Okay, a bit of clickbait on that title but I’ll try to describe a constant gripe that I have with my small business merchants that I deal with on a daily basis. As you may have noticed in my About section, I have over 25 years in the management consulting field, specifically around Customer Relationship Management (CRM and Master Data Management (MDM). I typically, assist large corporations in the deployment of programs that advance their customer experience objectives by helping them understand how to better interact via acquired data, programs and ultimately offerings that lead to greater customer retention and revenue. But enough about me…I want to provide some observation that is truly relevant during the current economic downturn.
Going Wide
On a daily basis we deal with merchants online and locally (brick-and-mortar) and while the interaction may be quick and painless, the lost opportunity for CRM by the merchant is critical. What did I mean about “Wide” in the title…simply this is the breadth of information the merchant is willing to capture about the customer. For example, I frequent my local hardware store – Do they know I live in the neighborhood, have they seen me before, am I a professional or just a DIY guy? By capturing some of these data points, perhaps they can begin to offer additional information like unannounced sales, workshops, or inform me of a network / community of similar shoppers. But Mike, how does a small business do this? I would suggest a feedback card, or request for simple contact information (don’t be intrusive, you want participation, a postal code and email may be enough at this point) and ideally what they may be interested in to personalize the communication. This would be the start to your CRM and MDM program at the foundational level. At a bare minimum, you now have a database of customers that you can reach out to virtually, that self volunteered to be a member of your community and will be “interested” in communication from you as long as relevant.
Going Deep
I mentioned above that I frequent a local hardware store and by frequent I mean at least once a week. Therefore, I have made the (personal) decision that this will be my go-to choice for hardware accessories and services, but I don’t believe my chosen merchant even knows this. Let’s say that I keep stopping in for painting, plumbing or lumber supplies. The next level of engagement by my merchant should be to go “Deep“…what project or specific activities are you working on, providing an additional level of detail about you? The merchant can now begin a level of personalization that is above and beyond their competitors. This could be accomplished by having a survey of no more than five questions that help to identify what interests their customer has. There is a phrase in CRM called “Know Your Customer” (KYC) and many are still struggling to perfect this, because it takes work, needs an objective and often is subject to resistance by the customer. If the merchant approaches the objective with I’m here to assist you versus, I’m here to sell you something…the customer will feel a bit more at ease and be more receptive to the effort. The benefits of KYC in small business are extremely positive, you can become their trusted advisor, partner and create a long-term relationship that survives turbulent times. Once this relationship has been built, expanding outside of the comfort zone can be profitable. For my hardware store example, if they analyzed their data, they would see that I typically do the same projects based on the season. Pushing information to me just prior to that season may make me more prone to visiting the store to procure my supplies for that season.
Engaged, thank you
I think the ultimate goal for many merchants would be the migration of on-demand transactions to a subscription service. I’m going to pick on my hardware store on last time. If they successfully accomplished the above levels of engagement, they may now pursue getting the customers to “sign-up” for subscription based components. This could be as simple as…Mike always buys furnace filters, of a particular size every four months, he also buys fertilizer every three months and we noticed a particular pattern in cleaning products. I hope you see where I’m going with this, if the merchant can put the customer on a subscription and ships, or tells the customer the product is ready for pick-up, they will now have a fully engaged customer for specific items and ensure repeat purchases.
I will cover each one of these areas in depth over time, but I believe you can see the value in CRM and MDM for all merchants and more importantly while these merchants struggle to keep their clientele during tough times.
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