These retail CRM strategies can increase customer retention and guide your organization toward stronger, more profitable customer relationships.
- Retail CRM helps companies attract, retain and maximize the value of their customers
- Retail CRM strategies focus on managing all touchpoints between a retailer and its customers
- A well-managed CRM system integrates data to provide a complete picture of customers, campaign performance and trends
- Value-added content, personalization and audience specific perks are some examples of successful CRM strategies
- Retail CRM is the most efficient path to fostering customer loyalty
- Retail CRM software can help you grow and automate customer touchpoints
If you think “loyalty program” or “software” when you hear the phrase “customer relationship management,” or CRM, 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 essential insights on CRM for retail stores, including CRM retail strategies and CRM examples that use different approaches to successfully retain customers and build those profitable long-term relationships.
What is CRM in Retail?
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 and the overall customer experience.
CRM in retail 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 retention, lifecycle, attrition, membership and loyalty programs, as well as leveraging data to provide the best possible customer experience.
Retail CRM Strategies and Examples
CRM strategies in retail center around how you’ll acquire, sell to, re-engage and retain your customers. They’re the foundation of your businesses’ growth and profits — but getting them right can be tricky. Whether you’re launching a new in-store business or hoping to improve customer retention online, a strong retail CRM strategy is key to your success.
A great number of potential strategies tie into your CRM technology system or software. This is more than a repository of contact data and transactions. A well-featured CRM system, integrated with data from your POS system can provide a complete picture of your customers, sales benchmarks, marketing campaign performance and KPIs while predicting trends and providing a unified platform for customer service.
Below we share eight retail CRM strategies and corresponding CRM examples that are customer-centric in nature and focus on creating and growing stronger customer relationships.
Retail CRM Strategy and CRM Example #1: 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 on 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 and resource centers include new pet guides, care sheets, training tips, product guides and more. Everything is organized by pet species, giving the resource a personalized feel.
Petco extends its CRM efforts with convenience features like a Repeat Delivery service, pharmacy and a customer loyalty program.
Retail CRM Strategy and CRM Example #2: 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.
The service allows customers who set up accounts 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 strategies 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 and CRM Example #3: 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 bulk pricing and exclusive offers. And it offers time-saving convenience perks, like reserved parking, a dedicated checkout area, call-ahead and online ordering, and delivery direct to job sites.
Other retention-building features of this retail CRM strategy 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 customer segments through in-store workshops geared toward specific groups such as new homeowners and kids. It extends its customer relationship-building with informational online videos and blogs, as well as installation and repair services.
Retail partnerships like these allow brands to join forces to leverage their respective brick-and-mortar and digital presences, attract new shoppers, deepen customer loyalty and encourage store trips. Both partnerships feature employees trained to offer beauty consultations and recommend products.
Retail CRM Strategy and CRM Example #5: Loyalty and Rewards Programs
Loyalty programs are an important part of CRM in retail and among the easiest, most direct routes to fostering customer loyalty. Whether it’s reaching out with a special birthday treat or following up to check on a recent purchase, loyalty programs allow you to personalize and perfect the customer experience. And, by allowing your customers to accumulate loyalty points with every purchase, they’ll be more motivated to come back to you — and spend again.
Cosmetics retailer Sephora provides a good example of this retail CRM strategy with its Beauty Insider Rewards loyalty program. With more than 17 million members, the program rewards Sephora customers with tailored offers and discounts. The program is structured in three tiers, which means the more you spend, the better the rewards — and the greater the exclusivity. Sephora further nurtures customer loyalty and engagement with an online forum that encourages members to discuss products and share user-generated recommendations and advice.
How does your loyalty program stack up to the competition?
Spend five minutes with our interactive assessment tool to find out — and identify strengths and opportunities for improvement.
Retail CRM Strategy and CRM Example #6: 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.
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 and CRM Example #7: Personalize the Entire Purchase Process
Amazon’s retail CRM strategy is built around Prime, its premium subscription service that’s designed to personalize the entire purchase journey. Whether it’s sending you an offer for a product you were browsing, or encouraging you to revisit a forgotten shopping cart, Amazon successfully leverages its CRM strategy to retain customers by tailoring its offerings around individual consumers.
Retail CRM Strategy and CRM Example #8: Referrals and Advocacy
You know that referral programs are first and foremost 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.
Incremental rewards provide an incentive for customers to continue referring new people — and, of course, remain a customer themselves. For instance, shaving accessory brand Harry’s rewards referrers with a credit on their next order.
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.
Retail CRM Software and Tools
Retail CRM software, also known as retail customer relationship management software, are computer programs used by retailers to improve the customer shopping experience. These CRM technology tools can also keep track of all customer interactions — from purchases to support requests — as well as for marketing and other activities that encourage return visitors and repeat purchases.
The right retail CRM software and technology helps your organization provide customers with a seamless shopping experience regardless of whether a consumer shops in-store or online. A CRM system also helps retail stores bridge the gap between marketing and selling to new customers versus driving repeat business from current customers.
There are two primary types of CRM software:
- Standalone, like Hubspot or Salesforce
- POS system, like Shopify or Lightspeed
Whether you choose a standalone retail CRM, a retail POS system to manage your customers or a hybrid of the two, retail CRM software can help you grow and automate your customer touchpoints. And when done efficiently, this increases sales and drives more revenue for your business.
Retail CRM FAQs
As you can see, CRM involves multiple components, related to strategy, data, communications, sales and operations. Below we address five of the most frequently asked questions about retail CRM.
Q: What are the benefits of retail CRM?
A: When you embrace a CRM approach, it puts your company on track to becoming customer-centric, putting the customer first in both strategy and execution. Leveraging customer data and putting the customer at the center of your decision-making has been directly linked to significant growth and performance gains.
Q: What’s the difference between a retail CRM strategy and a retail CRM system?
A: CRM refers to both a strategy, and a type of software (or system) for enacting that strategy. While a strategy will guide your approach to your customer relationships, a CRM system will help you implement its full potential.
Q: How does a CRM system work in retail?
A: Retail CRM systems act as a central repository for information about your customers, providing multiple opportunities to engage and segment your audiences based on the information you have.
Q: How do you implement CRM in retail?
A: CRM for retail stores starts with identifying your needs and goals, assembling your team, selecting CRM software, outlining processes and strategies, and ensuring that you’re working with clean, quality data.
Q: How can a company fix CRM issues?
A: Common CRM issues result from organizations viewing CRM as a “set it and forget it” solution or failing to put the proper processes and tools in place. Having clear, measurable business objectives, focusing on the quality of your data, and periodically reviewing both your CRM strategy and CRM software are key to retail CRM success.
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 been helping retailers build stronger, more profitable customer relationships for more than 40 years. Our retail marketing services and solutions include strategic customer initiatives, data tactics and technology support. To see how we can specifically help your organization meet its CRM and customer retention goals, contact one of our retail marketing consultants for a complimentary review or call 303.986.3000 today.