According to Ed Bachrach, CRM started at his company in the late 1890s when his grandfather visited farmers to give gifts to their wives and encourage them to visit his store in Decatur, IL.
And that friendly spirit has survived at the company, which now has 54 retail stores in 20 states. Customers, both mail order and retail, often ask for specific people when they call, and Bachrach is happy to oblige them despite the drag on ROI. "I call CRM what they like at the store level," he said during a session at Chicago DM Days & Expo.
But not many companies have achieved such warm and fuzzy relations with their customers. Take Bally Total Fitness, which has over 400 clubs and four million active members.
"We have not done a good job of managing the relationships," admitted Winfred Clark.
Part of the problem is that a fitness club is an in-person experience. Direct mail programs are of limited use, especially when they communicate that all the company wants to do is sell something.
"At end of the day, it’s almost like throwing money into the wind," said Clark. "The money would better spent making sure the person at the front desk says good morning, which is not always easy."
But the firm is trying to cozy up to its customers.
Bally, which generated $50 million in revenue last year online, is e-mailing daily fitness tips—probably "a couple of hundred thousand people every day getting a message from us that isn’t trying to sell them anything."
And Bally is working harder to get at relevant data so that it knows more than what the customer has purchased, and it is pursuing its Web imitative. But Clark is worried that "the warmth may gone" in the online environment. "We haven’t gotten funding yet for people on phones to support the Web imitative," she said.
Barry Pace, the women’s apparel chain, is also trying to relate to its customers.
Lori Krzyewski, who joined the firm six months ago, said that Pace, like other companies, must move beyond purchase behavior and "die-hard demographics" to get inside the consumer’s head.
"What does she think, what is valuable to her, how does she perceive your brand?" Krzyewski asked.
She added that it is easy to ignore what the customer is saying.
"We hear it, and then say, ‘That’s not what she wants and who she is. She’s really younger, hipper and thinner."
But even the best CRM practitioners face challenges. For example, Bachrach mails roughly 8 million catalogs per year, but "we haven’t figured out how to mail something effectively to customers that doesn’t give them a deal," Bachrach said. Coupons tend to be mailed to the better customers so that, "in effect, they become a reward. It’s according to ability, not according to need."
That price is also important online. The Web site is now 4% of the company’s business. "If we refresh the clearance offers, we can do a hundred grand in a day," Bachrach said.
Any other pearls about how firms should treat customers?
"Anything you do for them they love," Bachrach said. "We rarely commit errors of commission, only errors of omission.
One more thing: Don’t get into sweats about technology.
"The technology in boxes will never replace the technology between our ears," said panel moderator Francey Smith.
