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Retail CRM Strategy Examples That Go Beyond Loyalty Programs

By July 18, 2018 December 29th, 2020 CCG Retail Marketing Blog

There’s more than one way to build strong, profitable customer relationships. We share a few for you to consider.

If you think “loyalty program” or “software” when you hear the phrase “customer relationship management,” you’re not wrong. But, as you might also know, retail CRM encompasses much more, including not only customer relationship management, but also customer relationship marketing. It covers multiple strategies and tactics related to everything from communications and sales to customer service and operations. The one thing it all has in common? A central goal to help retailers build and strengthen customer relationships — and make those relationships more profitable.

Here, we share some essential insights on CRM. Then we showcase several examples of CRM retail strategy using different approaches to successfully retain customers and build those profitable long-term relationships.

Retail CRM Basics: A Quick Refresher

Sure, you know what CRM means. But perhaps you could use a straightforward definition to share with your CEO. Here you go:

CRM (noun) ­– At its core, CRM is a proven approach that helps companies attract, retain and maximize the value of customers through the collection, assimilation and application of customer knowledge. Essentially it is a strategic approach that helps retailers and other companies manage the customer relationship (or manage the trendier “customer experience”).

It involves managing all touchpoints between a retailer and its customers. CRM goals include, but aren’t limited to, acquiring, retaining and winning back customers; increasing profitability through pricing structure adjustments and promotional cost reduction; and improving sales through more effective inventory selection and merchandising. CRM encompasses frequent flyer, retention, lifecycle, attrition, membership and loyalty programs, as well as database marketing and customer service.

Retail CRM Strategy: Targeted Education

National pet supplies retailer Petco knows that providing valuable information is a proven way to build customer relationships. By providing a pet education center on its website, Petco positions itself as a helpful resource and gives customers a reason to keep visiting the site.

Petco wisely zeros in new pet parents with its educational material, capturing these key customers right at the start of their relationship with their pets — and just as they begin shopping for their new family member. The education center includes New Pet Guides, shopping checklists, articles, videos, coupons, a pet-selfie section and more. Everything is organized by pet species, giving the resource a personalized feel.

Retail CRM: Petco Education Center

Petco extends its CRM efforts with two key convenience features — a Repeat Delivery service and PetcoNow, offering two-hour delivery of online orders — and a customer loyalty program.

Retail CRM Strategy: Personalized Email Alerts

It doesn’t get much more personalized than letting customers create their own email triggers. That’s essentially what online floral delivery retailer ProFlowers has done. With a simple sign-up process, customers can use the company’s Reminder Service to identify special occasions that could call for flowers — and request an email alert when the event draws near.

Retail CRM: ProFlowers Reminder Service

The service allows customers to add multiple reminders, with each one including the event date, the relevant person’s name and relationship to the customer, and any special notes. When customers receive their email reminder, they can easily click directly through to shop for floral gifts on the ProFlowers website.

The company also uses detailed customer “portraits” to help segment audiences for targeted communications. This results in more relevant communications, which help improve response rates.

ProFlowers’ other retail CRM efforts include value-added content in the form of a blog covering a wide range of topics and a “Florapedia®” of floral facts and gift suggestions. In addition, as a convenience feature, they offer same-day delivery from local florists.

Retail CRM Strategy: Audience-Specific Perks

Most people know The Home Depot as a place to go for all sorts of home repair and improvement supplies — from light bulbs and tools to appliances, flooring, lumber and much more. But the retailer has also leveraged its area of expertise to create a customer relationship program geared toward home industry professionals.

The Home Depot Pro offers building trade professionals money-saving benefits, such as project-based pricing. And it offers time-saving convenience perks, like reserved parking, a dedicated checkout area, and call-ahead and online ordering with a two-hour pick-up promise.

Other retention-building features include purchase tracking, special credit options and access to an extended inventory not available in-store or online. The program even has dedicated account representatives who provide single-point contact, allowing for even more personalized service and assistance. In addition, the retailer has a professionals-only loyalty program, Pro Xtra, with additional benefits, discounts and rewards.

On the consumer side, The Home Depot extends this concept of catering to specific audiences through in-store workshops geared toward target consumer groups such as women and children. It extends its customer relationship building with informational online videos and blogs, as well as installation and repair services.

Retail CRM Strategy: Special Clubs

Grocery store customers cut across the board when it comes to demographics. So how can a grocer hone its CRM strategy to create the most relevance for different customer segments? Food City, a grocery chain with locations in Tennessee, Virginia and Kentucky, has an effective idea: Let customers self-select into clubs that reflect their interests, life stage or passion.

Food City offers four savings clubs that customers can join for free: Baby Club, Kids Club, Wellness Club and Pet Club. Each one offers unique benefits, such as coupons and other discounts, product trials, contests and events. The Wellness Club also offers value-added informational content, the Kids Club has product trials and the Pet Club even has its own web page.

Retail CRM: Food City Baby Club
Retail CRM: Food City Kids Club
Retail CRM: Food City Wellness Club
Retail CRM: Food City Pet Club

Like many other grocery stores today, Food City’s retail CRM strategy includes a card-based rewards program. In addition, they’ve embraced the trend to offer convenience features such as home delivery, curbside pickup and digital coupons. Customers can also download a free mobile app called Ibotta, which lets them link up their Food City ValuCard to access rebates and earn cashback on purchases at the store.

Retail CRM Strategy: Promote Your Mission

Increasingly, consumers — especially millennials and Gen Z — are drawn to retailers who stand for something. Using your company mission as a sort of rallying cry can help attract customers, while carrying through with actions that support the mission can help build the kind of faith that keeps customers sticking around. In fact, TOMS Shoes has built its entire business model around its mission — and reaped the monetary and philanthropic rewards.

The company was initially based on the simple premise that, for every pair of shoes purchased by a customer, TOMS would donate a new pair of shoes to a child in need. They tagged this philosophy “One for One®” and have, since 2006, donated more than 60 million pairs of shoes.

CRM: TOMS’ One for One Mission

The success of TOMS “shoe give” led it to expand into new product lines with related humanitarian efforts. This includes providing eye care with the purchase of eyewear; providing safe water with the purchase of coffee; and providing birth-related assistance with the purchase of bags. The company has successfully leveraged their mission to build a core base of enthusiastic customers — who have helped TOMS boom into a $400 million-plus company.

Bringing a mission or a cause into your retail CRM strategy doesn’t have to be as elaborate as the TOMS model. The idea is to revolve a portion of your marketing around whatever your company stands for — in a way that inspires your particular customer base and helps them identify with you on a personal level.

Retail CRM Strategy: Referrals and Advocacy

Sure, referral programs are first and foremast an acquisition strategy. But retailers with effective referral strategies have also reaped significant customer retention benefits. And why not? With an effective referral program, current customers get rewarded for every referral.

That in itself can encourage loyalty. Strategic rewards can do even more. Some of the most straightforward referral rewards are built around actions that bring customers back to your store or website. For instance, discounts on the referrer’s next purchase.

But rewards can be experiential, too. For instance, electric car maker Tesla has offered products (like wall connectors and wheels) to customers who make referrals. But they’ve also given referrers the opportunity to earn a tour of the company factory, score invites to exclusive parties and get the use of a Model S or Model X for a week.

Incremental rewards are another approach and provide an incentive for customers to continue referring new people — and, of course, remain a customer themselves. For instance, shaving accessory brand Harry’s gives referrers free shave cream with five referrals and a free premium razor with 25.

There’s another bonus to a well-planned referral program: It gives you additional opportunities to interact with your current customers — from requesting referrals to tracking them and sending rewards. These extra, more exclusive and personalized communications can make customers feel more valued, which again builds loyalty. And that leads to advocacy, more referrals — and more loyal customers.

Components of Retail CRM Success

For most organizations, a combination of retail CRM strategies will prove the best way to retain customers and build long-term loyalty. And, of course, it’s essential to build these initiatives on a strong customer service foundation and to offer the products and services your target customers truly want. Put it all together, and you’ll be well on your way to building customer relationships and your brand’s bottom line.

CCG has focused on helping our clients build stronger, more profitable customer relationships for more than 40 years. See an overview of our retail marketing services and solutions, including strategic customer initiatives, data tactics and technology support. To see how we can specifically help your organization meet its customer retention goals, contact one of our retail marketing consultants for a complimentary review: Complete our online contact form or call 303.986.3000 today.

Sandra Gudat

Author Sandra Gudat

Sandra Gudat is CCG’s president & CEO. Considered a pioneer in the field of customer marketing, she has a diverse background in consulting, database marketing, advertising, retail and business management. She is a frequent speaker on customer loyalty marketing and developing customer-centric policies

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