Krezova Anastasia «Features of CRM in HORECA»

HoReCa is one of the largest segments of the service sector, which includes in itself a hospitality and catering industry (restaurants, cafes, catering), which has its own unique features. That is why it is very important to develop a CRM in this direction, since it is in HoReCa that the client, his relationship with the company, buying behavior and emotional reaction play a significant role. The main goal of each restaurant, hotel and cafe (including services such as Delivery Club) — multiple return of the client. Secondary — the growth of the cost of the requested service and the expansion of the customer base.

All these aspects are applied in companies which develop their relationships with customers and counterparties. Thanks to the established CRM, hotel administrators know that a certain regular guest is a vegetarian, and another needs to have more towels in the room, hence, there is emphasis on personalization. Each major chain has loyalty cards that not only provide a customer base for future use, but also provide guests with bonuses that encourage them to return to the same chain.

In restaurants, a human factor plays an essential role in a relationship management with guests thus the work of the staff constantly needs to be improved. For example, reviews — both offline and online (including leveling of the negative comments) allow you to understand the weaknesses and strengths in the work of the staff, which shows where an improvement has to be done in order to improve customer satisfaction[1]. Nevertheless, it is an extremely rare case to personalize an offer to the client. It’s easier for large aggregators of food delivery because of the work online: there is a possibility of making personalized offers, SMS and email newsletters. At the same time, it is important to remain unobtrusive, as many recent studies have focused on the fact that customers (mostly Millennials) can have an aggressive reaction to such a personalized offer, by worrying about preservation of their personal data[2].

Therefore, the main feature of HoReCa in CRM is the emphasis not on quantity, but on quality, that is, more attention is paid to personalization, emotional impact and the human factor. At the same time, it is important to maintain a balance and not to forget about a non-intrusiveness protection.


Sources:

[1]Lei S., Law R. Content Analysis of Tripadvisor Reviews on Restaurants: A Case Study of Macau //Journal of tourism.– 2015. – Т. 16. – №. 1.

[2]Nyheim P. et al. Predictors of avoidance towards personalization of restaurant smartphone advertising: A study from the Millennials’ perspective //Journal of Hospitality and Tourism Technology. – 2015. – Т. 6. – №. 2. – С. 145-159.

Dyakonova Aleksandra «Satisfaction and client loyalty in communication with company’s KPI»

If you improve customer satisfaction and loyalty and do not use KPI, then you are not doing it. According to the Global State of Multichannel Customer Service Report:62 percent of global consumers have stopped doing business with a brand or organization due to a poor customer service experience and 97 percent of global consumers claim customer service is either very or somewhat important in their choice of and loyalty to a brand[1].

Therefore, we must understand customer satisfaction and loyalty. Experts offer more than 20 types of indicators, but we will focus on 5.

1. Net Promoter Score (NPS). NPS measures whether current or former customers will recommend your products or services to others.

2. Customer Satisfaction (CSAT). The most popular KPI for measuring customer satisfaction is CSAT. You can evaluate their satisfaction with your business, product, or services. Your rating is the average of all customer responses. Your scale may consist of regular numbers, stars, emoticons, etc.

3. Customer Retention Rate (CRR). According to RJmetrics, the most regular customers receive more than half of their income from regular customers. CRR shows what percentage of your customers stayed with you for a certain period of time. 

4. SERVQUAL. Method for measuring subjective elements of quality of service. Evaluation from customers compared to expectations. 5 elements of quality of service: Reliability, Assurance,Tangibles,Empathy,Responsiveness[2].

5. Customer Effort Score (CES). CES measures how much work customers have to do through an interaction with the brand. CES helps companies determine customer friction points and find ways to create a more seamless experience.

It is important not only to determine the KPI and correctly establish the causes and effects of the impact on financial performance. In case from Stanford professors the managers of fast food restaurants believed that the low turnover of all personnel affects customer satisfaction and company profitability. But after collecting the data, it turned out that satisfaction is not affected by all the staff, but only by restaurant managers and it is important to keep them[3].


Sources:

[1]https://www.leightoninteractive.com/blog/5-marketing-kpis-to-measure-customer-satisfaction

[2]https://www.userlike.com/en/blog/customer-service-kpi

[3]https://hbr.org/2012/10/the-true-measures-of-success

Nurdinova Ajshat «Customer value creation and Customer experience management»

The concept of experience and – notably – customer experience has become increasingly popular in the recent couple of decades. In one of the pioneering works on the topic called “Welcome to the Experience Economy” J. Pine and J. Gilmore argue that while products – and even services – are becoming commoditized and thus could be easily copied, the role of the experience increases [5]. Hence, creating meaningful and seamless experiences for customers is a source of a stronger differentiation, loyalty and higher revenues for companies. 

Gartner describes Customer Experience management as “the practice of designing and reacting to customer interactions to meet or exceed their expectations, leading to greater customer satisfaction, loyalty and advocacy” [3]. Customer experience is often visualized and managed with the help of Customer Journey Maps; it also focuses more on a qualitative research and “experiential” data, trying to capture customers’ feelings, emotions and inner motivations. 

Customer experience management strategy can be presented as consisted of 7 main stages [1]:

  1. Assessment of needs and customer segmentation – the CEM starts from analyzing customers needs and motivations, their expectations from interaction with the company. Further, they should be segmented based on their behavior / needs / etc. 
  2. Customer Journey Mapping – at this stage it is very important to look closely at identified segments and create a unique CJM for each of them: different segments may have different journeys and pain points. 
  3. Desired experience identification – based on a CJM, actual customer experience should be compared with the “ideal” one. Resulting gaps become the basis for future improvements. 
  4. Designing the brand experience – this stage deals mainly with brand identity and values, and aimed at provoking a certain set of feelings and emotions within a customer when interacting with the brand. 
  5. Structuring of  the customer touchpoints – this stage is necessary to ensure the delivery of a consistent CX across the channels. 
  6. Measuring and developing – an important closing stage which then bring us back to the starting point as customer experience management is a continuous process. The overall performance can be measured, for example, with the periodic customer satisfaction survey. 

Paired together, CRM and CEM can provide even more powerful insights to act upon. Consider the following example [2]: 

“CRM: “50% of my overall customers purchased below $100”
CRM + CEM: “50% of my overall customers who purchased below $100 said they were not greeted at the entrance, and so rated the store experience at an average of 2 out of 5”. 

That is to say, CEM helps to understand which touchpoints needs an improvement and what sort of improvement is needed exactly. 


Case study

For a case study I’d like to provide an example from the airline industry [4]. Travelling with kids, especially toddlers, may sometimes be problematic both for parents and other passengers, and yet most of the airlines don’t address the pain point of this segment specifically. A strategic design consultancy RKS decided to regard this problem as an opportunity and develop a “travelers-with-kids”-friendly customer experience. First thing they did was the insights gathering from the in-depth interviews with their TA and identifying their pain points and feelings. After that, the CJM was created and key touchpoints identified. They were divided into 4 main groups: pre-flight (destination choosing, purchasing, booking), airport departure (check-in, security, waiting, boarding), in-flight (entertainment, ambiance, food and drink, seating, lavatory, storage) and airport arrival (landing, baggage claim, customs, car rental). Finally, based on the customers confessions (read: pain points) and visualized CJM, the whole customer experience was reconsidered. These are the few examples: 

  • Rent-a-toy service which allows parents to rent a toy of their kid’s choice in the airport for the following flight 
  • Family-facing seats – so that kids would not kick the seatbacks in front of them
  • Spacious lavatories (so it’d be more convenient to change diapers)
  • Personal sound curtains to keep babies calm

Even though this is just a possible design of how – potentially – the airline could look like, I considered it a good example for demonstrating CEM mechanism. 

Summing up, I would like to note again that while there is no unified view on interrelation between CEM and CRM and “whether CEM is a new CRM” it seems evident that implementing CRM provides for a better and smoother CEM (and vice versa). 

Thank you for reading this post, I’d be happy to receive your thoughts on the topic / any additions you’d consider relevant. Maybe you see any limitations of using the CEM approach or possible challenges to it? 


Sources:

1.    Carol-Ann Morgan “A Guide to Customer Experience Management: How To Deliver On Customer Expectations” // URL: https://www.b2binternational.com/publications/customer-experience-management/

2.    CRM vs CEM: Where should you put the money? // URL: https://cloudcherry.com/blog/crm-vs-cem/

3.    Gartner Glossary // URL: https://www.gartner.com/en/information-technology/glossary/customer-experience-management-cem

4.    Linda Tischler “A Concept Airline Eases the Pain of Travelling with Toddlers” // URL: https://www.fastcompany.com/1670985/a-concept-airline-eases-the-pain-of-traveling-with-toddlers

5.    Pine B.J., Gilmore J.H. Welcome to the Experience Economy // Harvard Business Review. – 1998. – July-August. – P. 97-105.

Laktionova Natalia «Calculation and management of customer lifetime value (CLV). Do companies really use CLV only for marketing purposes?»

It’s quite obvious that in a modern digital savvy world only companies which can work with customers data can keep up with their competitors. What is the TOP of mind thing which comes to you when you think about Customer Lifetime Value (CLV)? To me it’s PROFIT or MARKETING. Mostly we tend to thing, that CLV is related to loyalty, profit calculation and return on marketing. However, the approach to use CLV differs within different industries. Let’s take a look at some industries which use CLV studies mostly for giving out money. 

1. Medicine 

For example in medicine during Board members meetings directors plan a certain health programs, they consider a CLV as a resource for strategic planning since each customer depending on his/her lifetime value deserves different treatment. Imagine a 16 year s old boy, who is a heavy smoker and a 80 years old smoker. Most likely, the government would do it’s best to save up from becoming a smoker the first patient rather than the second one. Consequently, the government would give an extra money to funds to promote healthy lifestyle or health programs (Robert W Palmatier, Shrihari Sridhar, 2017)[1][2]

2. Charity companies

CLV ultimate goal can be divided in two: make a person give more or make a person give longer.  Thus, if your company for example deals with blood donors, their idea is to keep each donor with them because if he only comes once, his blood will be useless and the funds invested in taking his blood will be money down the drain . Consequently, each company invest more money in making donors come again rather than just come[3]. Interestingly that in different countries they have different policy for blood donor to reduce donors retention: in Russian Federation they give you a two days off and a cash while in USA donors do not get anything. 

3. HR Management

The longer employee stays with a company, the stronger this company will be. That’s of no use to invest in education and adoption of an employee and in a short period of time watch him leave. That’s why the best HR companies not only find technically perfect candidate but also check if he/she matches a company values and rhythm. Moreover, companies are ready to pay an extra money to good HR managers to analyze employee flow and minimize it[4]. Thus, CLV is not a monetization tool in this case as well. 

Hopefully, this short post made you think differently in terms of CLV usage. 

Sources:


[1]“Marketing Strategy. Based on First Principles and Data Analytics”, Robert W Palmatier, Shrihari Sridhar, 2017

[2]“Customer Lifetime Value: How to Calculate It for High LTV Medical Practices & Why It Matters”, 2017, URL: https://www.closerscafe.com/why-customer-lifetime-value-matters-to-medical-practices/

[3]“Measuring Lifetime Value in Your Non Profit CRM”, Mckenna Bailey URL: https://www.virtuouscrm.com/blog/marketing/measuring-lifetime-value-non-profit-crm/

[4]“Effective HR Management in the Union Environment (Clv Reports)” Jamie Knight, 2017

Yahina Anna «Customer data and analytical CRM»

In the modern world, marketing has become human-centric. As a result, there is an opinion that consumers have more rights than ever, but the same can be said about companies. Due to the many different types of data and information companies can create products and implement marketing programs that most accurately satisfy customer needs and provide a higher level of satisfaction.

According to Criteo, omnichannel retailers using online and offline data have 4 times more information to optimize their marketing efforts[1].At all points of contact modern companies can collect a large amount of marketing data about customers, which can be used to improve segmentation and build omnichannel marketing. Depending on the model of the user path map, a wide range of data sources can be used. For example, in digital space web analytics, social media analytics and session recording can be data sources. Offline contact points can be measured using quality research from customers and stakeholders.

IBM divides all customer information into 4 segments that answer 4 questions[2]

  1. Where? — interactive information (transcriptions of email messages or chat conversations, records in call centers, personal dialogs, web-click records);
  2. Who? — descriptive information (socio / demo / geographic information, user profiles);
  3. What? — behavioral information (history of orders, purchases, payments, use of the service);
  4. Why? — relative information (marketing research)

Based on different types of information, it is possible to form consumer profiles and build communications depending on customer profile. The use of this data can provide a significant advantage for increasing the relevance and personalization of marketing offers[3]

Sources:


[1]Criteo. Глобальный коммерческий отчет // Criteo. — URLhttps://www.criteo.com/wp-content/uploads/2018/04/17_GCR_Q4Report_Russia_RU_FINAL.pdf 

[2]IBM, Increasing Marketing ROI with Customer Analytics, // Fyisolutions. -URL: https://www.fyisolutions.com/_media/ibm_ba_summit_increase_marketing_roi_with_new_analytic_techniques.pdf

[3]Weber M., Improve omni-channel campaign segmentation with customer data // IBM. -URL: https://www.ibm.com/blogs/watson-customer-engagement/2014/11/03/improve-omni-channel-campaign-segmentation-customer-data/

Rundasova Maria «Customer Lifecycle Management (CLM) and Targeted Marketing Campaigns»

Business needs to build effective ways of interaction with consumers. Understanding its customers’ core needs, a company can offer clients goods or services which are the most relevant and valuable. As a product or an organisation, a consumer has his or her development pathway in terms of relationships with a seller. This is a process called customer lifecycle. The essence of this concept is that each customer goes through a series of stages interacting with a company’s product [4]. Can the business influence this lifecycle in any way for its benefit? Of course, yes. In modern marketing, there is such a concept as customer lifecycle management (CLM). This management consists in the fact that a company takes actions allowing it to move consumers through different stages of their lifecycle step by step – from the first contact with a brand to a formation of loyalty [3]. In this case, we can claim that customer lifecycle is the basis for the implementation of communication actions between a company and a consumer within a certain phase of interaction with the company’s product. Hence, the question arises: why? First of all, at each customer lifecycle stage, the business should act in such a way as to provide a consumer with the value he needs. Otherwise, all of the company’s activities would be meaningless: customers would simply ignore the impact on them, as there have been no relevant offers. This means that campaigns at a particular phase of this cycle should be targeted at the current consumers status [2]. In other words, a company must understand:

  1. if a consumer is a new one or not;
  2. if a consumer had made a purchase, after this he or she bought something one more time or it was a one-time thing;
  3. if a consumer can be identified as a risk client (i.e. he or she can stop buying the company’s products at all), there are some possibilities for reactivation or not;
  4. if a consumer has a high level of regular, repeating purchases, transforming him or her to a loyal customer has potential or not.

Customer retention costs less than acquisition. Besides, according to studies, a growth of retained clients share by 5% boosts company’s profits to 95% [1]. So, all CLM campaigns can be mainly focused on retaining existing customers: from stimulating their re-purchase to creating true loyalty to a product.


Sources:

1. Bain & Company, Inc. Prescription for cutting costs: Loyal relationships. [Online]. Available: http://www2.bain.com/Images/BB_Prescription_cutting_costs.pdf. [Accessed: 10- Dec- 2019]

2. Customer Lifecycle Management (CLM): Why it Matters More Now Than Ever Before. [Online]. Available: https://exponea.com/blog/customer-lifecycle-management- clm-why-it-matters-more-now-than-ever-before/. [Accessed: 10- Dec- 2019]

3. Ecommerce Customer Lifecycle Management: An Easy Guide. [Online]. Available: https://www.growcode.com/blog/ecommerce-customer-lifecycle-management/. [Accessed: 10- Dec- 2019]

4. Lifecycle Marketing 101. [Online]. Available: https://mobilegrowthstack.com/ lifecycle-marketing-101-21e874be642f. [Accessed: 10- Dec- 2019]

Martina Marzorati «Channels of Personal Communication and Dialogue With Customers»

In order to satisfy every consumer need, companies are overwhelming buyers with too many choices and marketing messages from every possible channel causing them confusion and poor decisions.

The solution is shifting from one-way monologue to an ongoing two-way digital dialogue, which means moving from communication to conversation with customers. The aim of dialogue marketing is the creation of a long term relationship.

To reach this goal, marketers should eliminate the superfluous and focus their effort to a more personalized, targeted and real-time communication through the appropriate channels. 

Moreover, as in personal relationships, transparency is fundamental, because once trust is lost, also the connection between companies and customers vanishes. 

The two-way dialogue consists in a win-win situation for customers and firms, since it provides values to both parties: on one side clients are empowered and asked to cooperate and they receive personalized experiences according to their needs and preferences. 

On the other side, it represents a data collecting moment, in which the available information received from customers make it possible to build the profile of each of them, which will consequently allow marketers to provide personalized marketing messages and to satisfy their necessities. 

A successful dialogue should be based on the integration of various channels, both offline and online. In particular, the traditional methods, as mass media have been juxtaposed to technological tools as social media, blogs and Web 2.0. 

In order to determine their optimal combination and take advantage from their synergies, companies should consider different features: first of all, the target audience, since it is necessary to understand their tastes and preferences to provide them consistent experiences and added value.

Furthermore, also culture is a fundamental factor: countries with high individualism are likely to be attracted by multi-channels strategy; while in collectivist countries people prefer in store marketing, compared to catalogues or the Internet.

Channels can be differentiated into: 

  • Personal: direct conversation between the sender and the receiver, as SMS Marketing.
  • Interpersonal: interaction between the sender and many receivers, as advertising in radio, television and billboards.
  • Interactive: communication between the sender and a wide audience, but also between the receivers themselves, as social media.

Channels can also be divided into:

  • Mass media: television, radio, magazines, newspaper; whose usage is strongly declining nowadays, because of the spread of the Internet.
  • Guerrilla marketing: creative and unexpected communication, which causes a surprisingly effect and attract the attention of the public. 
  • Social media: the most famous are YouTube, Facebook, Instagram, Twitter and Snapchat. These innovative means of communication are preferred by customers, because they participate in the creation of contents and feel to be more involved. 
  • Email: direct communication to potential or current customers, to send advertising and promotions.

However, communication failures can easily happen, when companies don’t pay attention to the customers’ perception about the marketing message. 

For instance, Heineken’s campaignSometimes Lighter Is Betterreceived negative reactions for the public, because the slogan could easily lead to wrong interpretations. Surely, the topic of the sentence was beer, but especially dark-skinned black people misunderstood it and considered it as a form of racism. 

Heineken, receiving negative comments on social media and having its reputation undermined, was forced to issue an apology. 

On the opposite side, an example of a successful dialogue with customers can be provided by Coca-Cola: the brand focused on personalization to increase the involvement and launched the Share a Cokecampaign, by printing the most common names on the bottles. The campaign went viral, resulting in a sales growth and the massive sharing of pictures of clients with hashtag on social media as Facebook, Instagram and Twitter.Another relevant and famous marketing campaign is #LikeAGirl by the brand Always. It received such positive feedbacks because it was addressed to a specific target of girls in puberty, creating a personalized message of empowerment that could strongly engage them. The campaign was widely spread though social media, television, print and also a film by the documentary filmmaker Greenfield.