This article will discuss everything you need to know about implementing a retail customer relationship management software program in your retail store. We go over what it is, what it does, how to use it, and the benefits of having one for your store. Jumping right in first we will discuss exactly what a CRM software is for the retail industry.
Retail CRM software (or retail customer relationship management software) are computer programs used by retailers to improve the customer shopping experience, keep track of all customer interactions (from purchases to support requests), as well as for marketing or other activities that encourage return visitors and repeat purchases.
At the same time, a retail CRM helps provide customers with a seamless shopping experience with a store regardless of whether a consumer shops in-store, online, or elsewhere. A retail CRM also helps retail stores to bridge the gap between marketing and selling to new customers versus driving repeat business from past customers.
What a retail CRM software does is store customer and potential customer information for use by a retailer at a future date. This customer information can prove to be invaluable to a retailer, whether it is used to create custom experiences, custom marketing and promotions, tailored support, or simply to reward customers for their continued patronage of a store.
There are countless ways that a retail store can use a CRM software, whether to provide a better customer experience or drive more sales. Below are some of the most common ways that retailers use CRM software.
If you have the name, email, and birthday of a customer, you can send them a quick email wishing them a Happy Birthday and perhaps even offering them a 10% off birthday gift for shopping with you.
The same is true if all you have is a customer email, invite them to your online store or back in person to take advantage of a discount or promotion on their next purchase.
Customers love discounts, and stores love building relationships with their customers, and a retail CRM can automate this entire process. Oh and perhaps more importantly, it means repeat business and sales with little to no additional marketing spend.
Did your electronics store just get in the new QLED TVs featured at CES? Is your clothing store now stocked with the latest Summer fashions? Did your jewelry store just get in some beautiful jewelry ahead of Christmas? How can you let your customers know about new stock, if you do not have any way to contact them.
This is where a retail CRM comes in, when someone makes a purchase or otherwise engages with your business, your CRM can collect their info, and use this to drive awareness and sales of new merchandise. If your customers know new merchandise is on the shelves, that merchandise might just start flying off the shelves.
Retail CRM software can be used to implement loyalty programs for customers, or can simply be used to reward customers for their patronage. For example, a retail CRM can easily determine who your top 10 (or top 1000) customers were this year based on purchase frequency, amount spent, or other criteria, so that you can send them a gift for being a loyal customer.
These types of small rewards for patronage can go a long way in cementing your brand with loyal customers, and can prove more effective than just sending out random gifts or promotions.
Is a local author coming to your bookstore or comic store for a signing? Are you having a customer appreciation party to celebrate your 10 year anniversary? If you are having a special event at your store, the temptation might be to invite friends or family, but inviting loyal customers can not only result in sales the day of, but can increase brand loyalty in the future.
With some retailers experiencing 80% of their sales coming from repeat customers, this is a way you can use your CRM to drive more sales in the short and long term.
Have you ever gotten an unexpected package in December from a store you shop at often? Or even from a car dealer or real estate agent that contained a calendar for the following year?
If so, this usually means you are in their CRM and the seller is hoping you will hang the calendar somewhere in your home or office and by seeing it everyday, contact them if you ever go shopping, or need a new car or home.
If you store customer information (like home address) in your CRM, you are able to send them free gifts which hopefully improves their sentiment towards your business and keeps your store top of mind for the next time they shop.
Retailers often use the data in their CRM to create brand loyalty, with the goal of not just getting a sale today, but to continue to get sales from the customer in the future.
Many of us have seen the famous Spotify ads that highlight customers that have strange or extraordinary playlists. Where do you think Spotify gets that data? You guessed it, they have it stored in their CRM.
Now as a retailer you might not care what music your customers are listening to, but you do care what items they are purchasing, how much they spend on average, or what colors are most popular.
With the right CRM for retail stores, you can get this data from your POS or CRM and take action on it to help grow your sales.
In short, yes.
In the rare event that your store does not keep track of any customer information, we would strongly recommend you start. This is because you could be missing out on valuable interactions with, and sales from, your customers.
In the event that you do keep some customer information (like date of birth and email) so you can email customers a 10% off coupon on their birthday, you actually already have a retail CRM system in place, even if it is just paper-based or in excel.
A retail CRM software, digitizes the above system, and makes it easier to use, automated, and improve upon.
In short, to be successful your store needs to manage its relationship with customers in order to keep them happy and coming back. A retail customer relationship management (CRM) software gives you the tools you need to do that.
Now most of us have heard the old adage, that it is easier to keep a customer than to find a new one. However, this is more than just an expression thrown around by customer service teams - there is plenty of research and data that backs this up. Various studies have shown the cost of acquiring a new customer can fall anywhere in the range between 5 and 25 times more than retaining an existing one.
When it comes to retail stores building a relationship with your customers is perhaps even more important, as up to 80% of revenue at a retail store can come from repeat customers; and on average 30% of new retail store customers come from word of mouth.
Retailers can either choose a standalone software for their CRM, like Hubspot or Salesforce, or they can go with a point of sale (POS) system that is equipped with customer management functionality like Lightspeed or Shopify. Alternatively, they can also have a hybrid system which combines their POS and their CRM into one system.
The main difference between the two (POS VS CRM) is that a standalone CRM has all your customer data stored in one place, and makes communicating with customers (via email or phone) super simple. The drawback to a standalone CRM for retailers is that you have to import your sales and checkout data to get it into the system. On the other hand, a POS system has all your customer data as well as your sales data, but usually it cannot communicate (email) customers without a third party integration (like a MailChimp for emails).
The hybrid model where sales and checkout data from the POS is passed to the CRM software for communication is probably the best system, but we would not recommend this for most retailers as it can be very expensive to pay for two systems and to have to pay to integrate them.
Most definitely, yes, 100%.
Aside from the costs associated with a standalone CRM (which can reach $500 per month) and the costs associated with integrations for getting data collected offline (your store) into the retail CRM system, most retailers do not need all the additional features a standalone retail customer management system provides.
Using a retail point of sale (POS) as your CRM can cost as low as 10% of what you might pay for a standalone CRM, and often can be connected to free plans on SendGrid or MailChimp for customer communications.
On top of this, your retail POS stores all data pertaining to sales and returns already, so you can have everything in one place.
Since being able to communicate with your customers is the cornerstone of any CRM system, you need a retail CRM that can safely store customer information like name, phone, address, and email, for easy retrieval anytime you need to reach out to your customers.
More robust CRMs might also be able to store additional information like the best time to call, whether they prefer email, phone, text message, as well as keep track of contact frequency so that you do not annoy your customers by sending them too many communications (known as frequency capping).
An additional feature that is extremely useful for any retail CRM is the ability to quickly see customer purchase history. This allows store owners to visualize their best customers (and worse in terms of returns/complaints) in order to create special retail communication strategies for them.
If currently, as a store owner, you have no way of both identifying and communicating with your most loyal customers, you need to implement a CRM for your store today.
Whether a customer is making a purchase in your store, on your website, or calling to inquire about something over the phone, you need to be able to find them easily in your CRM database.
One feature that is handy is full boolean searching or the ability to find a customer by first name, address, email, phone, or any single piece of contact information. If your staff can locate a customer fast in the database, it means a happier customer and a happier cashier.
Nobody wants to not be able to redeem their promotion, or collect their loyalty rewards, or return an item, because they can not be found in the store database. Likewise, no cashier or customer wants to be in a game of maybe if I try your phone number, or email to locate the right person.
The easier users are to find in the database, the more effective you can reach them.
Once you have your customer information securely stored in a database, you need to be able to access it, segment it, and get valuable insights from it. This is where the reporting and list building features of your retail CRM will come in handy.
Simple data points can provide you with tons of data, for example if you track the last purchase date of your customers, you can calculate time since last purchase, average time between purchases, and much more. If you send out a promotional email your retail CRM system can tell you how many people received it, opened it, clicked, or made a purchase. This gives a conversion rate to tell you what promotions worked the best.
Once you have these data points, you can segment users into lists, for example frequent purchasers might be treated differently than 1 time shoppers, or people who ignore promotional emails might be excluded from receiving the next promo. Once you have built your lists, you can use them however you see fit.
Now that you have your lists built (see above) it is time to communicate with them. Whether you want to send out emails from your email provider, or whether you want to connect with the post office to send out physical mail, your retail CRM software can make this process easily through built in features or with simple (often free) integrations.
A more advanced feature of some retail CRM systems is that they allow you to post your promotions, new product arrivals, announcements, or other information to all your social channels with a few clicks of a button.
That means that when some new products come in, you can share across all your social media (Facebook, Instagram, Twitter, Pinterest) all from one centralized place. Worth noting, is that this more advanced feature is usually only included with a standalone CRM like Hubspot, and often is not offered if you choose to use a POS for your CRM.
Retail stores who have regular repeat purchases, like pet stores for monthly food orders, might want to store the payment information of their customer so that they do not have to provide their credit card for each and every purchase.
In the event that your store does decide to store customer payment information, you need to make sure that this is done in a very safe and encrypted way in order to prevent fraud. A retail CRM can help with this by securely storing data in a way that is compliant with the credit card companies and keeps you protected.
When you know what your customers like, you are better able to give them what they want. Whether this is tailored marketing, custom promotions, better support, or goodies on their birthdays, your CRM can help you deliver a more personalized experience for your customers.
On top of this, customers expect the same level of quality whether they shop online, instore, at different locations, or with any touch points they have with your business. Again your retail CRM not only allows you to do this, but to track it as well.
At the end of the day, retail businesses that manage their customers better, have happier customers.
Happier customers mean more customer loyalty as well. It is not your customers responsibility to remember how much they liked shopping at your store, it is your responsibility to remind them.
When you engage with your customers, you will see more and more repeat business, and with repeat business comes customer loyalty. Loyal customers are invaluable in the retail setting as they will shop with you because they want to and not because they need to.
More customer loyalty and more happy customers ultimately means more revenue for your business resulting from increased sales.
However, even for customers that do not shop with you on a regular basis, your retail CRM can drive additional revenue by notifying them of new product offerings, promotions, and more.
Lastly, the data tracked in a CRM for a retail store can provide you with countless insights as to what works best with your customers. If certain promotions get better email open rates, or certain social posts get more likes, or certain new products gain more traction, you can use this data to provide customers more of what they want and less of what they find uninteresting.
Any retailer will tell you, running the right promotion is hard. Should you be more aggressive on Black Friday or Cyber Monday? Do you discount your best sellers because you know it will drive volume, or your worst sellers to clear inventory? Do you offer all customers a discount or only a select few loyal customers on your mailing list?
With a CRM you can automate any or all of the above until you find the right promotional mix that drives the most sales. A CRM can send out emails for Black Friday or Cyber Monday, it can send promos to new customers, existing customers, or both. It can automatically send a birthday promotion on the birthday of a customer, and more.
With the right retail CRM system, you can set up your promotions once, and let them run by themselves until you are ready to optimize further.
Whether you choose a standalone retail CRM (like Hubspot or Salesforce), a robust retail POS system to manage your customers, or a hybrid of the two, a retail customer relationship management (CRM) software can help you grow and automate your customer touch points.
Doing so efficiently can increase sales and drive more revenue for your business, and is a must for retailers who want to continue to grow.