Best Buy Gives Glimpse Into CRM/Loyalty Programs at NCDM

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PHILADELPHIA -- Best Buy is serious about CRM, Tony H. Hart, vice president of enterprise customer relationship management at Best Buy, said yesterday at the National Center for Database Marketing conference.

Hart, who gave the keynote address, walked the audience through the CRM philosophy of the specialty retailer of consumer electronics, personal computers, entertainment software and appliances.

The Minneapolis company starts with data it collected over the past few years from all possible customer touch points, including the Internet, point-of-sale at retail stores, direct mail and telemarketing and direct response calls.

Though the company already has a "pretty hefty database, we are currently working on an initiative to try to identify more of our customers," he said.

After gathering the data, Best Buy uses data analytic and segmentation tools that turn the customer database "into a customer knowledge base," he said. This helps Best Buy create customer profiles it uses "to find out what makes the customers tick." The next step is to leverage the profiles to "create behavioral and relationship-based promotions." Campaign management "ignites the whole customer-centric process of the organization."

Hart said that Best Buy uses tools from SAS, SPSS, Unica, MicroStrategy and Targetbase. He also gave examples of Best Buy's programs, including sending e-mail messages to gamers, DVD purchasers, music buyers or new customers. The e-mails direct recipients to a specific Best Buy Web page and feature targeted promotions. In the future, the Web pages might even be targeted to a specific person versus a specific group of customers, he said.

Hart also spoke about a loyalty program, Replay, the company has begun for its Musicland Group, which is a wholly owned subsidiary and a specialty retailer of home entertainment software products. The company operates more than 1,300 stores under four names -- Sam Goody, Suncoast Motion Picture Co., Media Play and On Cue -- in 49 states, Puerto Rico and the Virgin Islands.

Hart also said Best Buy is testing another loyalty program for music, movie and game customers called the Reward Zone.

"We think this program will be attractive to the younger market, which is a group we are trying to reach," he said.

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