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Guest comment: How CRM can improve your e-commerce site

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By Amanda Squires

Although more and more people are shopping online, the rise of price comparison sites and a tough economy mean that consumers are generally spending less, but are simultaneously more informed about what they are buying.

While price discounting may help drive sales in the short-term this cannot be the cornerstone of a customer acquisition and retention strategy if online retailers want to achieve their long-term goals. For this they need to implement a thorough customer relationship management (CRM) programme. This is particularly relevant with the higher end of the high street and luxury brands where discounting is just not part of the brand strategy.

Faced with finding new and innovative ways to draw people to their sites and keep them coming back, CRM can help e-tailers more effectively use the assets they already have. By tapping into a wealth of information – including inventory, buying guides, videos, and site search and sales data, not forgetting input from their existing community – e-tailers can enhance shopping experience at every consumer touch point, whether it’s online or over the phone and whether it's sales, service or marketing.

Facebook, blogs and other social media tools have now added an extra layer on to the traditional approach to CRM and have made this a realistically achievable goal for smaller retailers and brands as the information available about their customers and their preferences, purchases and recommendations is ever present.

The reality is still that the best-run and most successful companies throughout the recession are the ones that have focused on their most valuable assets – their customers. By maximizing the effectiveness of every customer interaction, CRM can help reduce cost and increase decision-making ability. Furthermore, it can provide the insight and analysis retailers need to anticipate customer needs and build lasting, profitable relationships – creating unique and tailored customer experiences, building relevance and loyalty.

If you’ve got it, use it

The simple rule is if you've got the data, then use it; don't simply display it. If you want a shining example of how to use CRM effectively, you need still look no further than Amazon. The store allows its customers to explore items based on what matters to them, whether it's a particular category, item attribute, discount percentage, star rating or shipping option. Throughout the whole user journey, Amazon keeps its customers at the centre of its ideas, paying close attention to design and usability, as well as the type of information to include. This is more important with the more data you bring into play online. The experience must remain relevant and engaging without overwhelming users.

Sales data is another asset e-retailers already have readily to hand, and this can be used to advise shoppers, by, for example, promoting top sellers that are relevant to given searches. Using other types of data – from video and buying guides – can also be used to showcase items in new ways and help shoppers, especially when purchasing bigger ticket items.

Again, by turning their attention to their existing community, online retailers can open the door to yet more untapped potential content – everything from user-generated reviews, to recommendations and product ratings – that can be used to help inform shoppers and drive sales.

As unsexy as it sounds, online retailers can do no better for their businesses and their immediate bottom lines than by implementing a CRM strategy. However, there is a lack of understanding around the CRM process, particularly around the notion of how to get it off the ground, what it means for businesses and, most importantly, what people need to do to get their CRM strategies in place.

The problem is that although you can hold companies such as Amazon and Ocado up as excellent examples of how to employ CRM effectively, these companies have invested millions over the years. This is something that is just not within the reach of mid- and small-size retailers.

What we see from our clients, many of whom fall into this category, is that they understand the importance of collecting data and often have two distinct streams (sales and marketing) that they often can’t figure out how to draw together. The result is that you tend to get a marketing database that gets hit with email marketing messages three or four times a month.

Social media, however, is starting to change the CRM landscape with the discipline manifesting in different ways of using different tools and channels. This is allowing the smaller online retailers to jump on the CRM bandwagon without having the initial outlay for the software licensing costs. The smaller retailers are finding it easier to monitor attitudes towards their brand and engagement with it and then feeding this information into their affiliate programmes to drive sales.

If retailers are looking to have their websites overtake their flagship stores in terms of revenue, it is not enough to have a great-looking website, they must really concentrate on the strategic aspects of e-tailing.

People know they need to be analytical but they don’t necessarily believe they have the budget. It’s a major barrier to success and one hopefully social media is helping us to overcome.

ENDS

Amanda Squires is client services director at Pod1

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