E-commerce for retail: Benefits of a CRM | BDC.ca

E-commerce for retail: The benefits of using a CRM system


Electronic Customer Relationship Management (eCRM) is becoming increasingly important to remain competitive. For retailers, there are many benefits:

  • Improve customer service and satisfaction through eCRM.
  • Personalize service, optimize marketing, and improve customer relations by co‑ordinating customer information for electronic, telephone, and store-based formats.
  • Reduce customer service costs through "self-service" features such as search functions and order delivery status.
  • Grow profitability by analyzing customer information to optimize marketing efforts.

Improve customer service and satisfaction through eCRM

eCRM generally includes an electronic sales platform—for some customers, sales is their only contact with the company—as well as gathers and co‑ordinates customer information.

Information can be used for several purposes:

  • Customer service: Whichever medium the customer uses, sales and service personnel can quickly identify the individual's essential background information such as location, recent purchases, account history, and payment status.
  • Self-service: Customers can access Web-based or telephone-based electronic systems  to track their own orders, identify the nearest store outlet, or find the answer to a question.
  • Customer analysis: Retailers use customer information and buying data to guide purchasing and marketing as well as to improve service efforts.

Personalize service, optimize marketing and improve customer relations

Electronic CRM solutions tie together multiple channels of communication, including live chat, telephone, e-mail, and Web-based frequently asked questions (FAQs).

The idea is that customers can choose the way they want to do business with you. In turn, you will always know who they are and whether they have just placed an order or made a complaint through another channel, even if it was just five minutes ago.

Remember, poor implementation can actually hurt you. Care must be taken in putting these systems in place:

  • Get some help. Hire good consultants in the field as it can be daunting to confront the number of vendors, claims, and variety of solutions in the marketplace. Your consultant should begin with an analysis of what you can spend and how you can expect to benefit at each stage of your implementation.
  • Gather only what you need. Customer information is plentiful but you can upset and lose people with too many questions. Zero in on what you need. For instance, postal codes can be very helpful with marketing, but how would the customer's age be of use? Keep in mind that your best return is on existing high-value customers. Identify them and treat them well.
  • Be selective about outsourcing. While it is a cost-saving option that's quick to implement limit it to high-volume customer interactions that are not core to your business.
  • Use only what you need, as you need it. Don't fall in love with technology for technology's sake. Analyze your customers and find out how they like to deal with you. Most companies start with telephone and e-mail, but find text chat less useful. Find out what's right for you.
  • Set standards for your system. Repeatedly measure performance against the standards. You may wish to have every call answered within three rings, every email acknowledged within four hours, and every Web page loading within 10 seconds. Check that you are saving more than you are spending on eCRM.

Reduce customer service costs

Customers who conduct their own product or information searches, or check their order status, get exactly what they want because they get it themselves.

  • Search engines: Site-specific search engines allow customers to search the online catalog by entering keywords or phrases.
  • Order status: Checking order delivery status is another way customers can help themselves. This service is simply a "front end" to your internal systems.

Other do-it-yourself options

  • A FAQ (Frequently Asked Questions) list—or a "Description" button for each listed product;
  • Customized display of product selection—when customers identify themselves or their industry, your site presents specially selected categories of products, information, and/or prices;
  • Location of other outlets—usually works by the customer entering his or her postal code;
  • Currency conversion, libraries, installation guides—anything that might better inform your customer about a purchase;
  • News or reviews from your industry;
  • Multi-language content.

Grow profitability: Analyze customer information to optimize marketing efforts

The philosophy behind eCRM is that some customers make you more money than others. It's not just a matter of how much they spend or are likely to spend. Profitability of a customer also depends on the amount of hand-holding and negotiating they require. The idea with both eCRM and CRM is to attract and retain highly profitable customers. By gathering and analyzing customer information, an e-strategy can help cut the cost of sales and cross-selling, thereby increasing revenues from lower-profit customers.

  • Identify typical characteristics of high-value customers—demographics, neighborhoods, product purchases, lifestyles—to guide marketing and customer service;
  • Anticipate customer needs: Initiate cross-selling by monitoring customer behaviour such as surfing patterns on your Web page, common purchase pairings, or service requests;
  • Reduce cost of sales by using customer profiles and histories at inbound call centres.

Remember, eCRM is about retention, conversion, and loyalty. Possession of customers' personal information is a privilege, therefore gather it selectively and use it wisely with these goals in mind.

Online sales

  • Increase sales opportunities and maximize revenues by creating a dynamic online catalog;
  • Increase sales through personalized interaction;
  • Lower cost of sales through self-serve options;
  • Gain new customers by offering your products over the Internet.

Increase sales opportunities and maximize revenues

Create an online catalog. It presents numerous benefits to the retailer:

  • Continuous updating with new products, models, pricing, descriptions, or offers;
  • No printing or mailing costs;
  • Short-term price promotions
  • Discounts for special customers—offered when the system identifies the customer at log-in, when the customer self-identifies, or  surpasses a threshold purchase level;
  • Cross-selling promotions and up-selling opportunities;
  • Search functions allow customers to find what they need: View products with certain characteristics (such as colour, style, model) or within a specified price range;
  • Inventory link allows customers to check availability and delivery timeline.

Increase sales through personalized interaction

Online sales provide the unique opportunity to automatically recognize customers and draw upon their purchase histories with your store.

As a result, you may reward, cross-sell, or up sell individual customers based on their profile, past purchase history, or present product interest. Examples of online sales promotions are:

  • frequent-shopper points;
  • discounts;
  • special promotions;
  • coupons;
  • free delivery past a particular sales threshold.

Lower cost of sales through self-serve options

One of the great allures of e-commerce is the prospect of reducing sales costs such as labour, paperwork, and merchandising costs.

Online transaction costs are lower in most industries, including retail. However, online customer acquisition costs are still higher than in bricks-and-mortar formats. If you wish to pursue e-commerce, it makes sense to steer existing customers to an online format as a means of providing a nucleus of activity to which you can gradually add new customers.

E-commerce with real-time credit card processing involves the following considerations:

  • An online catalog to integrate your inventory database—either custom-designed, created from an off-the-shelf template, or hosted at a "mall" site;
  • Order-processing software which is customized with product codes and prices;
  • Secure transaction processing: Verifies the customer and vendor while protecting the personal information of the customer; contacts credit card company for verification and authorization.
  • Order fulfillment.

Gain new customers: Offer your products over the Internet

For retailers who have an established bricks-and-mortar presence, the Internet offers an opportunity to gain new customers, particularly in other geographic regions where current marketing does not reach.

  • Getting started: Many e-commerce site templates exist, available off-the-shelf for prices ranging from a couple hundred dollars to ten thousand dollars and more. You can also find browser-based solutions, which allow you to create your online store at a host site.
  • Online catalogs: Customers log onto the site and browse the company catalog. They can review pricing (can be customized to specific users or currencies) place orders, or check the status of past orders.
  • Beyond sales: Many individuals still prefer to buy by telephone, mail, or fax than to complete the transaction on the Web. Leave it up to the customer. By all means offer online buying if it makes sense in your industry, but display your telephone number on every page and provide your mailing address under an "About Us" button.
  • Distinguish yourself: Keep them coming back by making a visit to your site a pleasant surprise, filled—with creative ideas:
    • Highlight a few hard-to-find products as well as your big sellers;
    • Conduct a contest or weekly poll;
    • Offer a free service on your site such as a calculator, guide, or library that's helpful to people in your industry;
    • Provide product reviews;
    • Make use of an internal company database.

Do everything you can to let new customers know you are a knowledgeable and valuable player in your industry.