Customer relationship management (CRM) is more complex than ever as marketing channels allow for ever-more sophisticated targeting and content delivery.

So what are the challenges facing CRM marketers?

I spoke to a couple of people in the industry and here list a mere 10 challenges we discussed.

1. Too much data, not enough action? 

In 2015, Econsultancy's Measurement and Analytics report showed that 40% of executives found more than half of their collated analytics data was useful for decision-making.

That proportion of marketers dropped to 33% in the recent 2016 survey, due perhaps to an increase in complexity, particularly in advertising, with new technology hitting the market.

how much data do analysts use?

One other explanation could be that mid-tier organisations are getting more of their data in order, but haven't quite worked out what to do with it yet.

This seems to be the story when I speak to Ivan Mazour, CEO and founder of Ometria.

The company started out in data and analytics, combining data for clients to create a single customer view (from ecommerce purchase data, to website data, marketing data, offline data etc.).

However, Ometria changed direction a couple of years back, realising that when many of its customers got their data in order, they weren't entirely confident how to act on it.

In Ivan's words: "Just getting the data didn't solve any of their problems, they wanted to take the next step."

So, Ometria developed a cross-channel platform aiming to create unified customer communication journeys (through email, web, social) based on customer data, with a focus on retention and lifetime value.

This data-driven CRM retention strategy is what many brands are currently working towards.

2. Avoiding short termism

As any CRM expert will tell you, some customers are worth more than others, and that's something that has to be borne in mind when creating a contact strategy.

Jill Brittlebank, senior director of strategy and analytics at Zeta Interactive (a big data and analytics company) sums up the challenge of short termism:

"There can be a lot of focus on day-by-day trading metrics, so if trading's down, marketers might send a message or create a campaign, rather than asking themselves 'are we growing our overall customer value?'

"'Are we increasing frequency of purchase, basket size, certain category purchases, etc.?' These are the things that grow sustained performance.

"Yes, you have to keep the funnel fed, but understanding your acquisition - what is driving the highest value customers as well as highest volume - is really important.

"As attribution becomes more accessible to the mid tier, they understand better the value of each contact"

Brittlebank's comment on attribution echoes some findings from our Measurement and Analytics report, which shows the proportion of marketers who state that they are using an attribution model has risen by 16% in 2016.

attribution model usage

3. Bridging the gap between acquisition and retention

Acquisition strategies have become more complex, particularly when it comes to programmatic advertising, now available across major social channels.

Jill Brittlebank, Zeta Interactive, points out that there's a disconnect between acquisition and retention strategy, which mirrors the disconnect between sales and marketing in many organisations:

"Typically customers are most likely to buy when they first engage with your company, and that's when you know least about them.

"The challenge is to pull through the data from acquisition (cookie pools etc.) to influence growth and retention.

"Many companies are using DMPs and have the ability to be targeted at a prospect level; the next win is to bring that through into your customer marketing. 

"There's a break - you have really rich targeting, but then the slate is wiped clean once the customer lands." 

4. Behaviour-based personalisation

Targeting is becoming a much-debated topic in advertising and marketing.

Only recently, P&G admitted it had gone too broad with its Facebook advertising, and many creatives argue that the big idea trumps poorly created micro-segmented content.

There's another consideration when it comes to retail in particular, and that's the inadequacy of broad persona-based marketing - assumptions about a particular age or sex of customer are always going to be just that, assumptions.

Jill Brittlebank says that much of what companies need to do is "removing dissonance."

"As consumers," she continues, "we get less and less tolerant of irrelevant messages. Younger users particularly.

"So if I get a 'half term' style message when I've never shopped the kids category, I'm right to ask 'why?'

"If I've shopped at Ocado for years, for example, they should know enough about me by now, what I'm buying etc., then talk to me like Arkwright from Open All Hours. The ultimate goal is to recreate that old retailer relationship."

This difference between persona- and behaviour-based marketing is something Ivan Mazour, Ometria, sums up succintly:

"It doesn't matter if the customer is a 45-year-old woman based in Clapham, we should be making decisions based on the fact that she only ever buys men's clothing with us.

"Not random probabalistic hopes about what she wants, but actually knowing what she's looking at, how often she comes to the website, across all devices."

A Shutterfly email faux pas - wrongly assuming someone has given birth.

shutterfly

5. Optimising email content

Having decided to target customers based on their behaviours, the next question is what content to target them with and when.

Retailers must set rules - how many times does a customer need to look at a category or product before we send an email?

Mazour highlights two strategies for the content of these emails, either "templated around a category, which includes a browsed product, so it looks like it has been visually merchandised. Or a mix of categories."

This is the type of content optimisation that any company can employ, using "unsubscribe and conversion rates to create an optimisation routine."

The 'nudge'

The skill in content creation is subtletly, according to Jill Brittlebank.

She says its about maintaining "the thrill of discovery, like finding something in the boutique off the high street - the perception of value is higher."

"So the challenge," she adds, "is using technology as a predictive tool but also nudging customers towards the next product with subtlety, without saying 'look, you're going to buy this next'."

Brittlebank also points out how important content is in modern ecommerce:

"[Editorial such as] 'Ways to style', 'one dress three ways', 'daytime to evening', all that sort of stuff, it drives engagement. It doesn't necessarily drive the next purchase, but if the customer isn't in active purchase, you're looking to inspire them."

6. Optimising email frequency

More email, more money is an oft-heard mantra, and one we've discussed plenty on the Econsultancy blog.

Ivan Mazour, Ometria, is straightforward on the issue: "We agree with that. All research shows that over one email a day is optimum, assuming they're quality."

Of course, that doesn't mean that all retailers do this, and one contact frequency for all customers may not be desirable.

Hannah Stacey, marketing manager at Ometria, points at that companies "can segment on top of email - leave out VIPs from basket abandoment for example. Or leave some segments out from incentives."

Care is needed, particularly in some sectors. Mazour says that "the fallout for a luxury brand, for example, can be big when sales emails land after somebody has purchased."

Frequency is something that can be tied to a number of factors - purchase patterns and engagement.

Jill Brittlebank, Zeta Interactive, gives a very practical example:

"Look at groups of customers who only buy in the lead up to the holiday period at the end of the year.

"You could gently nudge these people to purchase something pre-summer holiday perhaps? But really you want to market to them during the time they traditionally purchase."

email frequency

7. Integrating social into a contact strategy

Mazour discusses the effectivenes of using first-party data to target lookalike audiences on social media.

However, email continues to be the main channel that customers want to interact with (more than 70% of consumers prefer email, accoring to an Ometria study).

But "if someone is not opening emails and you want to reactivate them, you can target them in social," Hannah Stacey comments, "then as soon as they start opening emails, you can switch that social targeting off."

8. Creating mobile experiences 

Mobile user experience is something that most people are now fully aware of when it comes to web and email design.

However, Jill Brittlebank points out the potential of mobile for rich customer insight.

That's because users are more likely to browse on mobile, and the functionality of the device (e.g. swiping) is something that could be utilised to greater effect, presenting users with experiences that can build out their profile for the retailer.

We've already seen retailers like Missguided integrate Tinder-style experiences into apps, but there's perhaps more to be done here, to engage users on mobile web, particularly those that arrive from email.

swipe to hype  swipe to hype

9. Getting hold of in-store data

This is the holy grail for retailers. Though a select few do have a fantastic view of stock across stores, customer data is another thing entirely.

Ivan Mazour comments that "most of the challenge is how do you get hold of in-store data. Anything with delivery works well (e.g. furniture) because you need to ask for details, or anything with a warranty (e.g. Jewellery).

"But it's difficult for low ticket items, even if it's as simple as asking for an email address for an e-receipt.

"It's hard to incentivise the store associate to get that email address. And it's hard to persuade the consumer, because the value exchange of an e-receipt is okay if you're Apple and selling tech, but not for a £15 purchase."

10. Integrating with legacy infrastructure

A last point to consider and another mentioned by Ivan Mazour - lots of existing retail systems update overnight (e.g. store systems).

However newer systems like CRM and ecommerce are closer to real-time, making the two harder to integrate.

This perhaps isn't a pressing concern but may ultimately affect some parts of customer experience (e.g. the speed at which retailers can offer click and collect).

In conclusion...

Companies are now much more data-driven, even fairly traditional retailers. The battle for boardroom approval is largely of the past.

But there's still plenty of work that organisations need to do to optimise sophisticated contact strategies, particularly as technology in areas such as retargeting is still advancing.

There are likely many more challenges to add to the 10 I have listed above. Please continue the conversation by adding a comment!

Ben Davis

Published 16 August, 2016 by Ben Davis @ Econsultancy

Ben Davis is Editor at Econsultancy. He lives in Manchester, England. You can contact him at ben.davis@econsultancy.com, follow at @herrhuld or connect via LinkedIn.

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