Five steps to a better class of clientelling

Transcription

1 Five steps to a better class of clientelling How building closer customer relationships boosts the bottom line Expedite & Fresca Multichannel Retail Specialists

2 Executive summary What is clientelling and why is it important? Clientelling is the discipline of building closer relationships with your customers resulting in incremental margin on your bottom line. It has two positive impacts: increased customer satisfaction and, by blueprinting the best practice of your top sales associates so that others can emulate their success, improved productivity. All of this results in better customer affinity with your brand, increased spending patterns and customer referral. At the same time, sales associate buy-in of a clientelling programme increases dramatically as they come to understand how customer data can be used to increase their commission/bonus/revenue takings. And this means that they are more willing and able to capture customer information for your business to use. So, what is the secret to successful clientelling? There are 5 key steps: 1. Agree who to target, and how to develop that relationship 2. Identify KPIs and associated reporting to measure improvements 3. Provide the tools and processes to enable successful clientelling 4. Develop a reward and recognise programme for sales associates 5. Establish a roadmap and company vision for clientelling Let s consider each of these in more detail...

3 1. Agree who to target, and how to develop that relationship The Pareto rule is well known in CRM approximately 80 per cent of spend is accounted for by 20 per cent of the customer base. In clientelling it s no different: focusing on that top tier of customers to provide better service to them will most often achieve your greatest return. The first step is to segment your customer base into appropriate tiers: say VIP, Top, Middle, Bottom customers. These segments should be based on a combination of overall spend, visits and cross-shopping behaviour (which departments they shopped in). Factors such as recency (when the customer last purchased) and ATV (transactional spend) can also be considered when you are looking at developing programmes for each of these segments. Alternatively, you can simply segment on spend to begin with. Typically, clientelling begins with managing the VIPs possibly your top 20 per cent but more likely your top 2 per cent. However, we have also known retailers to launch a clientelling programme across the retail enterprise for all sales associates to benefit from immediately. In any case it is highly recommended that clientelling champions are identified to provide feedback on the tiering, programme and tool you are using in the early stages of launch. A pilot is always recommended. Let s assume that you are looking to execute the clientelling initiative for each of the following four customer segments: 1) VIP customers 2) A sample of top customers 3) A sample of new customers with high value purchases, not unlike the VIPs 4) Influencers This will enable you to measure how well you can impact very loyal customers (VIPs), loyal customers (Top customer sample) and look-alikes (New customer sample). We also suggest that you cherry pick a few customers that are very important to your business as a fourth customer group called Influencers: this could be based on their peer influence in Facebook to your business; that the customer is a celebrity and has a halo influence in the market; that the customer is the editor of a highly-regarded fashion magazine, again, with influential bias; or that the customer is your Chief Financial Officer or Company Owner, who should be bowled over by your clientelling efforts. You should ensure that your Customer Database is able to have these customers coded in the four groups and automatically upgrade or downgrade people based on their activity or status. This will allow your team to always focus on the right group. 1

4 How to develop the customers The How is the most interesting part of clientelling and each retailer can not only choose different approaches, but even execute the same approach in completely different ways. The key here is Keeping it Simple for the sales associates. The How should be intuitive, a blueprint of what the very top sales associates do for their black book business, and most definitely measurable. So, some examples of the How could be: Calling List Management, with automated calling lists for your sales associates to manage each week. These can be organised based on: Customer purchase activity A calling list built around customer retention (top customers who are not as active as they have normally been); or a follow up courtesy call based on their satisfaction with the last purchase; or a calling list triggered by new arrivals of merchandise that we know the customer is interested in, based on past purchase activity or merchandise preferences. Customer services Soft selling on the back of a customer complaint; follow up on a service (such as an alteration or delivery) Company event A list of customers who are interested in particular in-store or online events and can be personally invited to that event, or made aware of it Customer profile Calls for those with birthdays coming up (or whose children have birthdays); a thank you call for the anniversary of the customer first joining your loyalty programme Contact management Calls that are strictly based on the individual contact that the sales associate has with a customer. This should include tracking those calls and setting task actions where appropriate such as a trigger to make a follow up call several weeks later. See image 1 below. Image 1: Managing customer contact 2

5 Customer performance management. Dashboards that clearly identify for the sales associate how their business (black book) is performing. So, visual reports that indicate immediately whether their customer base as a total has spent more this season this year versus this season last year; and their year to date results. The KPIs as listed in the next section should be clearly visible to the sales associate so that they can understand how well their black book is developing (or not). Training. The importance of training when the Clientelling Programme is launched, when new sales associates join the programme, as well as refresher courses, should never be underestimated. Whether it s extremely sophisticated or relatively simple, training needs to do the job to enable sales associates to participate in the Clientelling Programme and believe in what the company is trying to do. If you don t convince the sales associate of its benefits and importance, then the Clientelling Programme will be well on a course to failing. Training should cover: benefits to the customer, sales associate and company a quote from your CEO company objectives for clientelling this year and the vision the 1,2,3 of clientelling getting started enhanced clientelling how to get better when to perform clientelling throughout the customer journey and clientelling touchpoints Training should be linked to learning dashboards, if possible, so that sales associates and head office can manage their CRM training achievements (eg has read the training document and completed the quiz ) as with any other Store training. 3

6 2. Identify KPIs and associated reporting to measure improvements Key performance indicators (KPIs) must be identified to allow the company to measure improvement. Typically KPIs are based around: Customer behaviour ATV (average transactional value); ACV (average customer value); AXS (average cross-shopping, ie number of departments shopped); AUT (average units per transaction); ACT (average number of customer transactions or visits); and ACR (average customer recency, ie number of weeks since last purchased). These KPI examples should be easily visible to your associates on their dashboard Customer comparison new customers to the black book versus existing customers; number of channels a customer shops in; returns % per customer; margin per customer Sales associates compliance of data capture (how many new customers captured, how many customers captured against transactions that the sales associate rang up, what information was captured, and how accurate that information is); ranking of the sales associate on a data compliance leadership board (ranked company-wide, by region or store and often linked to data capture compliance targets); number of clientelling customers being developed and overall improvement in purchase behaviour of that group (or not) Task completion reports that show how complete sales associate clientelling tasks are (eg calling lists 80 per cent complete with 20 per cent outstanding and 1 week old, 2 weeks old, etc) and the impact completed tasks have had on the customer s purchase behaviour and KPIs. 4

7 3. Provide the tools and processes to enable successful clientelling So, now that you know who to develop, how to develop and what to measure, how do you actually go about making it happen? Clientelling tools can be as simple or sophisticated as you need them to be. At a very basic level, you need a Customer Database that is the repository for all customer information: purchases from all the channels, customer segments and attributes, profile and address information, contacts and non-purchase behaviour such as survey responses, relevant social network participation, etc. Then as a first step, head office can provide automated calling list reports and KPI reports as a weekly, monthly, quarterly and annual snapshot to support the sales associates. In this scenario, sales associates often have their own, hard copy black book to manage their customer contacts and relationships.they typically take copies of transactions and staple these to their black book. Clientelling in this scenario is very manual but with automated reports and calling lists can become much more effective very quickly. The next step involves the POS device at the store accessing the Customer Database to provide real-time access to the sales associates for customer management. Today, however, more and more retailers are looking for immediate, up-to-date access to multichannel customer data in a mobile way. They want to be liberated from the POS and have access to a sophisticated digital version of the black book. In this way, sales associates can discuss customer preferences throughout the customer journey in the store or online and, critically, the customer information is no longer held in a physical black book that can walk out of the store if a sales associate leaves the company. It is not uncommon to hear from higher-end retailers of a sales associate defecting to a competing company and taking several million pounds worth of black book at the same time. At this level, the company must realise that the relationship is with the sales associate and not the company so digitising the black book allows the company better management over such a situation. The key tool then is a mobile device with direct access to the live multichannel Customer Database. Typical devices for clientelling are tablets and ipads. 5

8 The device could provide access to any of the following: customer profile data, customer wardrobe, transactional history, customer contacts, summarised buying behaviour, event participation, notes for associates to add comments, key customer attributes, campaigns the customer received, and social CRM information such as customer feedback in an online survey, Facebook activity with your brand, referrals and of course, loyalty points, history and balance should you have a loyalty scheme. See Image 2 for an example of a mobile black book device showing the wardrobe information on the customer based on the purchase history. Image 2: Customer wardrobe information Any tool like this should be clearly tied into Assisted Selling with links to the company Look Book, customer wishlist on the website, store e-learning, e-commerce site and, if possible, mobile POS for customer identification during a mobile transaction at the store. Processes at head office to support store clientelling are also key, including: system processes automated reports for calling lists, management of sales associate customer ownership, management of customer segmentation for clientelling work processes incorporating sales associate feedback on tool enhancements, adding new data types on the customer, programming new KPI reports, clientelling communications plan, reward and recognise process data processes data hygiene (customer de-duplication management, address cleansing and opt-in/out management). Interestingly, data processes although the least exciting often have the highest negative impact on a brand among the best customers if not done properly. The loss of one top customer due to bad data integrity (misuse or lack of de-duplication routines) could cost the business 25 times the loss of one average customer. So, data integrity for clientelling is paramount. And data protection is also critical in today s market. Sensitive information must not be readily available to any associate on the floor (and in some cases not available to the store at all). 6

9 4. Develop a reward and recognise programme for sales associates This is such a simple concept: retailers that introduce a reward and recognise programme for sales associate data capture have data capture statistics up to three times better than retailers that don t. Capturing customer data against a transaction (critical for customer insight and clientelling) runs between 30 per cent and 95 per cent among our retailer clients. The retailers with a higher data capture have strong incentives in place for the sales associates linked to job description, performance, bonus, and/or rewards. The reward and recognise programme should also take into consideration sales associates who achieve their clientelling tasks and who have had a significant impact on the health of the business at their store due to their proactive management of the customers and use of their clientelling tool. It is amazing how quickly sales associates catch the bug when they see colleagues not just benefiting from the tool because of commission, but also from other bonuses and benefits that they receive, such as a bottle of champagne, a supplier or partner freebie or a lifestyle gift (spa, weekend away, dinner for two). Simple recognition done right, in conjunction with rewards, will often be the icing on the cake. A thank-you from the CEO and company-wide recognition that you are the top sales associate in your area will often result in increased loyalty of your sales associates to your brand and a culture that reverberates down through the sales associates that clientelling results in personal success. Note: retailers deal with leadership boards and competition amongst the sales associates in different ways. Some like to produce a leadership board with clientelling competitions (who has the most high value black book, most recent book, biggest book, book with the largest ATVs), however this is not always productive or in the interest of the client. It can affect team co-operation with VIPs (which can result in negative customer experience) and so such an approach would need to be managed carefully. Image 3: Reward & Recognise Programme Establish programme Programme objectives Programme benefits to customer, associates, company Operational methods (e.g. Data capture approach) Communication methods Reward approach, levels and distribution Agree KPIs examples Customer identification and data capture at the store Customer contacts and development Store and regional targets Comparisons monthly, seasonally and annually Communicate KPIs & results Store and regional results Publish leadership boards stating: top leaders, new entrants, most improved Winners, runner ups Advertise the rewards! And state what next month s rewards are Processes & technology Ensure data capture and clientelling training is in place and available Establish a funnel for associate feedback on the programme, KPIs, rewards Identify associate champions who are advocates, will field questions from the stores and are the poster child of success Agree technology and KPI methods of measurement that are consistent, able to identify abusers of the system, and are fair to all when the rewards are calculated Publish improvements to data capture and customer insight within the business to increase visibility of success 7

10 5. Establish a roadmap and company vision for clientelling You must involve your top sales associates with your clientelling plans explain what the phases are and how each phase benefits them. So, for example Phase 1 may be the creation of a multichannel customer database, Phase 2 introduces calling list reports and Phase 3 is a mobile and digital black book for their personal use. Ensure the sales associates appreciate that feedback from them can inform future phases so their participation is key to the roadmap s success. The roadmap should indicate needs assessment, technology, training, integration, communication plans, delivery dates of the phases and most importantly, ownership. Who is the sponsor of this initiative and who is the person or team delivering it? In this way, colleagues can ask the right team a question, and get a correct answer immediately. How clientelling supports your brand values The vision should be engaging and sell the advantages to the sales associates so that they understand how this helps them and, critically, how clientelling can provide better service to customers. For example the vision could be to indulge your customers with the most innovative, personal and luxurious shopping experience of your retail sector. While the clientelling strategy would be to provide compelling information and leading edge tools to your sales associates and customers which delight them both and result in measurably enhanced brand advocacy and loyalty. Below is an example Clientelling Roadmap. Clientelling (Step 3) Investigate clientelling requirements & data points Ensure multichannel technology provides roadmap for clientelling Establish reward & recognise programme Clientelling programme & tool implementation Launch: clientelling Customer data access (step 2) Agree priority access points Integration Launch: real-time customer data access Multichannel customer respository (step 1) Establish multichannel requirements & cust data repositories Investigate & agree technology approach Project plan & implementation Launch : multichannel customer repository Q1 Yr 1 Q2 Yr 1 Q3 Yr 1 Q4 Yr 1 Q1 Yr 2 Q2 Yr 2 Q3 Yr 3 Milestone for multichannel customer repository (step 1) Milestone for customer real-time data access (step 2) Milestone for clientelling (step 3) 8 In conclusion, the vision is about your brand, your people, your customers and how your clientelling programme and technology play a part in delivering a consistent experience to the customer an experience that raises the benchmark above your competitors and drives incremental margin.

11 About BT Expedite BT Expedite is the retail solutions division of BT we have a fanatical focus on retail, providing multichannel solutions to more than 60 of Europe s leading retailers. Our solution set spans every area of retailing; planning, sourcing, merchandising, store solutions, sales analytics and CRM, plus network infrastructure, hardware, training and professional service expertise. Our one-stop shop, single contract approach takes the strain and complexity out of delivering the infrastructure you need to drive your business forward and enables you to focus on the competitive differentiators that make the difference to you and your customers. CRM and Loyalty for retailers Developing a 360-degree customer-centric view requires real purchase detail from all of your selling channels and is an important first step to understanding your customer. With this knowledge, you can swiftly and easily develop campaigns that show measurable results through the use of control groups, and clearly demonstrate the ROI of your CRM approach. The key to success is choosing a CRM solution designed for retail. Only retail-hardened CRM can track all the valuable data intrinsic to your retail business, for example: category and style of merchandise colour, size and other dimensions customer margin by merchandise category the sales assistant or call centre agent who made the sale seasonality/trends web, catalogue, call centre sales and store sales above and below the line campaign tracking impact of markdown, discount, sale periods on customer activity a customer s return history what else was bought in the same transaction or around that time real-time reporting and dashboards with KPI comparatives. By having this central data to hand, retailers can focus on retention, reactivation, cross-selling and opportunity selling, which translates to the customer basics of: keep them coming; have them coming more often; interest them in more items per visit; and compel them to spread the word so that more people are converted and in turn become profitable brand advocates. Equally as important is the customer interaction at the point of service; whether that s in your store, on your website or over the phone, or on your social network site. Our retail CRM solution is designed to work on mobile hand-held devices, EPoS, kiosks and through web services available to your web, store or call centre sites. So you can ensure your sales associates/agents and your website capture customer preferences and use relevant CRM information to enhance your customer s transaction, either in value or service, and build a foundation for repeat business.

12 About the author Tanya Bowen has worked with more than 75 retailers in the UK and North America over the past 17 years, focusing on CRM return on investment and customer appreciation. Today Tanya spends much of her time working with retailers to develop tailored and overarching CRM programmes that mirror each retailer s business strategy. Retail-specific CRM technology is a critical first step to ensuring early and consistent CRM programme success. However, Tanya and her team are strong advocates of people skills and believe no amount of technology can substitute for a solid CRM programme and the desire to execute it whether you are the CEO, a sales associate at the store, or an e-commerce marketing manager. If you would like to discuss CRM strategies with Tanya, please tanya.bowen@bt.com. For more information about BT Expedite services visit or call Offices worldwide The telecommunications services described in this publication are subject to availability and may be modified from time to time. Services and equipment are provided subject to British Telecommunications plc s respective standard conditions of contract. Nothing in this publication forms any part of any contract. British Telecommunications plc Registered office: 81 Newgate Street, London EC1A 7AJ Registered in England No: Produced by BT Group Designed by Westhill.co.uk Printed in England by Communisis PHME 62202