3 Practical Challenges Plaguing CRM

Li Zhiliang, Head of CRM, ZALORA Group

Li Zhiliang, Head of CRM, ZALORA Group

What according to you are some of the challenges plaguing CRM today and how can they be effectively mitigated?

CRM today has become confusing. Each organization seems to have their own focus, some on loyalty, and others on email marketing. One commonality is that most aim to build a CRM system that enables scalability and hyper-personalization while helping the organization grow. It is unclear as to how that can be achieved. Sometimes data scientists are thrown at the problem and expected to solve it. Sometimes analytics is deemed to be the cure. Sometimes performance marketing methods are used, giving repurchase or revenue targets to the marketers in CRM. Sometimes, it’s about ensuring strong adoption of the loyalty program.

With the rise of e-commerce, it has become very common for teams to have more short-term goals and outcomes being demanded of them. Digital advertising is highly leveraged upon to bring new customers to the website or app to make their first order. It then falls to the “organic channels” or direct channels such as CRM (aka Emails, Push Notifications etc) to get these people to purchase again. If done well, it works, albeit with limitations. Such siloed optimization potentially becomes a bane to the long-term success of CRM.

Let’s study 3 such challenges plaguing CRM today.

1. Focus and Balance for the CRM Team

Many CRM teams are given the responsibility of targets that seemingly reflect success. Chasing revenue targets or an arbitrary active user target results in short-term success. A team could be expected to maximize revenue, and thus send the most emails and push notifications possible to maximize conversion probability. This prevents the CRM team from focusing on the long-term relationship with the customer.

Don’t expect the CRM team to convert a one-time customer into a loyal one only with their emails or push notifications. Have them work across teams to ensure the acquisition and retention of high quality customers. Split success up into multiple parts, some focused on maximizing conversions such as from cart abandonment campaigns or promotions, others in proving the actual value to the customer such as the impact on customer lifetime value.

Focus on consistently challenging the existing assumptions or tools. Before influenced opens were more widely tracked on push notifications, CRM had difficulty realizing the impact they had through push notifications.

A front runner would seek to understand and develop such learning early.

CRM needs to focus on people both internally and externally. It is easy to only look at open and click rates, but it is hard to understand what customers really think about an email and what makes it amazing for them. People and talent are key to addressing this.

2. People and Talent - Breadth and Depth

E-commerce and CRM’s place in it has been growing rapidly in the region. The talent has been largely home-grown, with many organizations having to train up their own teams. As most of them lack sufficient prior experience, it creates a significant challenge. A period of at least 3 – 5 years is needed for one to gain sufficient depth in CRM. Here are some ways to support this growth:

Embrace failures to empower CRM teams to learn faster. Don’t contradict it by imposing hardline revenue or engagement targets. Expect them to deliver an improvement to their relationship with the customer and hold it to them to prove it. Grow them by challenging the deficiencies. A team fully focused on analytics might prove how sending 10 push notifications a day maximizes retention. This can be challenged by having them talk to actual customers and see which customers actually like it and why.

Allow CRM teams to care for the customer beyond their “channels”. If the team is trained to think in a way that only influences their own communications, it greatly limits the impact they would make. A harmonious journey across touchpoints is essential to building strong customer relationships. Experiment involving CRM teams in the creation of your digital media, and see how that influences your onboarding journey.

Equip the CRM team to have a strong depth of understanding from the technical bits to the creative bits. A strong cart abandonment campaign can’t be created without a good understanding of where the data is flowing from. By understanding how data is collected and processed, it improves the quality of engagement between the CRM team and the engineers supporting them. Likewise, the campaign won’t fly if it is not visually appealing. By having a diverse pool of talent that can challenge each other, communications with the customer become more effective. Analytics, process efficacy, programming skills are all tools that can greatly benefit the way a CRM team functions.

3. Constant Evolution of Tools

New mediums and tools are constantly surfacing, and it is difficult to try and use them all. When do you decide when to use Machine Learning? Voice? Chat?

Let your stack have flexible elements to allow for rapid experimentation. There are many plug and play solutions, albeit to various degrees of perfection. Don’t aim to perfectly de-duplicate your app push notifications and browser notifications for your mobile customers from the get-go. It is much easier to test its viability first before committing to a larger development.

Ensure that the setup allows for scalability and reduction in maintenance. Building new campaigns or tools over time causes many layers to stack up. This creates more legacy campaigns that consist of manual workarounds and inefficiencies. Any effort to create substantial change would then incur huge time investments. For example, a frequency cap for your emails could be implemented individually on each campaign relatively quickly when you only have 10 campaigns. However when the campaigns double, so will the effort required. Start early and invest the time to rebuild pieces that pose a future maintenance problem.

In summary

Personally having been part of the transformation of CRM at ZALORA, I feel that there is huge potential for CRM to become a partner to both the customer and the organization. I believe that this is possible through the right blend of focus, empathy, technology and purpose.