Managing the customer relationship from the cloud
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According to a recent study, one in five companies wants to obtain its CRM system from the cloud as software as a service in future. That's not enough, says Berit Eigl, Director Customer Management at DEFACTO.
‘Data is the new oil’. You can't hear it anymore, but it's true. Customer data is the operating system of the company of the future. This applies to marketing and advertising, for example. The debate about the death of cookies has shown that there will be fewer and fewer opportunities to buy good data from potential customers in the long term. Instead, companies will have to build up their own data pools that can be used for advertising purposes. This also serves the age-old business truth that it is cheaper to convince existing customers to make further purchases than to acquire new customers.But what do companies do if they lack customer contact because they sell indirectly, for example? Ultimately, they are forced to use creative solutions to get in touch with customers. Creative solutions are tools on websites, such as a car manufacturer's configurator. The manufacturers (OEMs) have to perform a permanent balancing act here in order not to alienate their dealers. The spectre of direct to consumer is omnipresent in retail.
And it is a reality, as you can see from the example of Adidas. The Herzogenaurach-based company relies on the power of the brand and the sales power of modern marketing channels such as influencer marketing. And then they sell directly. Traditional sports retailers are no longer the primary focus, partly because they are unable to provide customer data.
Changing requirements for CRM
Around 75 per cent of the companies that took part in the CRM Report 2020 study already use a CRM (Customer Relationship Management) system. For the report, the management consultancy Böcker Ziemen from St. Augustin surveyed 278 companies of all sizes and from all sectors. Many of the companies even use two or three different CRM systems and a small proportion (11 per cent) manage customer data in Outlook or Excel.
The question of how the market for CRM systems is currently moving is an interesting one. The CRM report states that 64 per cent of companies that maintain a CRM system currently have no intention of changing. A quarter of companies want a new system. And a total of 20 per cent of all respondents see the future of CRM systems in the cloud.
Why is that the case? Primarily because the requirements for CRM have changed significantly in recent years. On the one hand, companies want to work with this data in a more agile way - especially in sales and marketing - and on the other hand, customers are demanding significantly more service and availability. Large tech companies such as Amazon are setting the standards here. For example, customers now expect to be able to digitally retrieve an invoice document online even months after a purchase, for example to complete their tax return.The changed CRM constellation can be summarised in five points:
- Need for direct customer relationship (1st party): This doesn't just apply to companies that sell directly, such as Adidas. Customer contact is also essential for FMCG giants such as Unilever in order to obtain valuable information about market developments, their own products and those of the competition.
- Increased customer needs: E-commerce customers are not the only ones who want a customer account in which they can track their most important contacts with a provider. This also applies to a landlord who needs the service charge statement for his property for billing purposes, sometimes years after the document was issued. In addition, customers expect 24/7 availability of standard information and services. Complaints about a product, ordering a replacement card for a mobile phone, making an appointment online. Of course, the provider does not have to cover this with staff around the clock. Online systems bridge the gap.
- Automation and self-service: And this bridge can be (partially) automated. This starts with the simple confirmation of receipt for a contact enquiry. In 2021, this will no longer be a job for the clerk. The forwarding of the customer's contact to the relevant departments within the company will also be realised automatically. And if a customer moves house, the good (online) CRM system offers them the option of recording this change of location in the system themselves. Out of their own interest. By the way: verifying the postcode when a customer changes address is also an automated micro-service.
- Centralised access to customer data: Böcker Ziemen's CRM report outlines that the centralisation of data storage is one of the biggest current requirements for companies in terms of digitalisation. On average, data is stored in two to three pots. This is counterproductive if the data is partially redundant, if it is inconsistent and if individual departments do not make their data available to other areas of the company at all and act as silos. From a customer perspective, it is a miserable experience if you have to explain the problem and the progress of the communication over and over again in service calls. In view of the abundance of customer touchpoints, there is no way around centralised data management. In digital advertising, there is already an extended approach to CRM, namely the CDP, the Customer Data Platform. It is not only able to address customers individually, but can also calculate clusters, cohorts or averages from the mass of data (and there is more and more), which are not only important operationally but also strategically.
- Connection to third-party systems: The idea of the CDP was born primarily with digital advertising campaigns in mind: ‘Send this discount campaign to all customers who have made a purchase totalling 100 euros or more in the last three weeks and who live in Baden-Württemberg’.The fulfilment of such a task also works with a CRM system. However, the CDP is built in such a way that you simply have to tick a few boxes and fill in values to start such a task. It is designed to synchronise its information with other systems.This could be a publisher's supply side system, for example, whose media can be used to reach part of the target group. But it could also be a weather database. And last but not least, important core data from the CRM or CDP system must also be passed on to other services, for example information on the availability of marketing consent for individual customers. But it can also be a number simpler: every customer today expects shipping information on an ordered parcel. Linking the CRM to the online tracking of DHL or Hermes is trivial, but an indispensable service.
CRM in the cloud?
The high and, above all, scalable availability, centralisation and connection to third-party systems suggest that cloud-based SaaS systems are also the better solution for the CRM segment. However, the CRM report also states that 45 per cent of all companies surveyed consider a solution developed in-house to be a competitive advantage.Regardless of whether this view may not correspond to the actual performance of the systems, it has a true core.
In practice, however, large CRM systems such as Salesforce or Hubspot are so powerful that only very few companies manage to utilise their full range of functions. The Marketing Tech Monitor 2021 assumes that an average of 20 per cent of the functionality is used.
This raises the question for entrepreneurs as to whether they should invest in staff training before having their IT programme additional functions. Both are correct and neither speaks against a cloud solution.
The key term is: individualised standard solution. Individualisation ensures software that is better adapted to the company and, in case of doubt, enables greater added value and therefore a competitive advantage. Standardised software ensures that the concentrated development power of large software companies can be used, as the software is constantly updated.
The widespread use of standard solutions also makes it easier to find trained personnel. And in case of doubt, it is easier to move away from such a solution than from an in-house development.
Eleven per cent of the companies surveyed by Böcker Ziemen are completely satisfied with their CRM software, but at the same time are absolutely willing to change. This apparent contradiction is quickly resolved when you consider the speed of development in recent years. Of course, it can happen that the signs in the market, at the customer or in your own company change so quickly that last year's good solution becomes today's ballast.
Or can your CRM system send newsletters to customers via WhatsApp? And before you ask: No, it's not forbidden. WhatsApp introduced a new solution for this on 1 July. It can happen that quickly.
