PRIMEDIA Business Magazines & Media Inc

Baby Steps to CRM


Direct, Mar 1, 2001

From a crawl to a walk at

After nearly 40 years in business, Cotton Time has accumulated considerable wisdom about selling kids' products. The Secaucus, NJ, distributor delivers infants' bedding, pillows and other soft goods to more than 500 specialty stores nationwide, and pulls in an average annual revenue of $15 million., Cotton Time's relatively fresh-faced offspring, however, has been largely on its own as it toddles into the online direct-to-consumer world. “The [environment] is very different,” says the two-year-old site's president and CEO Jack Kiefer. “There's no salesperson out there to say what the [parents'] lifestyle is, no one to say what's selling well in the South or the East.”

Without that kind of information, Web sales were flat, conversion rates were low and the potential for cross-selling and upselling were virtually nil. Existing data, which was received in e-mail orders, was essentially a heap of toppled building blocks. “We couldn't make recommendations,” says Kiefer. “We couldn't relate past purchases to new ones.” But in the past six months, the site — which sells everything from bedding to hard goods, such as strollers and playpens — has taken its first big step toward customer relationship management goals.

Working with ResponseLogic, a New York-based digital marketing technology and services company, leveraged the unremarkable ZIP code into a personalization tool using the ADAPTe marketing software suite.

“We noticed that certain regions bought certain products,” says ResponseLogic president and CEO Jim Scott. For example, in Manhattan, a majority of customers gravitate toward the high-end Italian baby carriage, so now when they enter their ZIP code, they're instantly shown the stylish Perego brand. In the Midwest, buyers prefer a more utilitarian product that travels well, so that's what they see first.

Although it's too early for hard numbers, Kiefer says the ZIP code rule is working. A particularly serviceable stroller that doubles as a car seat didn't sell in the 18 months prior to ADAPTe's installation. But the past few months have been a different story. “We've sold the hell out of it, and I'm sure it's because we recommended it,” Kiefer says. “Out of every 10 we've sold, seven go to Colorado.” Kiefer says cross-selling, too, is picking up, judging by an increase in repeat purchases.

He's moving slowly on implementing CRM because he wants to evaluate each technological phase. Other nascent measures include a retention-driven greeting strategy; first-time customers who spend over $250 receive an 8% discount. A second purchase earns 10% after $500 is spent. A content-based newsletter is in the works and will contain product-recall information as well as parenting tips.

Kiefer's plans for the near future include being able to identify all customers who abandoned their purchases midstream. “I want to be able to say: ‘Give me all the carts that were dumped,’ and then follow up with an e-mailed incentive,” he says. In the longer term, Kiefer intends to offer users collaborative filtering in a manner similar to the model. “Right now we don't have the method to do it, but we could say: ‘People who have bought this car seat have also bought this headrest.’”

Ultimately, Kiefer simply wants his customers to have a better experience. “Having a baby is an intimate and personal time,” he says. “We are, in a sense, participating in the event. We want to be respectful of that, and create an intimate and personal environment.”

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