At the 11^th Annual CRMC, Dianne Binford, then Vice President of Multichannel Marketing at Nine West/Jones Apparel Group, and Ed Henrich, President of Henrich Enterprises and formerly president of Yesmail, showed the conference audience how they took an non-automated, multichannel email process for one brand, and turned it into a seamless, automated process for 11 brands.

To begin the presentation, Dianne gave an overview of the Jones Apparel Group brand portfolio for the audience. Encompassing three of the top women’s fashion footwear brands in department stores and four of the top nine footwear brands--- Bandolino™, Easy Spirit™, Enzo Angiolini™, and Nine West™--- Jones Apparel Group also has several ready-to-wear brands including Jones New York™, Kasper™, Anne Klein™, Gloria Vanderbilt™, and more. The ones listed above are consumer-direct brands, with company-owned channels of operation.

For the purposes of the presentation, Dianne explained to the audience, she and Ed would be focusing on the Nine West and Easy Spirit brands, as they both have their own eCommerce websites, full blown postal and email programs, specialty stores, and multichannel marketing strategies. Dianne then explained to the audience what would be covered during the presentation: First, performance metrics as they relate to the emails; second, what the emails look like and why they look like they do; third, an explanation of the integration of data and processes, including challenges and the program that was built around them; and finally, a brief look at the analysis that surrounds multichannel dynamics.

 

I. Performance Metrics

With list growth of an email program, the deliverability and open rate can often plummet, however for Nine West/Jones Apparel Group, these rates are still higher than the retail industry standard. While the open rate definitely declined with the list growth, the click-through rate is much less affected by the growth, and here the Nine West Group average is still four times the industry standard. Additionally, the purchase rate is not adversely affected. As Dianne explained, these metrics are the results of the three rules of email marketing--- often repeated but nonetheless important:

ü       Personalization

ü       Relevance

ü       Infrequency

 

II. What the Email Looks Like

Easy Spirit:

Dianne used an Easy Spirit and a Nine West email to explain the personalization aspects of the different versions. For Easy Spirit customers, size and width is a big issue, so email graphics are designed according to the customer’s size and width, which is inferred from both their transaction history and/or the preferences they have set for themselves on the website. The customer receives an email about a new line of sandals, for instance, and when she clicks she is directed to a landing page where she can view all the sandals that come in her size and width. She can count on the fact that the email will only show what styles are in her size. If her size is a 9 double-wide, there may be a smaller selection of styles in her size, but nonetheless, she knows that what she is looking at is something that she can wear comfortably. Furthermore, on every email there is a link to a page where she can edit her profile, so she always has the control to change her preference settings or what may have been inferred from her previous transactions. 

Nine West:

Unlike in the case of Easy Spirit, whose emails are customized according to size, the Nine West emails are customized in other ways, including the types of discounts and special offers they receive. For example, regular customers might receive an email with a 10% discount incentive, while VIP customers might receive a 15% discount. VIP customers are reminded of their free shipping privileges, and so on.

Size/width and discount offers, however, are not the only ways that the emails are personalized. Because they can be customized at the individual record, each customer can receive a different offer with different styles, different copy, different subject line, extra banner ads, etc. etc.

But, as Dianne pointed out, “it’s what happens below the fold that is really important…where much of the personalization comes into play.” And, as Dianne explained, much of this personalization is related to regional messaging, and the customer’s relationship to the store at which they shop. “We are adamant about getting the store name and phone number in the email, always finding a way to insert it in some way: by offering a coupon to redeem at their store, letting them know about a new store opening in their area, a special event going on at their store that weekend, a remodel, or simply telling them that they should visit their store.” Once a purchase is made, the customer receives a ‘thank you’ email--- by store name--- in her marketing email.

Again, as in the Easy Spirit email preferences page, there is always a link to a page where the customer can update her profile. Different types of information about the customer can be used to get this information: purchase history, area code, etc. If there is no regional data available, she is invited to click through and add her street address in order to start receiving region-specific event, promotions, and other information.

“Of course,” added Dianne, “store buy-in is very important, and once associates realize that a customer who is receiving emails visits the store much more often, this can be accomplished.”

 

III. Data Integration

Challenges

“None of this has been easy,” explained Dianne. “We have been doing this since our email program launch in October of 2000, and it has always been a tremendous amount of manual effort. Merging address and email, knowing a customer across all channels, pulling together her preferences across those channels, understanding her store transaction as well as web transaction history, her call center interactions, website and email preferences, finding the missing data and filling in the holes, and understanding her lifetime value across channels….it really is a big task.”

“…And the point of all this is, unless you are connecting all the dots, then you aren’t really seeing a 360° view of your customer. Without it, even your basic RFM and category analysis is skewed.”

In the middle of all this is the brand itself, and the customer’s relationship to it. “Whether or not is can be measured, tracked, or understood...the fact remains that for the customer, the brand remains at the center. Be sure to communicate the same brand message across all channels, and avoid discontinuity which can quickly and adversely effect brand perception and therefore, customer satisfaction,” Dianne added. A good way to maintain a consistent brand message is to have everyone review everything that goes out to the customer; involving everyone in the process helps to ensure that the customer can find her 360° view of the brand.

Why is multichannel important?

Thinking about your customer holistically--- and realizing the amount of messages she receives from more and more channels, and the different channels from which she is now making her purchases--- becomes more important every day. Multichannel integration and an understanding of how your customer behaves across all channels, enables marketers to measure what happens, model what happens, and finally, change their customers’ behavior.

As a former engineer, Ed likened the process of multichannel marketing to cruise control. The input is the gas pedal and the output is the speed. The job of a cruise control system is to maintain the speed by measuring the speed every second and adjusting the gas pedal up or down, depending on if the car is moving too slowly or too fast. “It seems simple, but it is actually a lot more sophisticated than what a lot of marketers do.” To further explain, Ed lists the levels multichannel integration as follows:

1. Freshman: The marketer measures web revenue at the end of each campaign. Offline revenue resulting from the email campaign is not tracked. The following week the offer is modified based on what the marketer learned the previous week. “Unfortunately, one-third of the industry is still at this level, despite low cost availability of systems to take marketers to the next level.” The control mechanism is basically, ‘I did well today so I’ll do the same thing tomorrow.’ Here there is no Cruise Control; you don’t really even know how fast you are going.
    

2. Sophomore: At this level, the marketer is able to measure each individual customer’s response and website purchases. Future messages are modified and offers are targeted based on individual profiles. The content can be improved for the next campaign. Unfortunately, this overlooks how email is driving response (speed) at stores.
    

3. Junior: At this level, marketers are measuring the impact of email on store purchases, but on an infrequent basis. Rather than track every campaign, only certain campaigns are tracked through a promo code initiative, so occasionally the marketer can validate the model for offline purchases. However there are no ongoing systems in place to measure on an individual level, by campaign. Here, a truly constant speed can’t be maintained.
    

4. Senior: Sophisticated, relationship-driven messaging, specifically, the ability to measure what customers buy online and tie it in with what they buy in-store…which, in the case of Nine West/Jones Apparel, greatly increased their customers’ spend in the stores. This is Cruise Control!

The Nine WestJones Apparel Group Program

As Ed explained to the audience, “Dianne is the innovator; we are just there to make sure it all works. Basically we just automated an existing process.” However, the task was daunting, and data integration was the biggest challenge. An April 2005 Jupiter survey asked email marketers what their biggest challenges were, and for those with over 50 million in revenue, the number one answer was data integration, followed by email address churn and the declining response rates in the industry.

For Dianne, the most important part of the task was making sure the data was:

1. In the right place

Ø       To do this, a private email change of address database, in conjunction with all of the Jones Apparel Group brands to find the best email address with which to communicate, was built.

2. Actionable

Ø       To avoid declining response rates, the data had to drive relevant messaging.

 

IV. Data Processes

Automating the Process

Prior to the implementation of the automated program, Dianne had a full time, senior person simply prepping the data. Then, with sudden changes in the company structure, Dianne and her team became responsible for seven brands. The issue became a much more compelling economic problem with the addition of the new brands, and something had to change.

With the implementation of the new program, improvements in the process were immediately seen. First, the valuable senior person who had been distracted with data prep was now free to perform and leverage data analysis. Also flawless execution was instantly measurable, and the numbers of valid email addresses immediately increased. The automated process made timely, and more dependable, deployment possible because every record on the database was now constantly loaded with the data elements that drive the customizations. No more cases of “the file’s not ready.” Plus, with multiple brands combined with the increasing numbers of different emails that customers are using, and innovative email scoring system was put in place that provided an internal email change of address process. Finally, and most importantly, they were able to roll out the process to the rest of the brands who were “practically chomping at the bit” to get in on the action.

Premise to Success

1. Process all data
2. Get the right data in the right place
3. Reconcile the website data with the POS daily, including data transfers from the store
4. Constantly measure web user data, especially subscribe and unsubscribe (this is especially important to find the right email with which to communicate)
5. If an email bounces, continuously cycling through to find the best email or alternate email address

 

V. A Look at Multichannel Analysis Dynamics

For the last portion of the presentation, Dianne took some time to paint a vision for what she called “scenario analysis”….explain different scenarios to the audience, and different ways to look at them.

1. Email is not delivered = Bad
2. Email is not opened = Bad
3. Emailed is opened but not clicked through = Is this really bad or not?
4. Email is clicked through but no purchase is made = Or maybe you didn’t track it!
5. The dreaded abandoned shopping cart = Is this really bad or not?

Once your integration, customization, tracking methods, and analysis becomes more sophisticated, you will be able to tell if, for instance, she opened the email but went back to the website (or the store) three days later and purchased even without the coupon that was in the email.

The idea is to segment by relevant “scenarios” and then figure out how to optimize each scenario. For example, how can you make emails more relevant to store-only shoppers vs. web-only shoppers? What will make the email (or even the website) more relevant to email recipients who browse the site and then purchase at the store? Is there one way to improve open rate for store-only shoppers that is different than for web-only shoppers? Do low click-through rates amongst store-only shoppers mean something different than for web-shoppers? And are abandoned shopping bags actually a positive response metric amongst store shoppers?

There are a lot of dots to connect, and the more connected purchase data through each channel becomes, the more you can learn about the customer’s cross-channel behavior.

At Nine West Group, 75% of revenues from email recipients come from store purchases even though most of those people subscribed to an email on the website; if that’s the case for you and you’re not connecting purchase data from both channels, then the analysis simply isn’t there.

Most marketers have some mechanism in place to measure multichannel behaviors, so join the varsity team by analyzing and acting on that data, and enjoy the benefits of a true multichannel, 360° view of the customer. The main benefit is the profitability of giving your customer a 360°access to your brand!

Would you like to learn more from CRM pioneers like Dianne and Ed? Plan to attend the 12^th Annual CRMC, this June 14-16, 2006 in Chicago. You will hear from Bath and Body Works, Best Buy, HSBC, Polo Ralph Lauren, Pottery Barn, Stage Stores, and many more at this unique event. Register here: https://secure.bcentralhost.com/loyalty.vg/registration.htm.
 

Dianne is now SVP Retail Markets for Harte-Hanks, the premiere provider of data-driven marketing services and products. She can be reached at Dianne_Binford@Harte-Hanks.com.

Ed is now President of Henrich Enterprises, helping clients turn data into insight through web abalytics consultation. He can be reached at Ed@Henrich.biz.