Tired of relying on deep, blanket mass-marketing promotions to attract shoppers, specialty retailer Crabtree & Evelyn is delving into its customer database and using a new customer relationship management strategy to deliver service based on its shoppers’ needs.
“The recession forced all consumers, even those with money, to seek out deals, and it is no surprise that the retail world became more promotionally driven,” said Tom Woodside, VP marketing and e-commerce, Crabtree & Evelyn, Woodstock, Conn. “We gave away discounts for the last few years. But now it is time to deliver more targeted promotions so we are not giving away margin.”
Previously, the skin-care and home accessories chain had a rudimentary loyalty program that produced a vast amount of data. But lacking methodology, the program didn’t help the company when it came to who and where to target its efforts. The program, called Platinum, rewarded shoppers the first week of the month, regardless of when or how often they visited the store.
Crabtree & Evelyn’s new loyalty initiative is a tiered approach designed to recognize its best customers and deliver value, according to Woodside.
“We combine promotions and discounts, but with more of an element of surprise, with more indulgence-based, in-store experiences, such as five-minute massages,” he said.
The key to the program’s success was to use a CRM solution that helps the chain understand shoppers’ purchase behavior, and use data to make decisions that help the chain appropriately service shoppers. Crabtree & Evelyn added a CRM solution from Burlington, Mass.-based 89 Degrees.
The chain consolidated its marketing databases to get a total view of its customers, a move that gave the chain insight into which channels consumers are shopping in, and the offers to which they respond. Using this information, the chain can segment customer clusters and deliver the proper experiences. >
The CRM solution was rolled out in the fall, and the chain quickly used it to understand shopping patterns and deliver holiday campaigns in November and December.
“We generated three times the capital we invested in the solution, as well as increased incremental volume,” Woodside said.
The retailer began transitioning its email database to the solution in January, and by spring the solution supported another campaign. It is currently integrating the solution to the new loyalty program.
“We are adding a new point-of-sale system that will allow us to trigger promotions based on customer behavior,” Woodside explained. “The new technology will be available by the fourth quarter, and by providing their loyalty card or telephone number, the shopper will instantly be recognized.”