In its second-largest acquisition, Amazon buys the company for $970 million.
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The third e-mail asks the customer why he made the purchase, such as to lose weight or because he is rehabilitating after a heart attack. “If it’s because of rehab for a heart problem, I know what kind of information would be valuable to them about that purchase,” Lindquist says. He says the personalized e-mail program begun early this year has lifted open rates by 150%. Under consideration are personalized web pages that would use the information 2nd Wind has gathered to provide relevant content to individual customers.
For some retailers, the improved service made possible by a fuller view of the customer is as important as more effective marketing.
Take Intermix Inc., a New York-based fashion boutique with 22 stores, which has been consolidating cross-channel customer data for two years, since shortly after launching its e-commerce site. The retailer includes in each customer’s file which designers she likes and what types of garments she buys, then uses that data to craft relevant e-mails. “We have a less than 1% annual opt-out rate, which tells us we are providing information the customer finds relevant,” says Don McNichol, director of e-commerce.
And because McNichol’s online customer service team has access to a complete history of what a shopper has bought online and in stores, those representatives can work with store employees to provide superior service.
“Customer service reps call store managers all the time. They say, ‘Hi Cindy, this is a best customer, hold this for her.’ That’s the power of multi-channel retailing and having a little more information so you can service them to the next level,” McNichol says.
That improved customer experience is also the main benefit of cross-channel data for Genius Jones Inc., which sells designer children’s furniture, toys and apparel from two stores in Miami and online. Using technology from CoreSense Inc., the retailer tracks a customer’s orders online and in store, including e-mail exchanges with the customer and notes made by company employees about contacts with the shopper.
While only its South Beach store is open on Sunday, an employee in that store can take a call from a frustrated customer, access her order history and provide accurate information, regardless of where the order was placed, says Daniel Kron, owner of Genius Jones. And if someone who walks into a store can’t remember the model of the stroller he bought online, an employee can look up that purchase via the POS system and help him find matching accessories.
What it costs
Of course, all these pieces required to provide an integrated customer view cost money. REI’s customer data warehouse project required a multimillion dollar investment. Loyalty software licenses cost at least $450,000 for a retailer with sales of more than $250 million and as much as $1.85 million for retailers with sales of more than $5 billion, says AMR. And implementation costs at least as much, the research firm says.
Sending segmented e-mails cost $2 per customer when delivered to at least 5,000 customers, including the cost of creating the message and the e-mail itself, says Lindquist of 2nd Wind. Personalized URLs cost 25 cents apiece just for domain names, and, with the cost of creating content, such a program could run into hundreds of thousands of dollars for larger retailers, he says.
“That’s why relevancy is so important, because it’s going to add up quickly,” Lindquist says.
“Relevance” is such an important word to Lindquist that it’s posted on his office wall, and the goals of highly targeted marketing and personalized service are how he and other retailers justify the cost of better understanding their customers. Given all the choices consumers have today, retailers who stick with irrelevant and impersonal do so at their peril.