Beat Out The Big Retailers With Crm Finesse
Interestingly ecommerce industry leaders report that here are a relatively small number of retail leaders who have a fully implemented CRM program
. While there is widespread use of CRM, it is unevenly implemented and often not well coordinated. This observation includes and to a large extent reflects the efforts of large online retailers, especially those retailers who have added an online arm to their bricks and mortar businesses.
There are a number of good reasons for the slow growth of sophisticated customer relations management among ecommerce businesses.
Culture Shift
Bricks and mortar retailers have long focused on product selection and merchandising as the primary ways of selling their products. Consider the convenience and full selection at big box stores, the luscious and stimulating environment of sellers such as Victoria's Secret, and the luxury of purchasing at an exclusive boutique where customers are pampered and seen while they shop. It is difficult to transition to an environment where customers do not have to drive from shop to shop to compare prices, and luxury is made unnecessary by the convenience of shopping in your bathrobe at 3am. Many large retailers have not made that transition completely yet.
Short Term versus Long Term
Customer relations involve an extensive commitment to building systems that become a long term investment. Most retailers feel the tension between needing the short term profit fix and the need to make the long term commitments. It is much simpler to conduct a quick hit email campaign than to establish all of the components of a good CRM program.
Compartmentalisation
When large retailers add e-commerce and try to build additional support, they often revert to their traditional departmental lines, which can create difficulty with communication and integration. Ecommerce requires a fast, almost omniscient, ability to understand and fix the customer's problems.
Shift in Emphasis
Ecommerce is data driven in a way that bricks and mortar retail never could be. Wal-Mart does not know where their customer comes from, what gender is making the purchase, where they shopped before arriving at Wal-Mart, what they looked at but did not buy and so on. Most retailers are still building the knowledge and systems to use the data that ecommerce generates to best advantage.
Small Retailers Have an Advantage
Many small online retailers started their careers online and have never developed the traditional mindsets that large retailers have to shed before moving forward. Also there are many, many CRM solutions designed with the small retailer in mind. Plus most small retailers do not have an army of staff that needs to be trained, or a management group that must be convinced before implementing new decisions. Bottom line, the small retailer can be much more nimble than the large retailer. What you as a small online business person lack in resources and staff horsepower you make up in flexibility and mindset.
Interestingly retailers spend between 3.5 percent and 4.0 percent of sales on marketing. As a small ecommerce retailer your marketing spend should be significantly higher, you do not have offsetting overhead to reduce the percentage both because of your model and because marketing is the way your business will live or die.
by: Jane Dawson
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