Take the Leap to Integrated CRM
"What a great sweater," you say out loud. You click "add to cart" as you envision your besweatered self hot-dogging on corporate ski day.
Then the sweater arrives, but doesn't fit. And corporate ski day is this weekend. You can't exchange it at the mall, unless it is from EddieBauer.com or another e-tailer that allows returns to its bricks-and-mortar stores.
This is a new take on integrated marketing, an idea that has been around for a decade but is taking on a new visage as companies awaken to how vital customer relationships are in today's customer-controlled environment.
"Marketing used to be about finding more customers for your products," said Harry Egler, Eddie Bauer's vice president of customer relationship management. "Now it's about finding more products for your customers. You have to make your decisions based on total customer behavior and experience. Twenty years ago it was difficult to take this customer-centric approach because our customer data was siloed in separate repositories for retail stores and catalog sales."
This limited the company to traditional marketing decisions, such as determining whether to send Betty a catalog based solely on her catalog-purchase history.
"Meanwhile," Egler said, "Betty was probably saying, 'I shop in their store all the time -- why don't I get their catalog?' "
Eddie Bauer moved to bridge that gap a few years ago. "When we started to look at customer behavior across channels over the course of a year," Egler said, "we saw some interesting patterns that made a case for keeping all the data in one location." This led the company to bring all the numbers under one roof. The resulting data warehouse shows each customer's total Eddie Bauer purchasing behavior in one cohesive picture.
Spending per customer, profit per customer and the sheer number of customers who shop more than one channel have increased dramatically, Egler said, since Eddie Bauer embraced multichannel CRM.
"If I profile our customers based on which channel they use to buy our merchandise," Egler said, "multichannel customers prove more bonded to Eddie Bauer. And the more bonded your customer, the more they buy from you."
Clearly, data integration has paid off for Eddie Bauer. But even a database that shows you the whole picture goes only so far if customers do not shop your alternative channels.
"You can't just say, 'We've got these products, and you can buy them through any channel you choose,' " Egler said. "Providing another contact point is great, but it has to relate to something important to the customer, something they didn't know, a benefit they can't get elsewhere, a product or service they didn't know you offered."
Egler offers these guidelines when developing a multichannel CRM strategy:
o Invest in customer service. "I can't emphasize enough how crucial it is to build in adequate customer support," he said. "The complexity of customer service logistics is magnified. There are many operational problems that don't fit into your neat packages. It's easy to get in trouble if you don't look at things from a company point of view in terms of what you're promising vs. what you can deliver."
Handling a return of an online purchase at the store level is just one example. "You have to think through all the possible customer implications and be ready to handle them," he said. "And to do this, you have to have data from across all channels."
o Put yourself in your customers' shoes. "Customers don't necessarily distinguish between a small version of your catalog and a large version," he said. Such problems can be amplified when you add multiple contact channels to the mix.
You may have excellent reasons for sending Betty both the thick and thin editions of your spring catalog -- plus an e-mail highlighting the hand-embroidered bed linens pictured on the cover. But Betty may be asking herself, "Isn't that the same catalog I just got last week?" Think through every communication carefully, with every other contact point in mind.
o The bottom line is not black and white. Profits generated from multichannel CRM can be hard to measure.
"It's very tough to look at multichannel CRM overall and see if it's paying off," he said. Measurement tools such as hold-out sampling and response to specific offers cannot reflect the return on investment on integrated marketing as a business philosophy.
"What it comes down to is profit per customer," he said, "and that's not hard to quantify. When you focus on customer value and total customer relationships, you see which side your bread is buttered on.
"What you're really trying to do is create an environment where you and the customer have trust -- to find out what they want and see if you can adapt to meet those needs. It's a cliché, but you have to put on your customer hat and say, 'Is this providing the customer with real value?' If it doesn't seem like there's value, there probably isn't."
• Sandra L. Gudat is president/CEO of Customer Communications Group, Lakewood, CO, a relationship marketing design and implementation company. Reach her at email@example.com.