The Lenox Group was hardly what you’d call database-poor. It had one for its catalog, another for its stores, and still another file for its e-mail addresses. The trouble was that they weren’t linked very well. And this prevented the sending of targeted e-mail.
So the gifts and housewares merchant went to Acxiom and had those lists merged into one shiny new database.
The result? Lenox now has a full view of its customers, from contact information to purchase history. And it is e-mailing smaller, more targeted groups, says catalog marketing manager Robyn Mohr.
This has paid off in better results, and in an improvement in address hygiene. But that’s only the start — the firm is also able to deploy e-mail in ways it couldn’t before.
For example, if Lenox wants to announce that it plans to discontinue a pattern — say, its Williamsburg Boxwod & Pine dinnerware — it can alert customers who registered for it.
“We’ve done that with some small campaigns here and there,” Mohr says. “We send a postcard to the customers of a discontinued pattern, and then follow up by sending a mirror e-mail to those same people, telling them they have received a piece and can go to the Website to order more.”
Another benefit is that the firm saves money on postage. Lenox will send an e-mail to announce it has a new catalog, and provide a link to a landing page. But it will mail the paper book only to active buyers.
And Lenox isn’t the only firm to link its e-mail addresses with customer data. But why the lag?
“For a very long time, e-mail was a very cheap, effective way to get your message across,” says Polly Bickel, senior vice president of strategic services at Belardi/Ostroy ALC.
But marketers started overdoing it, sending out several messages a week. And they were frustrated when they didn’t get the open rates they expected. Worse yet, they were faced with opt-outs, unsubscribes, unopened messages and tagging of their messages as undeliverable by ISPs.
So some are going back to boot camp, and relearning the direct marketing basics.
The first lesson? That you can’t mail anything you want to people just because they are customers. “Recipients want to be in control,” says Ryan Deutsch, director of strategic services for StrongMail.
The second is that customers should only get relevant messages. But how do you send a targeted offer when all you have are a bunch of e-mail addresses?
It’s simple. You have to get the databases to talk to one another — a tall order when most merchants have their e-mail addresses spread all over the company, and with a different set of vendors. They can track open rates and clickthroughs — but not contact history and sales results.
“There are great strides being made, but operations are still being handled from several databases and not a unified one,” Bickel adds.
But Bickel has seen several large apparel and home decor merchants integrate their e-mail databases into their house files.
Most marketers may be using one database to track e-mail open rates and clickthroughs. But they don’t necessarily include the contact history and results.
“It used to be that operations would send a thank-you message when a customer bought something on the Web,” says Austin Bliss, president of the e-mail service firm FreshAddress. “Now the message is generated by the customer database, and it’s an e-mail suggesting an SD card to go with the camera that was just purchased.”
Not that it’s easy. “It’s a tremendous challenge to stitch two databases together,” says Bliss. “But the payback is huge. It simplifies all of your marketing projects, and you can send e-mails based on the customer’s position at the moment, not on what they did two years ago.”
And that’s the point. An integrated database allows the mailer to segment in traditional ways. For example, some merchants are applying recency, frequency and monetary (RFM) value to their e-mail. Many are using simple product purchase history and the length of time on the file. Has the customer been with you 24 months or just three?
“The large catalogs are incorporating all this, and they can now send targeted messages to their customers,” Bickel says. “So someone who buys men’s suits isn’t going to get e-mails about womenswear.”
But experts urge you to proceed slowly. “Marketers go through the crawl, walk, run process,” says Michael Greenberg, president of Loyalty Lab.
“They will do the standard batch and blast, then some segmentation based on prior purchase, and always on recency.”
And how do you replenish your e-mail list? Bickel offers a three-step plan.
First, make sure you select a good e-mail vendor — one focused on service. “All of these vendors are capable of targeting and tracking, and all of them can provide the technology,” she says. “But they need the experience to send over daily feeds to your database. You can work with your IT department to set it up.”
Second, be aggressive about soliciting names. Start a campaign that explains the benefits of receiving your e-mail. And make an offer in exchange of that address.
“Coldwater Creek has been successful, giving consumers $5 off their order,” Bickel says. “You can also run a sweepstakes. You may not want to give away a car, but Omaha Steaks has been successful with a $100 gift card as its prize.”
But Bliss feels that giving away coupons is bribing the customer. He prefers something without a set monetary value. “Give the customer something with value — like membership in an insider’s club, advance notice of a sale, an e-mail newsletter, or a recipe,” he says. “Marketers are getting a lot better about asking for e-mail addresses, although they may not be as articulate about it,” he adds.
Lenox has had more luck getting addresses both at its store and the call center, and it has also grown its file with better hygiene. It now has 1 million addresses, compared with 200,000 in 2004.
“People are more willing to give us their e-mail address than in the past,” Mohr says. “Now they know they will receive coupons from us, or that they will hear about our sales and offers more quickly.”
But beware of invalid addresses. One client came to Loyalty Lab with a list in which 50% of the records were no good, Greenberg says. But when the client added a loyalty program, “the address quality went up. Providing an incentive to give them their address helped boost that rate.”
Don’t make the mistake of asking for addresses only online. “If you have retail stores, spiff the employees for getting their customers’ e-mail addresses,” Bickel says. “This is also something you should promote in your catalog — if not on the cover, then with a blow-in to support it.”
But what if you have bad addresses? Bliss says vendors routinely run files against e-mail change of address files. But the cost to send customers a postcard to verify an address can be “staggering.” A cheaper method is to send an e-mail to the new address and ask the consumer to confirm it.
“But you need to make it an opt-out e-mail,” Bliss says. “No marketer should ever e-mail someone who doesn’t want to hear from them.”