CCG - Those Who Integrate Dominate


		Excerpted from StrateScapes – Volume 3, Number 1

Those Who Integrate Dominate:
Eddie Bauer says, if you don’t have integrated CRM, you might as well not have CRM at all.

“Multichannel customers prove to be more bonded customers. And the more bonded your customer, the more they buy from you.”

“What a great sweater,” you say out loud. One hundred percent lambswool, gorgeous pattern, colors that call your name. You don’t need to touch it to know you’ve got to have it. 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.

No way you’ll be able to exchange it at the mall ... unless it’s from EddieBauer.com. Anything you buy from the EB Web site can be returned at any brick-and-mortar EB store, no questions asked. It’s one way Eddie Bauer is using multichannel customer relationship management (CRM) to keep folks coming back.

This is a new take on integrated marketing — an idea that’s been around for a decade but that’s 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,” explains 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.” And seeing that big picture takes a new attitude about marketing — how you gather data, how you use that data and why you do it in the first place.

Making the Multichannel Leap
“Twenty years ago it was difficult to take this customer-centric approach,” Egler says, “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 points out, “Betty was probably saying, ‘I shop in their store all the time — why don’t I get their catalog?’”

Eddie Bauer made a dramatic move to bridge that gap in 1988. “When we started to look at customer behavior across channels over the course of a year,” Egler recalls, “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.

All Good in Theory, You Say
But it’s not like data warehousing is a simple affair (see Data Gets Personal). And besides, is it really worth letting your customers unload their unwanted Web purchases at your stores?

“It’s worth it,” says Egler. “When someone comes in with a return, they don’t have a big sign on their forehead that says, ‘Hey, I’m your best customer!’ But in the lion’s share of cases, the only reason they’re returning something is that they’ve bought so much from us, the odds simply caught up.”

What’s more, the results speak for themselves. Spending per customer, profit per customer and the sheer number of customers who shop more than one channel have all increased “dramatically,” Egler says, since Eddie Bauer embraced multichannel CRM. “If I profile our customers based on which channel they use to buy our merchandise,” Egler says, “multichannel customers prove more bonded to Eddie Bauer. And the more bonded your customers, the more they buy from you.”

No Value, No Sale
Clearly, data integration has paid off big for Eddie Bauer. But even a superdatabase that shows you the whole enchilada goes only so far if customers don’t shop your alternate channels.

“You can’t just say, ‘We’ve got these products, and you can buy them through any channel you choose,’” Egler cautions. “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.”

Besides the option to return catalog and online purchases to any Eddie Bauer store, shopping Eddie Bauer means customers can:

Choose from a greater range of products, sizes and colors via the Web and catalogs.
Order catalog merchandise at any Eddie Bauer store.
Take advantage of EB sales, contests and promotions via any channel they choose.
Be recognized as best customers regardless of which channels they shop.

So instead of hearing, “We don’t carry extended sizes,” or “That promotion is only on our Web site,” you hear, “Yes, we can help you with that.” And instead of being dropped off the catalog mailing list, a loyal online or store customer is likely to get an Eddie Bauer Home™ catalog as well as the clothing edition.

“What you’re really trying to do is create an environment where you and the customer have trust,” Egler says. “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.”

It’s Not All Wine and Roses
Egler is quick to point out that multichannel CRM can be a tough row to hoe. He warns fellow marketers to watch for three pitfalls:

Things can get hairy. “I can’t emphasize enough how crucial it is to build in adequate customer support,” says Egler. “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 versus 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,” Egler adds. “And to do this you have to have data from across all channels.”

Customers can get confused. “Customers don’t necessarily distinguish between a small version of your catalog and a large version,” Egler points out. Problems like this can be amplified, he says, 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, Egler counsels, with every other contact point in mind.

The bottom line isn’t black and white. Egler admits that profits generated from multichannel CRM can be hard to measure apples to apples. “It’s very tough to look at multichannel CRM overall and see if it’s paying off,” he says, noting that measurement tools such as hold-out sampling and response to specific offers can’t reflect the ROI on integrated marketing as a business philosophy.

“What it comes down to is profit per customer,” Egler concludes, “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.”

STRATESCAPES and STRATESCAPES SUPPLEMENTS are published by Customer Communications Group, Inc., a full-service agency specializing in relationship marketing and customer communications. Our comprehensive, turnkey services include data analysis, customer segmentation, strategic consulting, account management, creative execution, print production and multimedia solutions.