Three keys to unlocking customer intel
Zach Goldstein is CEO of Thanx.
CRM is big business; the ubiquitous business acronym that stands for “customer relationship management” is almost impossible to escape.
Salesforce is the most commonly known player, and it hit $10 billion in annual sales last year, an incredible number and a sign that data is a priceless commodity.
Customer data is important for a number of business activities, from simply building out your ideal demographic to keeping track of transactions. Essentially, it’s getting to know your customers better, much like a high-quality manager might.
A smile or a grimace
“If you think about what an A+ restaurant manager does—recognizes the face of the VIPs, connects with them or sees a grimace and recognizes that something is wrong—those are things that really good restaurants are doing in the four walls, but very few are doing that out of the four walls,” said Jessica Valenzuela, CEO and cofounder of GoGoGuest, a Wi-Fi provider with CRM overlay. “Knowing your customer and having clear data and being able to connect with them is the equivalent of that for the whole business.”
But the most valuable output from a CRM-enhanced business is marketing that resonates with consumers. Targeting consumers closely means less money wasted on digital marketing efforts.
“That’s the promise of good marketing, more bang for the buck. You couldn’t do stuff like this 10 years ago,” said Thomas Scott, a franchisee who uses a CRM system to market for his four locations of Just Love Coffee Cafe.
Companies implementing a CRM stand to see some big changes in the business, a better understanding of the consumer and enhanced marketing.
But it’s not just another module you slap on the restaurant technology suite. There are three keys to a successful CRM system: connectivity and usability are the nuts and bolts. But first operators need a system to collect all the consumer data that drives the whole process.
Collecting consumer insights
There are a lot of ways to collect customer data. The big trend is feeding that data from an app into the CRM. That’s why the industry is rife with free delivery offers or a free side item for signing up on the app. It’s a great way to get customers into the system and start building data.
But just about any form, log-in or point of contact can help build out data for a CRM.
Scott happened to be looking for better Wi-Fi service for his coffee shops when he came across a novel way to collect data at the same time with a service called GoGoGuest.
Essentially, the startup offers smart Wi-Fi service to ensure that everyone is getting the bandwidth they need, but the CRM connection comes when users log-in for the first time at the coffee shop. They enter their information, and it allows them internet access and pushes that valuable data into the company CRM.
That data exporting is critical for any collection source. There are so, so many platforms like GoGoGuest across the operational spectrum that give little perks for consumers in exchange for data. But they all need to talk either through an API (access point integration) or be a native app within the CRM system.
There are also point-of-sale connections, which are getting easier, but legacy systems are still going to cause headaches. Connecting the CRM transaction data can be quite valuable. For instance, matching a name in a transaction to a loyalty account connects the dots directly. And connecting with a larger transaction database can bring an incredible (almost scary) level of data into a business.
Bridg is one company that links a massive collection of credit card transaction data with a company POS, in a new CRM offering the company kicked off in August.
“Our research shows that the average brick-and-mortar business today is, at best, able to identify 15 to 20 percent of their consumers via a loyalty or other opt-in marketing program,” said Amit Jain, founder and CEO of Bridg.
Jain said he can help identify the rest of those customers and draw out key marketable attributes like income, ethnicity, where they live and how they spend.
Connecting the dots
The second key is how to keep all this data. It’s well beyond most operators to store it on a server and much of the industry has moved to cloud-based or software as a service (SaaS) setups. For one, it avoids the dire privacy concerns and makes the data usable everywhere.
To the average operator, all CRM platforms are going to spit out usable lists of data and make it easy to use in marketing. But connecting to all the different restaurant platforms should be a major deciding factor.
If it doesn’t connect with the POS or the email and SMS marketing solution, there will be a lot of wasted time exporting consumer lists, uploading them to another platform and diagnosing any data issues. Making that a seamless track from transaction to the CRM and out to marketing means it’s a lot easier to just use the CRM without working on the CRM.
“The best CRM is the one that people use. It’s true,” said Keith Gerson, the CMO at FranConnect, an end-to-end franchise operations software suite that includes a CRM.
He said making sure everything is connected is especially important in a franchise system. It means all the data will be usable, but it also allows information to flow upward to the franchisor who can also use the data to enhance operations across the system.
“We’ve got what we call a federated system, wherein the location is using their own data, but from the corporate perspective can help by doing things for the franchisees in the system,” said Gerson. “So if I want to do an ad campaign, I can execute it at the headquarters using the franchisee data.”
Making use of the CRM
When it’s all connected, user-friendly and packed with data, marketing from a CRM can mean significant results for savvy marketers. Thanx CEO Zach Goldstein said successful use of a CRM can answer one of marketing’s biggest questions: What is actually increasing revenue?
“It’s a funny saying: 50 percent of marketing works; the problem is I don’t know which 50 percent,” said Goldstein. “When you’re driving for accountability, generic marketing doesn’t cut it. We’re seeing email rates declining. That space is becoming harder and to break through that, you need to talk directly to your customers.”
Thanx just launched its own marketing automation tool that uses customer data. And it’s part of a growing list of marketing automation platforms hitting the market. The main reason for the influx of tools like this is that they work really well if used right. Goldstein said when a marketing budget is the customary 1 or 2 percent of sales that trickle into the franchise ad fund or local budget, every dollar really counts.
Gerson said automation is another major factor, and it means even better results because marketers can spend more time analyzing and less time pushing buttons, if they even remember.
“Automated workflow is absolutely a necessity this day and age. If you leave it for people to execute at the right moment, it’s not going to happen because they’re just so busy,” said Gerson.
At Bridg, Jain likes to drill down dollar by dollar in their freshly launched CRM tool. He said every dollar invested into laser-targeted marketing brought back $9.40 at one brand.
And it’s not only pure revenue; it can mean sustained traffic, too. “Over three years, one brand has taken their one-and-done rate from 50 percent to 37 percent,” said Jain.
“And 13 percent of their one-and-done customers turned into regulars. That has brought them 3.79 percent same-store sales growth and maintained the same number of regular customers.”
Despite the endless array of uses for a quality CRM system, it’s just a tool. Those results require connectivity, quality data and a smart marketer behind the keyboard. Ultimately, a CRM is only as good as the operations around it.
“Honestly, we can’t take any credit for this. We just unlock who your customers are,” said Jain.