However, he also explains how advertising won’t remain competitive without first-party data, and so expectations for CRM – and integrating it with paid media – are high.
Hannah Stacey suggests that this can be an overwhelming process. “With so many options – what automation campaigns should they set up? What channels should they focus on? What marketing messages should they personalise? What customer segments should they be targeting? What does best practice for all of this look like?” she asks. Drilling down on what will have the biggest impact on business is key here.
1. Getting data in order
One way to create differentiation is to think beyond basic targeting, into more sophisticated forms of personalisation. Hannah Stacey says, “When it comes to offering those great experiences, I think it’s true to say that technology-wise retailers now have a lot of options – we’ve moved way beyond sending a few basic abandoned cart emails (though these are still a very effective tactic!) and putting peoples’ first names in an email subject line.”
Michael Chadwick mirrors this belief, suggesting that – in order to keep customers coming back – marketers need a deeper customer understanding, alongside a more sophisticated use of data.
Customer relationship management (CRM) remains a key way for companies to deliver ‘customer centric’ marketing, centred around personalised and relevant content (if you’re not sure what CRM is, see our handy definition).
2. Avoiding short-termism
“For CRM – a discipline built around the notion that knowing a customer means we can better service their needs and build a relationship with them – it’s therefore critical we respond to this acceleration of consumer flux.”
For much more on this topic, read the following Best Practice Guides:
“The difficulty for many marketing departments is that their CRM runs in a silo, both with separate teams and data systems,” he says. “Predicting LTV to drive campaign bidding, for example, relies on models that can’t be developed to full effect without all your first-party data being drawn together.”
The Fundamentals of Marketing Measurement and Analytics
3. Growing subscribers
2020 and the start of 2021 has been a mixed bag for retail brands – some (particularly those who are online and have a lockdown-relevant offering) have thrived, while those dependent on bricks and mortar have struggled.
What is zero party data?
However, as Econsultancy’s ‘Content Strategy Best Practice Guide‘ also highlights, a culture where testing is embedded in wider strategy can be much more effective. In order to do this, the report suggests that companies should take critical steps such as ‘ensuring buy-in and support from the most senior levels of the team and the organisation to the growing importance of data and analytics.’
4. A lack of scientific testing
“As such,” says Pay, “scientific A/B testing is seen by marketers as a luxury – something they simply don’t have time to do. Or, it is a mystery, as they have never been taught how to do it.”
Marketers have never had as much data at their disposal as they do right now, but prioritising and consolidating data in the right way is not always easy.
Speaking at Econsultancy Live 2020, Saul Lopez, Head of CRM for Dixons Carphone, explained how making these customers a priority helped the company build connections (and deliver better personalisation in the long-term).
“This whole new focus on CRM has been triggered by concerns for user privacy, and at the same time, the transfer of audience data from CRM to advertising platforms will often rely on transferring and uploading personally identifiable information. It could seem like a contradiction, and CRM teams will need to book meetings with InfoSec as well as IT.”
5. Creating a culture of testing
“Additionally, by then looking at the more granular metrics such as AOV, frequency of purchase, conversion rate,” says Pay, “we can begin to understand how we can increase customer lifetime value.”
Renewed concern over first-party data is having an effect on CRM marketers, according to Kevin Joyner, Director of Data Solutions at Croud. He suggests that the industry is experiencing a shake-up, “caused by intelligent automation technologies, and developments designed to protect user privacy.
Short-termism remains another key issue for CRM and email marketers, who tend to focus on the short-term success of current campaigns. Kath Pay, the CEO and founder of Holistic Email Marketing, suggests that – by looking at wider subscriber metrics including open and click reach – CRM marketers can gain a better understanding of overall performance.
6. Keeping up with changing consumer behaviours
Pay suggests that this can then enable marketers to uncover ‘low hanging fruit’.
This means baking innovation into programmes, and delivering CRM that is not just a reflection of what consumers did or historically wanted, but what they will want going forward. Chadwick confirms – “A consumer’s preferences from yesterday may have changed by tomorrow – and we need to deliver dynamic CRM programmes which have the agility to listen and respond to consumer needs at pace.”
CRM marketers can also be guilty of focusing too low down the funnel, dismissing customers who are yet to subscribe as well as those who are subscribed but but do not engage.
However, as Stacey confirms, “that in itself isn’t an easy task – it requires having access to the right data and insight; the means of benchmarking your performance to know whether you’re in a good place or not; and, most importantly, being able to be certain that whatever initiatives you dedicate time and resource to will drive results. The retailers that take a data-driven approach to what they should be prioritising will be the winners as we emerge from lockdown.”
7. Managing user privacy
In Econsultancy’s 2019 Email Marketing Industry Census, 73% of respondents rated email as ‘excellent’ or ‘good’ in terms of return on investment, making it the number one digital channel for ROI. Despite this, CRM remains largely under-budgeted and under-resourced, which Kath Pay suggests can lead to pressure being placed on marketers, and leaves very little time for them to achieve their KPIs.
Until this work is done, Harriet Durnford-Smith VP of Marketing & Growth at Adverity suggests, there is little point in investing further. She states: “If you haven’t got your data in order, if you haven’t got a holistic view of your marketing, if you can’t get your data out of your channels to build any kind of reporting, then don’t bother investing in some shiny new tool. You have to get your house in order first.”
Adopting a test-and-learn approach
Kath Pay also suggests that a focus on continuously getting to grips with new technology can in itself become a barrier. “Most CRM marketers come in at the bottom level – they are very hands-on, and work their way up, meaning that they’re generally more tactical and technology-led than strategy-led.”
8. Competition and brand differentiation
One consequence of increasingly sophisticated technology stacks is the need to prioritise the right things, and fast.
In contrast, she says, “[more] scientific A/B testing focuses on long-term learnings, statistically-significant results and metrics that matter, such as your conversion metric. This means that many of those marketers who are A/B split testing, are actually optimising for the wrong result.”
Consequently, Hannah Stacey, Brand and Product Marketing Director at Ometria, suggests there is a growing challenge in competition and brand differentiation.
In order to avoid getting lost in a sea of irrelevant data, Econsultancy’s ‘Fundamentals of Modern Marketing Measurement and Analytics’ report highlights the importance of sticking to an established framework in order to create a measurement plan and steer implementation.
9. Delivering sophisticated personalisation
This stems from the massive consumer behavioural shifts seen last year, some of which will be temporary, and some permanent. “What we know for sure is that such moments create permanent disruption of habits and loyalty – as we’ve already seen from recent increases in brand-hopping and more experimental consumer behaviours.” says Chadwick.
“Everything points towards customer experience being the key competitive differentiator for retailers going forwards – in such a crowded market, online retailers will have to fight for every single purchase, which means giving customers a good reason to come back and shop again and again,” she says.
Regardless, it’s clear that everyone is now setting their sights online – ONS data suggests that ecommerce usage grew around 10 years in the space of three months – and part of that is retailers of any size or vertical looking to rapidly increase their digital capabilities.
Pay suggests that this is where short-termism again raises its ugly head. “The technology for A/B testing within CRM platforms is basic and misleading and centres very much on engagement metrics, and short-term benefits.”
10. Prioritising the right things: fast
Michael Chadwick, Head of Strategy at Cheil UK, suggests that a key aspect of CRM strategy in the near-term will be understanding where consumers are going – not just where they’ve been.
But what are the key challenges facing CRM marketers today? With insight from some experts in the industry, here are 10 pressing issues.
“If you think about it, if you just grow the number of subscribers in your base by 10 or 20 percent, focusing on prospecting opportunities, you’re going to drive more CRM revenue,” says Lopez. “This is why I always like to change the conversation from CRM transformation driving personalisation to a conversation around driving revenue and driving conversion.”
“We can look at increased usage of zero party data as a way to deliver this,” he says. “Consumers are expecting more from brands, they are expecting more personalisation from brands – and dialogue and reciprocal value exchange will be a key engine in providing this.”