Updated: Aug 20, 2020

Q3 is half-engaged and the Budget season already started for many companies.

What we all learned in the past few months is how important existing customers are for any business [for our retail clients, we have seen average Carded Sales growth contribution rising from 36 to 43% in 5 months) , making next year Marketing Strategies and investments even more important than before.

During 2020, retailers learned a few things in terms of Marketing and its ROI.

  • Traditional mailers approach doesn’t deliver the same benefits as before: the general offers proposed by mailers do not offer reasons good enough to shop.

  • Social media investments delivered good results, though expensive when highly targeted

  • Non-Targeted mass mailing have little effect

  • In Online or physical shops, Customers are looking for personalised offers that talk to them

  • The share of existing customers' business has grown significantly in sales and margin contribution

It is therefore clear that CRM activities will be crucial next year. Disregarding them is at the risk of losing Customers to the competition. For the managers that are new to CRM strategies and budgeting, we have developped a practical and quantified 4 steps approach, supported by an Excel tool you can freely request HERE

The Excel tool integrates:

  • Valuation in terms of sales and margin of each CRM activities

  • CRM expenses return on Investment

  • CRM Campaigns Calendar


For the quantified approach to work, some fundamental numbers need to be gathered and recorded. We are talking about sales, margin, share of carded customers sales and their margin contribution.

Senior Management and your CRM Team should be able to provide you with this information. If you do not have them yet, Retail CRM tools like ULYS CRM can deliver them to you.

These numbers are critical as they will be later used to calculate not only the budget, but also the ROI of each Marketing and CRM Investments.


In general, Retailers define their expenses as a % of sales. Marketing is no exception. At this stage, the most important data to input is how many % of sales will be invested in Marketing. The second critical data to input is, out of this Marketing Budget Allocation, how many % will be allocated to CRM.

To help at this stage, defining and quantifying the CRM objectives will help. The additional sales and margin growth expected from CRM will automatically calculate the CRM expected ROI, building on the monthly recruitment targets.

The objectives concern Spending as well as Traffic, including for example the number of new customers to be recruited, the increase of spending or the expected traffic impact from Campaigns.

The CRM ROI is, among all retail marketing investment, not only the highest the easiest to calculate as metrics such as average spending, frequency and Customer Lifetime Value (CLV) are already available in solution like ULYS CRM.


There are 2 components in step 3.

The 1st component details CRM Operation Costs and the 2nd is the share of the CRM Budget allocated to Customers Benefits.

The 1st component isolates all the direct operation costs of the CRM Team. At this stage, the CRM Manager will need help from Finance to obtain the details on complete labor costs, technology investments, communication and other social media spending. Store-related expenses (signs, posters, stands, etc.…) should also be integrated at that stage.

The 2nd component is to define what share of the CRM budget will be invested for Customers benefits globally. We voluntarily keep it global at this stage: the details of the Customer Spending will be defined in Step 4.

Of course, the sum of the 1st and 2nd component should be equal to the total investment amount allocated to CRM, and the Excel tool allows iterations between these 2 components


This is the most strategic part of the CRM Budgeting process. To perform this stage, CRM managers must be clear about the strategic decisions of the Company.

As CRM Points are often used as a promotion currency, it is important at this stage to inform the value for each Loyalty Points.

We recommend to split the Engagement Customers into 2 groups: Existing Customers and New Customers Recruitment. (Advanced CRM Manager will even split the Existing Customers into relevant RFM or other relevant segments).

On Existing Loyal Customers

· What type of campaigns will be run and what budget is allocated to each of them: Campaigns that will accelerate Spending, and Campaigns that will accelerate Traffic.

· What type of campaigns or services will be allocated to VIP customers? (tools like ULYS CRM enable CRM Manager to precisely segment VIP Customers and measure their value added in terms of Cash and profits)

Note: Spending and Traffic accelerators Campaigns can be self-funded or sponsored by Suppliers either for Personalized Direct-To-Customer (DTC) offers or for non-Targeted offers for all carded Customers.

On New Customers Recruitment

How many campaigns will be allocated to recruit new Loyal Customers, and what will be their complete costs. Each of the Campaigns can be planned in the CRM Campaign Planner. The corresponding costs can be, for example, entry deals offer, points bonus for purchase stimulation, booster points campaigns,

HPT Consulting is an authorized distributor of ULYS CRM, an advanced Customer Behaviors Analytics Platform, already used by several retailers in South East Asia.

To get you free copy of the CRM Budget Excel Tool, contact us HERE

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