The world of high-end retail is a unique proposition for marketers. It is less affected by fluctuations in the global economy, given that the majority of buyers are sufficiently wealthy to be immune from the kinds of concerns that affect other sectors.
However, this means it also faces an idiosyncratic set of challenges – not least the tendency towards low retention rates recorded by many companies.
Milton Pedraza, chief executive of the Luxury Institute, has previously pointed out that retention is generally stuck at between ten and thirty per cent when it comes to top tier brands. This is even true of those with multiple stores and a presence across numerous channels, including online.
Given that such organisations are targeting a consumer base with a great deal of disposable income and the knowledge and nous to switch sellers at will, it is clear that they need to take steps to engage with their customers if they are to maintain their loyalty.
Writing for Luxury Society, Mr Pedraza said: “Top sales associates across industries have told us that the sales model is broken in most retail companies. Instead of building profitable long-term customer relationships, most sales associates focus just on transactions.”
Ultimately, businesses need to create connections with their buyers if they are to improve their retention rates and not find themselves scrambling to bring in new business at the end of every sales cycle.
There are a number of ways of doing this, not least by investing in bricks-and-mortar stores where customers can engage with knowledgeable, enthusiastic sellers who can guide them in their purchases.
However, in the modern retail landscape, online is just as important – and this is where CRM software can come in.
Targeting the right people at the right time
Unfortunately, many companies can find themselves adopting a sort of generalised approach to their marketing campaigns that can end up doing more harm than good. For instance, simply sending out a regular newsletter to a list of former buyers who may or may not wish to purchase anything for a second time can leave them frustrated and cause fundamental damage to a brand, particularly a luxury one.
“Sending personal, individualised emails and having a one-on-one phone dialogue creates value for the customer and the brand. Inspire sales associates to generate their own simple, brand-appropriate emails to top clients and watch email open rates soar,” advised Mr Pedraza.
Although it might seem oxymoronic to suggest that automation is a way to pursue this aim, CRM can help provide this personal, targeted touch if implemented correctly.
Engaging through mobile platforms
As a growing number of consumers become comfortable with shopping online, especially through tablets and other devices of this kind, it is crucial that businesses can offer a mobile-optimised and unified sales process.
By storing data and making it easier to access, CRM ensures that teams across all divisions (including mobile) can get the information they need to provide strong levels of customer service.
Direct contact and the personal touch
Offering sales associates the chance to interact on a personal basis with customers is crucial, particularly in the luxury market.
“Make sure that every sales professional is fully educated and rehearsed in how to present their credentials in a manner that inspires trust, even if the customer declines to share their information immediately,” explained Mr Pedraza.
For salespeople to do their job effectively, you need to give them the right data to understand where customers are coming from and how best to deal with them depending on the situation in question.
In the relatively claustrophobic world of top-end sales, word of mouth counts for a lot. Whether you want to set up a customised referral programme whereby consumers can link their friends to you, or simply ensure that they have good things to say about the brand, providing strong levels of service can have a lasting impact.
If installing CRM software can help a business manage its customer data and engage more effectively with buyers, it can end up having a big impact on the bottom line.