How Lack of Personalization Can Kill a Hurting Business

September 11, 2018 | 6 min read

lia-grimberg

Lia Grimberg

AVP Consulting Services

Thought Leadership

In my previous article entitled The Analytics Gap and How to Close It, I discussed my frustration with the analytical challenges I faced at Sears. I also mentioned that I would leave my take on why Sears struggled for another article. I would like for this to be the article.

I struggled with how to write this article for over a year. I have decided to write it from my point of view, that of Head of CRM and Loyalty. I also do not mean to lay any blame, but rather to draw lessons from my experience there.

When I arrived at Sears in July 2016, CRM and Loyalty sat on different teams, with CRM being primarily based on email and sitting with an incredibly busy Divisional Vice President of Digital and Loyalty with an equally busy VP with a huge portfolio of various businesses. All email was mass, with a sizeable database of 1 million subscribers receiving a single version of an email on a daily basis and the calendar being driven by merchandising needs and promotions.

I started by recruiting a stellar team and partnering well with the Analytics team to introduce segmentation: by gender, by style, by size (for apparel), by household composition (male, female, derived kids’ ages). Eventually, we added behavioural segmentation, creating segments like Women Engaged, Men Engaged, Kid Engaged, Home Engaged – meaning that this customer has ever purchased or clicked on one or more of the above mentioned category(ies). While we could not get to 1:1, we use behavioural segmentation, which is a good option as well. We then targeted content to only the relevant category of customer, while aligning to the promotional merchandising calendar. Additionally, we connected the two email databases (general and loyalty) and started understanding engagement levels, testing content, format, copy and subject lines, while creating a lessons learned library. We were working on reintroducing AI-driven product recommendations into the emails.

In the meantime, the business was not in good shape in many areas, including financially. I will not delve into well known details regarding this.

The average age of the email database customer was around 60 years old. Our best customers were rural and a little older than this. Sears was rebranding itself as a store for Millennials, particularly the 25 year old woman, and was making some small in-roads in that area, but in select markets and primarily in store.

We received a few new mandates in the Spring of 2017:

  • We were restricted to marketing only 20 apparel products, preselected for us
  • Emails were restricted to only 1 product per email
  • All emails were back to being mass communications
  • We received a new acquisition goal of 2M new email subscribers (Millennials only. There are only 7M Millennials in Canada period) by year end
  • We were supposed to send 2-3 emails per day to each recipient and not negatively impact the unsubscribe rate

Not surprisingly, my channel results dropped dramatically (by over 95%), but my KPIs have also changed from revenue to maximizing the number of units of the particular item advertised in the email.

Our team got as creative as possible. While we only communicated one item per email and could not target it, we leveraged content to be as interesting as possible: we leveraged ratings, reviews and complementary apparel (to make an outfit) wherever we possibly could. We did our best, but the battle was uphill: there was only so many times I can send you the same cotton t-shirt before you ignore the emails and I can only send the red lace thong so many times to an older female customer before the unsubscribes and complaints rolled in.

Even though I tried to fight this dismantling of the vision we had for CRM and Loyalty, I was voted down.

Though this was certainly not the main cause of the demise of Sears, to me, as the head of the CRM and Loyalty team, it did not endear us to our customers.

The lessons learned are clear:

  1. Find the customer and then serve the right product and don’t push the product to all customers. Personalization is key!
  2. Be true to who you are and understand/cater to your best customer versus chasing the illusive shiny bullet of the Millennial or Gen Z customer
  3. Manage the number of communications received by each customer, create an effective preference centre to understand and associated communication frequency, while keeping an eye on customer engagement and unsubscribe rates

This was a very difficult article for me to write and is still an emotional topic for me. I really wish we could have done the right thing for our customers, catered to who they were and what they wanted. I also wish we would have also stood by our associates, in particular our retirees, but alas…

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