important driver of long term revenue and brand health: customer lifetime value (CLV). Today, many brands are competing well on price and product, but failing to build lasting relationships with their customers. And it’s not hard to see why: one recent study found that consumer expectations had increased 23% in the past year, while brands had improved by only 4%.
The implications should be clear: traditional CRM has become table stakes. The strategies marketers used to use to build loyalty are now expected, not appreciated. Things like shipping confirmation emails, good customer service, and follow up communications merely meet expectations for transparency. They do not create real differentiation. Nowadays people aren’t impressed by embedded tracking numbers. They expect an option for callback if a service centre is overwhelmed. They don’t necessarily reward those things with loyalty, though they do punish a lack of them.
In addition, the customer journey has become fantastically connected and varied. Today, one customer might hear about a product on YouTube, see a display ad, read a review on Amazon, and then check out a product page. Another may view a quick video about it and instantly click “add to cart”. Brands have to solve for an infinite number of journeys, and they can’t do so with a CRM system that produces a set of messages that are broadly generic and sadly anonymous.
To succeed, brands need to do more than nail the requirements of any one channel. They must gain a full view of the entire consumer journey and account for all possible conversations at whichever touch points they take place. They need to acquire behavioural data that identifies unique segments and triggers the right messages. And most of all, they need a marketing technology platform that enables them to deploy near 1:1 personalisation at scale.
The good news is that the industry is seeing a substantial upswing in CRM capabilities. It began with the rise of new CRM-driven commerce companies. The Warby Parkers and Dollar Shave Clubs of today achieved breakout success by custom building systems around direct-to-consumer business models that incorporated commerce together with CRM. That gives them deep, personalised insight into their customers and the ability to target communications over the lifetime of the relationship.
Luckily, you don’t have to build such a system from scratch anymore. A wave of consolidation and innovation is afoot in the CRM space, making it much easier for established brands to get up to speed. For example, Salesforce, a leading CRM player, has recently purchased Demandware, a major digital commerce player. Gartner has named Apptus and Elastic Path, both commerce platform companies with relationship management core technologies, visionaries in its Magic Quadrant for Digital Commerce.
Such solutions allow brands to look at every message in a more nuanced, multi-dimensional, and data-informed way. They can integrate insights from behaviour, past purchases, and pages visited – and then use them to generate targeted and relevant communications across the customer journey.
For a simple example, brands have a big opportunity with shipping confirmation emails (they have six times the click through rate of a special offer – and twice the reopen rate). Yet most brands throw away this chance by restricting their communication to a tracking number, which is the equivalent of shaking hands and expecting a life-long friendship. It’s time to take what you know about a customer and turn moments like these into points of real connection.
In other words, CRM is emerging from the dark ages. It’s no longer an email application. It’s a marketing and commerce platform with a comprehensive set of tools and activities that allow you to take what you learn from data and reach customers with relevant messages that build a lasting relationship.
The next step will, of course, involve better integration between CRM and social. Once that happens, you’ll be able to integrate and regularise communications across social, email, and mobile apps. Rather than sending endless promotions to people who are barely interested, you’ll have an engine that automatically nurtures relationships and creates real brand advocates.
At that point, you can certainly crack open the champagne. It’ll be well deserved.