Rack Room’s Customer Engagement Takes Great Strides with Salesforce.com: A CRM Elite Customer Awards Case Study

As Charlotte, N.C.-based Rack Room Shoes grew in size, it realized its marketing efforts needed to grow in sophistication. The shoe retailer, together with its sister company, Off-Broadway Shoe Warehouse (which it acquired in 2002), operate some 500 locations across the country. Until recently, the two stores managed their email marketing through a third-party vendor that sent a standard, one-size-fits-all email to all customers.

THE CHALLENGE

But this approach was becoming both more costly and less effective for the burgeoning company, which is owned by German firm the Deichmann Group and bills itself as “the family footwear retailer of choice,” carrying a wide selection of national brands in the dress, casual, and athletic categories.

A particular problem was the vendor’s siloed model, which made it harder to measure email marketing and slowed down the manual delivery of time-sensitive marketing messages. “The approach was rather unsophisticated in terms of our communication with our customers; [it was] mostly ‘batch and blast,’ not a lot of personalized information, not a lot of segmentation strategy,” said Scott Baldt, senior director of omnichannel at Rack Room Shoes, in CRM’s May issue. “We were sending a lot of communications to consumers without regard to [their] level of activity in the program or likelihood to respond to the communication to begin with.” Consumer engagement data, campaigns, and personnel—from both companies—needed to be brought onto a single CRM platform.

THE SOLUTION

Rack Room turned to Salesforce.com’s Marketing Cloud, and the move paid off in a big way: With Marketing Cloud, the two companies have increased store traffic via incentivized in-store rewards programs and added other digital channels, such as text messages, to their consumer outreach strategies. And their marketing teams have increased productivity by bringing digital marketing in house, automating campaigns, and integrating data and analytics. As a result of the new platform, the company has been able to successfully integrate more relevant information into campaign messages. 

Its points-based rewards program, for instance, has benefited from more informative, targeted messaging. “In the past, in our marketing communications, we had no reference to whether [customers] had an available reward, whether they were close to earning a reward,” Baldt said. “Those are the types of things that we’ve been able to insert into our campaign messaging to help drive performance. That’s been a real strong factor.” 

And by automating their email and text campaigns, both stores’ marketing teams now have more time to assess customer data and come up with more strategic, data-driven campaigns. Such “journey-based communications,” as Baldt put it, are a central part of Rack Room and Off Broadway’s larger goal of employing a more targeted marketing strategy.

The results with Salesforce Marketing Cloud have been impressive, as both Rack Room and Off Broadway have seen the revenue from their digital campaigns take off since the deployment: Rack Room Shoes’ online revenue increased 161 percent for email and 451 percent for SMS, and Off Broadway Shoe Warehouse’s online revenue increased 44 percent for email and 291 percent for SMS. 

“Our long-term goal is to really gain a better understanding of which data points are more likely to predict positive impact on performance across all of our spaces,” Baldt said. “Right now email, SMS, and push notifications are what we’re using the platform to help drive. Next steps are how do we better activate our customer data in our social spaces and with our digital marketing teams as well.” 

Real Results

• Rack Room Shoes saw an online revenue increase of 161 percent for email and 451 percent for SMS.
• Off Broadway Shoe Warehouse saw an online revenue increase of 44 percent for email and 291 percent for SMS.