Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Part of the beauty of e-mail marketing, Sheahan said, is that it is so inexpensive-“pennies per e-mail.” But that low cost also could lull some into not treating the medium as seriously as high-cost marketing campaigns. “You have to measure results,” he said. “Don’t let the relatively low cost of e-mail make you shirk that responsibility.”
Among the tools that Sheahan urged: use control groups; test discounts, coupons and other offers; and score customers on the basis of recency, frequency and monetary value. “E-mail is the most cost-effective marketing you can do if you spend time learning about your customer,” Sheahan said.
Retailers can collect e-mail addresses in a number of ways, starting with the most basic-asking web customers to provide addresses for order confirmation or other questions in regards to their orders, then asking permission to use the e-mail for marketing. That’s not as easy as it sounds. Sheahan reports 40% of Egghead’s customers opt out of e-mail marketing as soon as they give an e-mail-consistent with industry experience. J.C. Penney collects additional e-mail addresses by asking all 150,000 sale associates to collect e-mail addresses from in-store customers. Clerks enter the e-mail address into the point-of-sale terminal, which forwards it to a marketing database.
But traffic and sales don’t always translate to a successful web site; the follow-up is just as important. The conference featured much discussion about creating and maintaining a customer relationship. “Relationships are important, but they are hard to build,” Pradeep Singh, president of Talisma Corp., a vendor of e-customer relationship management systems and chair of the first day, told the conference. “The Internet redefines all customer service; it’s not just another form of customer service.”
One retailer that has practiced that lesson from its start is Amazon.com, Bill Price, vice president and general manager of customer service, said. “From the very beginning, Amazon’s mission has been to be the most customer-centric company on earth,” he said.
Amazon operates nine customer service centers around the world. The closing this year of a customer service center in Seattle was the result of a reduced need for customer service, Price said. Orders per customer-service contact have gone to 230 from under 100, he said. That has been the result of Amazon’s beefing up self-help capabilities. For instance, order histories are online and customers can check the status of orders any time. Customers can confirm, change, cancel and consolidate orders on their own. In addition, the help section has been re-designed to make it more searchable so customers can find what they want without calling customer service. Today, Amazon sexperiences three to four times the number of visits to its self-help section than it does calls to its customer service centers.
In addition, Amazon has adopted some good, old-fashioned ways of dealing with customers. It employs order specialists who can deal with special requests, it offers free replacements and refunds with “few questions asked,” and it has eliminated time limits for customer service calls on particularly complicated customer service questions.
Price recounted an example of how Amazon takes extra steps to create great customer service. In the middle of last year, Amazon accepted pre-publication orders for the fourth Harry Potter book. Amazon charged customers for standard shipping, with the belief that Amazon would get the books in advance and could ship them to customers to arrive on the publication date. Only later did Amazon learn that the publisher would not release books before the publication date, which fell on a Saturday. Thus Amazon, which had orders for 400,000 books, faced the prospect of customers receiving the books after the publication date, thus creating many dissatisfied customers whose friends who had gone to bookstores and gotten their books before them. Amazon decided to send all books for next day, Saturday delivery.
One thing that Internet selling has taught retailers is the importance of being fluid. For instance, Williams-Sonoma has 90 people in its e-commerce operation and they’ve been through a constantly changing organization, Nandkeolyar said. “We’ve been through many re-organizations that have helped us create a clear vision about what this was all about,” he said.
One of the ways in which organizational thinking has to change is in regards to the issue of whether customers should return web purchases to the store. Many customers prefer that option. But in some cases, store managers have objected because they get dinged for returns. J.C. Penney has dealt with that issue by giving stores in the area where a customer lives credit for Internet sales. “This requires a mindset of letting go of preconceived notions,” Pappajohn said.
And so in the end, today’s e-retailing world is requiring retailers to go back to the basics-focusing on what the customer wants. “This is all about putting the customer at the center of everything we do,” said Anne Marie Blaire, director of Internet brand development for Intimate Brands, owners of Victoria’s Secret. J.C. Penney has addressed that issue by re-designing its web site. Customers can search for products by size, brand or price. “We wanted to a create a customer-centric shopping experience, not a product-oriented experience,” Pappajohn said. “They can take different search paths depending on how they are shopping.”
It all comes down to the customers’ wants and not technology. “Develop the strategy first, then the technology to meet that strategy,” said Sally McKenzie, division vice president of EddieBauer.com Above all, McKenzie said, “Start with the basics and keep it simple. Listen to the voice of the customer.”
Pure-plays have to change their mindsets as well
Clicks-and-mortars and catalogers weren’t the only stars shining at the eTail 2001 conference. A few pure-play, dot-com retailers-as well as an interesting hybrid-were on hand to tell how they are weathering the Internet storm.