For upscale gift cataloger Red Envelope.com, segmentation is a much more important part of their retention strategy than personalization.
During a keynote speech at the Catalog Conference in Boston yesterday, CEO Martin McClanan noted that for his company identifying sub-segments such as repeat buyers and upscale consumers is more useful than personalizing offers based on past purchases.
"Just because I bought a spa-in-a-box for my mother today doesn't mean I would respond to another spa offer," he said.
The San Diego-based company, which has 500,000 customers and has raised $70 million in venture capital, will have its first profitable quarter at the end of 2001, McClanan said.
About 70% of Red Envelope's orders are received online, with the remaining 30% coming in by phone. Customer service reps are trained to get e-mail addresses from phone buyers, so the company can work to convert those customers to Web purchasers.
The majority of the company's customer service interactions --54% --occur by phone; 14% are by e-mail and 29% by chat.
A challenge for the company in 2001 will be how to better use e-mail as a prospecting tool. McClanan said that so far, the company has only seen success in this area e-mailing to its house file.
The Catalog Conference continues through Thursday.
