May 28, 2003, 12:00 AM

Making CRM Work

(Page 3 of 3)

Chunk it

Faced with a mountain of customer data, where are retailers to start in turning it into effective marketing programs online, and ultimately, sales? Experts say factors that contribute to success include identifying key points of leverage and taking on short-term projects to start.

“Early on, a lot of retailers were trying to install all aspects of CRM across the enterprise all at once instead of chunking it,” says Raives. “We tell retailers to think big, by having a long-term vision, but start small, by quickly delivering small pieces of functionality informed by your master plan.”

On the data collection side, Kowal, whose firm specializes in CRM as deployed in web-enabled call centers, advises clients to set up a hierarchy of what they’d like to know about a customer and could get from the customer in a phone or web session. “If you don’t have the basics, get a couple of pieces of information at each interaction,” he says. “The next time you can build on that and get a little more information. So you are not overwhelming customers with requests for information, but you eventually have the top 10 or 12 things that you are going to collect. Your marketing people are now going to have a better ability to think about what that information means and how to design programs and offer products that will play off of that.”

Martha Stewart Omnimedia has done just that. Martha Stewart Omnimedia has been feeding customer data from its e-commerce, publishing, and media businesses into its Art Technology Group Inc. database for two years. “After two years of tuning our engine to perform at the highest level, we have reached maturity in terms of the technology platform,” says Raffaele Pisacane, vice president of Internet development. “Now we are able to explore some of the most important functionality that ATG provides to us.”

With the assistance of analytics provider E.piphany Inc., Martha Stewart Omnimedia has conducted preliminary cross-channel segmentation profiling of different customer groups and fed it back into ATG’s Scenario Server tool to test target marketing by customer segment. In one test, the customer data it collected in multiple channels successfully boosted online subscriptions and renewals for Martha Stewart’s three magazines, Pisacane says.

Marketers created customer segments of online visitors who were also subscribers to Martha Stewart Living magazines. Subscribers whose subscription would expire in one or two months got an incentive to renew. Those whose subscriptions had lapsed received an incentive to re-subscribe, while those whose subscriptions were about to expire got an incentive to renew right then online. “This is huge from a cost point of view because if we can reconvert our magazine subscribers using the online channel, we don’t have to send a postcard or use more traditional means of reaching them at more expense,” Pisacane says.

It’s cooking

Though the online subscription initiative is still only in test mode, “based on people clicking through the promotional content served up to them and based on the click-through rate and execution of magazine subscription and subscription renewal, we’ve been successful,” he says. “We’ve proved it can convert at a higher level.”

When Martha Stewart Omnimedia launched its most recent magazine, Martha Stewart Everyday Food, for example, 33% of subscriptions in the first month came through the Internet, Pisacane says. That’s in part because of how CRM data informed online targeting of certain site visitors. “We know (via cookies and registration) who is coming to our site. We know which customers are more keen to subscribe to the new magazine because they are coming more frequently to the cooking and entertainment areas of our site or they bought a cooking item,” he adds.

Such CRM-driven successes have helped refine the direct commerce strategy that Martha Stewart Omnimedia is rolling out this year and next. “We want to leverage the Internet channel more and more, as a way to target customers in a more personalized way using data we’ve accumulated in the course of two years,” says Pisacane. “This is a validation of what we are doing that works.”

Retailers’ CRM spending plans for this year

Increase 64%

Maintain 19%

Decrease 5%

Don’t know 12%

Source: NRF/Ogden Associates/Gartner Dataquest

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