Bankruptcies are expected across the retail industry. Some will be delayed until consumers return for liquidation sales. Chains that endure will have to re-engage with consumers who have adapted to e-commerce and may be repelled by the “hassle of shopping with social-distancing measures like [store] capacity limits”. As reported on Retail Dive, some “retailers have adjusted their digital strategies to connect with consumers from afar — a shift that will be necessary to keep customers engaged after the panic from the outbreak subsides.”
Retailers that are more proactive with customer communication will be best positioned to retain customer relationships and lifetime value in the future. That includes communicating plans for opening or closing locations in alignment with states’ shelter-in-place orders, curbside pick-up instructions, and measures to keep stores clean and safe upon re-opening.
Consumer information is the backbone of this outreach effort. Higher accuracy brings greater clarity and less confusion. Conversely, during a time of stressed resources, incomplete and out-of-date customer information hampers retailers’ ability to engage consumers in the short-term and retain them in the long-term.
Most CRMs are out of date
Every year, 60M people change their addresses, 45M change their phone numbers, and 2.1M legally change their names. On average, 5%-15% of typical CRM records go out-of-date in a single month.
Consolidations and acquisitions compound the problem. Consumer data held by an acquired company doesn’t readily update when it’s integrated with the acquirer’s databases. A parent company may inherit multiple records for the same consumer. Siloed records could co-exist for years. Most organizations have no formal data governance framework or budget dedicated to data integration. Bringing data together into a single, current view is often difficult and expensive, yet doing nothing invites the risk of non-compliance and operational waste.
The cost of data decay
A commissioned study conducted by Forrester Consulting on behalf of Neustar found that over 60% of respondents believe “lack of contact data” was “critical” or “important” to addressing challenges in contacting customers. These challenges impact the top and bottom lines: 48% of firms experienced increased operational costs and 43% lost productivity. Though tolerable during a bull market, inaccurate customer information may exacerbate the challenges of an economic downturn.
For example, retailers may need to contact consumers before delivering an order. If, for lack of good data, the business can’t reach the consumer and delays shipment, the customer relationship could suffer, despite the retailer’s best efforts.
Communication will be important for in-store shopping, too. Stores may need to limit capacity to meet social-distancing requirements. Customers unaware of the limitation may be severely inconvenienced or repelled entirely. Imagine parents with several young children not knowing until they arrive at the store that they must wait in line until it’s their turn to enter. Inadequate communication could cause retailers brand damage and cost customers’ lifetime value.
As consumers’ behaviors and expectations change, retailers need to shift their strategies to retain customers. Retailers that assess the quality of customer information currently on file and understand in real-time the accuracy of their CRM sources will be better positioned to adapt.
Refresh and deepen consumer data
Now is the time to implement a strategy that ensures that customer information on file is consolidated, complete, and dynamically updated. If an audit of consumer records reveals related information is spread across silos, then develop a plan to connect the records. It’s easier to match identifying information to unique, persistent customer records. This will expedite subsequent updates and repairs to customer databases as changes occur.
Second- or third-party consumer data enhances this effort. Referencing multiple authoritative data sources makes it possible for databases to corroborate and absorb changes as they occur. Because those changes are continuous, automated CRM updates must likewise become a continuous part of business process.
This isn’t easy to develop or maintain in-house. Data integration topped the list of enterprise challenges in a survey of 1,400 business and IT professionals. In Forrester’s survey, 67% of respondents say that technology vendors are critical or important to solving the challenges discussed earlier.
A consumer data management solution may be one of the most effective ways to mitigate the current environment of uncertainty. By proactively cleansing, repairing, and filling in the gaps across customer records, such a solution ensures the most accurate and complete view of each customer.
Regardless of what disruption COVID-19 brings, retailers retain control over how they manage their CRMs. Honing an accurate view of customer information now will enhance customer outreach throughout each phase of the pandemic.
Neustar offers a free data analysis for organizations to understand the quality of their current data, and also provides insights for operational data improvements. To learn more, contact [email protected]