Quality, Not Quantity
Part of having a booming mail order business is not just getting a catalog out to customers, but getting the right catalogs to them. At Land's End we had been operating for many years with a system that effectively generated mass amounts of catalog mailings. But as time went on we learned that quantity does not make up for quality or solid customer relationship development.
Imagine, for example, a client who is a petite woman buying Land's End hiking boots for a friend or relative who is an avid outdoorsman. Even though her hiking boot purchase was a one-time thing, she continued to get outdoor- wear catalogs from us. All the while we missed the opportunity to market our women's wear to her.
This was because our multiple legacy systems for implementing catalog mailing used custom SAS code and legacy Cobol systems that simply ground out the mailings by address and buying history. Email customers didn't fare much better as we used manually driven Excel spreadsheets to select customers for mailings--without any CRM functionality whatsoever.
By early 2000 we realized we had to seriously evaluate our systems. In one of our legacy systems we examined the code with a Cobol consultant and realized that its business rules weren't applicable anymore. Land's End was not simply one catalog any longer, but multiple specialty catalogs--as well as a business operating through multiple channels, including mail order, phone order, and Internet.
Yet, we were sending catalogs to people we wouldn't have chosen to send to in these in new channels. Because we couldn't turn it off we were throwing away dollars. At the same time, our untargeted mailings were hurting customer perception of us. Ultimately, it became clear that bottom-line costs were in danger, and we began the hunt for a CRM system.
The marketing department worked with the IS department to present our core functionality needs [to prospective vendors]. Our goal was to create a system that had the ability to do complex segmentation, create true randoms, and cross-reference our core data comprising 35 million customers. We also wanted complex segmentations of that data for versions of catalogs. The CRM system had to be a robust design, and we included or excluded vendors based on their ability to execute the complex scenarios in our script and the flexibility they demonstrated in doing so. Based on its ability to meet our standards, we settled on Unica's Affinium software.
Now we are able to do cross-channel, customer-centric marketing that allows us to get the right marketing programs out to customers and can even proactively solve customer service issues before they occur. The most recent example is an email gift certificate program that sends out coupons or certificates to customers based on their responses to a survey. If a customer indicates he was unhappy with a product there is an automated Affinium process that generates the gift certificate email. The system is running 24x7, simply waiting for triggers that would cause the certificate to be generated and head off poor customer perception.
We have many long-term goals for the system. The most immediate is to make the Affinium-processed data available to customer service representatives so they can see a client's entire purchase history--for themselves and others--and make appropriate, sales-worthy buying suggestions.
Since our first year with Affinium, we continue to realize an annual ROI/savings of 22 percent on the total cost of the project areas, including costs of in-house labor, software upgrades, implementation, and catalog and marketing expenses.