Present Perfect
Things Remembered leverages an integrated channel strategy to match the customer to the occasion Terry Mulhern,
vice president of marketing Photo: Michael Foley/Rycus Associates Photography
May 2006
By Irene Cherkassky
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What started as a key kiosk in a shopping mall parking lot has grown into a nationwide enterprise with approximately $300 million in sales, more than 650 retail locations and some 7 million active customers on file (another 8 million customers make up its customer archive). Specializing in personalized gifts for all occasions—everything from wedding and baby gifts to plaques, awards and holiday-related items—this marketer has enjoyed solid growth for the past three years. Its Web channel alone has grown more than 40 percent year-over-year during the same time frame.
At the heart of this growth is a constant exchange of knowledge between the company’s three channels—retail, catalog and Web—supported by its powerful multichannel database. Knowing which customers are buying when and why has enabled Things Remembered to create effective, integrated marketing efforts highly in tune with customers’ gift giving needs.
Information Central
“We’re kind of different, because we’re in the gift business and we’re occasion driven,” says Terry Mulhern, vice president of marketing for Things Remembered. “We’re not trying to find the right offer for the right occasion; what we’re trying to do is find the right customer for the [right] occasion.” Knowing which customers are most likely to buy for a particular celebration or holiday, then marketing the appropriate offers to those customers is the essence of Things Remembered’s strategic approach. It’s not surprising then, that the backbone of the marketer’s operation is its customer database, which serves as a repository of all relevant customer and campaign-related data. All three channels feed into this central database. “We capture more than 80 percent of our customer names and addresses at retail,” says Mulhern.
Data collection starts during the gift-order process, when customers fill out a work order, including their name and address. E-mail addresses also are gathered at point-of-sale. The goal for e-mail capture at retail is 25 percent. Similarly, customer information is gathered via telephone orders and the Web site. Each night, the data is pulled via a legacy point-of-sale system through to the database where it is cleaned, householded and deduped. Things Remembered’s promotional planning and tracking information also is linked to the database. “For any particular customer, I see what promotions we’ve sent them [and] what they respond[ed] to,” describes Mulhern.
What’s the Occasion?
To leverage customer information gathered in the database, Things Remembered takes a multitiered modeling approach that turns raw data into actionable contact strategies. The models take into account a variety of factors such as: for what occasion the customer has purchased a product; key Things Remembered customer segments; whether customers are part of the company’s loyalty program; as well as propensity to both buy and respond.
Maybe the most valuable piece of information gathered is for what occasion the customer has made a particular product purchase. That bit of detail is vital because, “we can dig down to the SKU level and find out which SKUs are being purchased for what occasions,” says Mulhern. “For example … I can look by SKU [to see] what were the hottest SKUs for Valentine’s Day, so when we develop our marketing pieces around these specific occasions, we know which items to feature.” He adds, “Our product is our offer. [This] gives us a precise measure of what the right offer is; the right product for the right occasion to put in front of the customer.”
Know Your Customers
Also essential to the Things Remembered modeling process is understanding how its customers fall out within its key customer segments: wedding, business and general consumer. The wedding segment represents approximately one-third of the marketer’s business. The wedding date is the key piece of information that shapes the contact strategy for these customers. Wedding dates are gathered through partnerships with other online retailers, outside lists, a wedding sweepstakes Things Remembered runs, as well as wedding shows. “That marketing effort really begins six months before the wedding,” says Mulhern. “It’s an alternating strategy of e-mails with the direct mail to drive them into the stores and [onto] the Web.” These customers also receive a wedding catalog four to five months prior to the big event.
The business segment makes up the smallest segment of Things Remembered’s customers, at 16 percent. It is, however, a very strong core group, according to Mulhern. “We want to keep them happy, so it’s more of a retention strategy within that segment,” he says. Since the majority of business customers are smaller-sized businesses, there often is a lot of cross-category shopping. “Our business customers tend to shop not just for business, but for occasions as well,” notes Mulhern. These folks are sent catalogs approximately three times a year: the first of the year, spring and the end-of-the-year holiday season.
Even so, Mulhern points out that his first priority is to boost retail sales rather than catalog business. “My goal is to drive footsteps, not to get someone to pick up the phone,” so the catalogs are less traditional in design, with a greater focus on what’s new and different at Things Remembered. “Our plan this year is 90-some percent [of sales] will be from the stores, the other 10 percent will be a combination of our Web and catalog buying.” In fact, Mulhern notes a huge overlap between Web and catalog business, so much so that the company looks at these two as one channel.
By and large, however, it’s the general consumer segment that makes up the bulk of Things Remembered’s business. This segment benefits most from occasion-specific modeling.
Because buying is so occasion-specific, the marketer will run distinct models for these different events, as well as for each of its customer segments. During the spring season, for example, that includes models for Mother’s Day, Father’s Day and Valentine’s Day. “These models are based on prior history of those mailings,” says Mulhern. Of course, product-level, channel-specific and offer-specific information is factored in to find who is most likely to respond to a direct marketing effort.
Another important element factored into the models for each of the three segments is whether a customer is part of the company’s loyalty program, called Rewards Club. “The development of our loyalty program just three years ago has really helped us focus on the right customers to market to,” says Mulhern. “We may have two customers in the database who look the same as far as their purchase history, but the one in the Rewards Club program behaves very differently. Just by them raising their hand and saying I want to join the program makes them a better customer and targets our mailings much better.” Details such as when a person joined Rewards Club and how many times she has purchased since becoming a member, help to target the populations even more effectively, according to David Braunstein, director, consultative service for Central Islip, N.Y.-based MBS. “The goal of the models is to find the right folks to respond to a specific occasion, and then we use a multichannel strategy to contact them,” he explains. The database management company has provided outsourced marketing database services, data processing and analytics to the gift marketer since 2001. Prior to this relationship, Things Remembered relied on list selects based on relatively simple RFM data, according to Mulhern.
Will You Respond?
A little over a year ago Things Remembered expanded its modeling to determine both propensity to spend, as well as the proclivity to respond to a marketing effort. Understanding how its customers fall into these dimensions allows Things Remembered to drive top-line sales, store traffic or any combination thereof, depending on the marketer’s goals for a particular campaign. Braunstein points out that “a person can be selected for only one mailing, even though they went into three separate modeling exercises.”
When all the data analytics are done, the layered models guide how many times and the combination of direct channels through which a customer will be contacted. “If you’re a certain tier of customer, we may want to have three contacts with you through the spring season,” explains Mulhern. “And then based on how your name models out, you may get a spring catalog, a Rewards Club promotion and [a] Mother’s Day [piece]. Someone else in that category who models differently may get three different pieces.” Those who are part of the Rewards Club will receive additional contacts, either via direct mail or e-mail. Mulhern sums up, “The best strategy that we’ve come up with is to make sure we’re not looking at each individual model separately; that we’re looking across the spring season and try[ing] to figure out over that season who we should contact and how often.”
All Together Now
Once the combination of direct marketing touches and offers is determined, it’s pushed through in a synchronous and coherent manner across channels. This past Valentine’s Day, for instance, the marketer ran a 20 percent-off promotion on any gift with a heart motif in its stores. That promotion also was featured in its direct mail pieces, in the store windows and in its e-mails. “There’s one unified Things Remembered offer, promotion, look, feel, color scheme [that’s] consistent across the Web [and] the retail chain,” as well as direct mail, says Mulhern.
In fact, to ensure online promotions are synchronized with all other channels, approximately a year and a half ago Things Remembered undertook an important Web upgrade. “Our Web site didn’t have the promotional functionality that our stores did,” says Mulhern. “We’d have customers coming in the stores expecting the same offer to be available, so we really ran into issues there. We spent a lot of time, effort and money making sure … they work in conjunction.”
However, marketing via e-mail and online does require a slightly longer lead time for promotions, primarily due to the extra time required for shipping when customers order via the Web site. During holiday events such as Christmas, there generally will be two different e-mail campaigns: one targeting a retail-centric customer with messaging that has just a few days’ lead time, while another may focus specifically on a Web customer with messaging such as, “You’ve got a week to shop on the Internet.” Depending on business needs, “sometimes, we may just have a combined e-mail that can integrate both messages and send it to the whole e-mail database,” says Larry Wiseman, director of e-commerce for Things Remembered.
Gaining Strengths and Synergies
The synchronous channel approach is the result of active collaboration and cross-channel planning at the corporate level. “From a communications standpoint, there are a couple of ways that happens,” Wiseman describes. “I sit in the weekly executive sales meetings, and in those meetings we talk about the last week in all the channels, so I hear what’s successful in the stores last week, as well as what their challenges are. They hear the same from my channel, and then we often take that information and try to use it in the store.” One such example is a recent, successful presentation of birthday products at retail, elements of which were then adapted to boost the performance of online birthday product sales, according to Wiseman.
Meanwhile, the retail channel—which is skewed toward a repeat customer base—is looking at Internet methodologies for attracting new customers as a way to garner learnings on how it, too, can drive a new customer base to its stores. And, of course, there are continuing efforts to drive retail traffic via e-mail offers. One successful program leverages customer information gathered at retail point-of-sale to both drive store traffic and build the marketer’s e-mail database—now a million customers strong. In this case, Things Remembered sends those customers who provided an e-mail address a welcome e-mail for $5 off the recipient’s next purchase.
As well, customers always are encouraged to shop across channels. Wiseman notes, “In all of our campaigns, whether it’s a direct mail piece or an e-mail campaign, or what have you, we always promote three channels: we promote the store, the online Web site and the call center, so [customers] can choose which they want to fall into.”
Going forward, the marketer hopes to start in next quarter’s promotions testing what drives customers from one channel to another, according to Mulhern.
It’s also taking advantage of emerging Web channel strengths. “Our merchandising strategy is changing for the Web,” says Mulhern. The company is taking note of what products are doing better online and adjusting accordingly. Likewise, the company plans to expand its capabilities to target and segment its Web and call center customers, to be able to direct specific offers to them. Consider all of this better direct marketing a gift from Things Remembered to its customer base.
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