Archive for February 2014

The Relationship Between CRM and Real Time Marketing Offers

An exciting marketing capability is gaining momentum that engages customers "in the moment" based on real time events through marketing offer optimization.  This goes well beyond the traditional approaches of personalization by leveraging optimization and predictive analytic techniques rather than static rules.  As a customer interacts with a merchant (e.g., enters a store, visits a website), the merchant intelligently engages with the customer with real time offers and communication to significant improve conversion of a sales opportunity.

When marketers and technology professionals are exploring how to implement to real time offers, there is often confusion on what role CRM plays.  CRM is not sufficient to deliver real time offers.  Rather, CRM is an important partner to real time offers with each process helping the other.

The ability to execute real time offers requires a combination of complex capabilities including data virtualization, eventing, decision frameworks and decision integration into business operations (e.g., website, mobile app, trigger email).  The process is highlighted in the figure below and more details can be found at How to Execute Real Time Decisions.

Entrigna Blog - Real Time Decisions Process

Role of CRM in Real Time Offers

As you can see from the process flow above, CRM plays two important roles with real time offers.

1) CRM provides an important source of information into the virtualized data store used for real time offers.  Data elements like customer profile, transaction history and contact history coupled with the "event" data can be powerful inputs into the decision frameworks (e.g., optimization, rules engine, complex event processing).

2) Real time customer engagement creates new data elements.  Each customer "event" with the associated "decision" and ultimately the customer response to the "decision" (e.g., did he or she review, discard or convert the offer) provide tremendous insight into the customer about what his or her interests are and what is motivating.

This data should be stored in CRM to enhance any other business process that consumes CRM data.  For example, the target list generation for email marketing campaigns can be greatly informed by the real time offer interaction history.  Of course as outlined in 1), this data should be passed along back into the virtualized data store to help improve the next real time offer decision.  This essentially creates a virtual cycle of improvement with marketing effectiveness.

Final Thoughts

CRM does not deliver real time offers nor is real time offers a replacement for CRM.  You can have one without the other but having both work together seamlessly can create tremendous value and synergy.

 

The Importance of Loyalty Programs to Retail Omnichannel

Retailers are playing catch up to consumers with omnichannel.  Many shoppers are already behaving in a seamless manner across channels either through webrooming (research online and buy in store), showrooming (research in store and buy online) or using their mobile device to do both while in store.  In other words, consumers are already embracing omnichannel.

Loyalty Programs Role in Omnichannel

For retailers, data limitations and technology complexities have slowed their ability to execute omnichannel.  The single biggest challenge to implementation is building a customer centric view that associates all activities of a shopper (e.g., transactions, web searches, store visits, mobile app usage).

The data simply doesn't exist for most retailers to build this customer centric view and the challenge remains how to "mark" the shopper as he or she interacts with them.  This goes beyond a customer just leaving a footprint.  It requires identifying the shopper while he or she is interacting with the retailer in real time in order to achieve optimal impact of omnichannel.

Although there is hype about potential new technology innovations, for the foreseeable future, the best answer to build this customer centric view is through a loyalty program.  The loyalty program provides the unique identifier to link customer activity to a shopper.

Design of Loyalty Programs for Omnichannel

In order to best deliver omnichannel, a new way of thinking about loyalty program design is required.  Traditionally, loyalty programs reward shoppers for transactions - e.g., "buy 5 and get 1 free".  The reward motivates shoppers to purchase more than he or she would have done otherwise.  This is the traditional "value of loyalty" business case for loyalty programs.

With omnichannel, loyalty program design must reward shoppers for identifying themselves while interacting with the retailer (e.g., "checking in" when entering a store, saving online research to your cart).   Essentially, the retailer puts the burden of data capture on the shopper but if the loyalty rewards are designed appropriately, he or she will do so willingly.

The business case for the omnichannel loyalty program design is built upon optimizing customer engagement in real time.  Because the retailer knows who the shopper is and his or her prior interactions, the retailer will improve closing sales leads (e.g., webrooming, showrooming), more effectively cross / upsell and entice new transactions.

It's worth noting that traditional loyalty program design can work synergistically with an omnichannel focused program.  In fact, if a traditional loyalty program exists, it accelerates implementation of the omnichannel component because core loyalty infrastructure already exists.

However, in either case, new capabilities, especially technology related, are needed to enable an omnichannel focused loyalty program (e.g., rewarding geo-location).  As an alternative to building proprietary technology, companies like Bckstgr provide these capabilities in a turn key fashion for retailers.

Once the loyalty program in place, the retailer has the platform to effectively execute omnichannel.  This coupled with real time customer engagement capabilities provides the retailer the ability to achieve the full benefits associated with omnichannel - that is, improve closing sales leads, more effectively cross / upsell and entice new transactions.