360 Degrees Is the Best View Into the Customer by Customer 360

1TO1 IMPACT AWARDS

WINNER >BATH

JANUARY/FEBRUARY 2007

AND BODY WORKS

CATEGORY: TECHNOLOGY OPTIMIZATION >CUSTOMER SERVICE

360 Degrees Is the Best View Into the Customer 1to1® Magazine’s Impact Awards annually honor end-user organizations whose customer-based strategies create business impact. This year’s distinguished panel of independent judges evaluated finalists on the implementation and results of strategic customer initiatives in three categories: Customer Strategy, Organizational Transformation, and Technology Optimization. The Technology Optimization category covers such a span of technologies that to even the competition we split it this year into four subcategories: Full-Suite CRM, Marketing, Sales, and Customer Service. Bath and Body Works was honored in the Technology Optimization Service category.

Bath and Body Works is a $2 billion business with 94 percent brand recognition. How many ads does the company run to have such a high level of success? Zero. Its strategy is to build brand advocates and encourage positive word of mouth with great products, and more important, a top-notch customer experience.

store operations. “And it’s really allowed the organization to be more aligned on where we need to go with the customer proposition and the value we bring to the customer.”

Turning Point For Bath and Body Works, the turning point was a change in strategy. Initially Bath and Body Works implemented the technology “to play defense,” or, to be regulatory compliant with the FDA and other governing organizations. The CRM system was primarily used to manage the complaint process. “We knew that we could expand on the data collection and the trend analysis, not only from a product perspective but also from a service perspective,” says Pati Crowley, director of customer experience for Bath and Body Works. “We had to evaluate what were the offensive opportunities within the technology as well…. When we talk about playing offense, we were building a voice of the customer strategy. Our goal was to really ensure that we were looking at our customer with a 360-degree view.”

Last year the company added a full-service Web site and a catalog to its 1,550-store retail channel. Along with these new touchpoints came the strategy and technology to provide a consistent experi-

Using ePowerCenter, the company instituted voice of the customer

ence and a holistic view of the customer. The company wanted to

surveys in spring 2006. At the end of a call associates engage

think big but act small with customers, no matter what channel

customers in a survey, “although it is so conversational that they don’t

they use. A multichannel customer is worth three times a single-

realize it is a survey,” Crowley says. The questions are designed by

channel customer, so strengthening that relationship is critical to

Bath and Body Works’ market research team, and deliver real-time

long-term success.

customer feedback about such topics as store design, a product

“Our goal was to ensure that we were really looking at our customers

launch, or a selling initiative. Each week may bring new questions.

in a 360-degree view,” says Pati Crowley, director of customer experi-

“This insight provides the brand the highest level of real-time quan-

ence for Bath and Body Works. “If you just have software and you

tification possible and ensures a 360-degree view,” Crowley says.

don’t have a defined customer experience and customer strategy with

Crowley and her team can track customer feedback, as well as

it, you’re probably going to save money, but you’re probably not going

report and analyze in-depth customer trends. Contact center

to drive top-line sales and really have a revenue argument.”

employees also now have access to detailed, integrated customer and

Bath and Body Works worked with Astute Solutions to implement

product information in a knowledge management system that allows

its Web-based CRM solution, ePowerCenter, to get that 360-degree

them to answer almost any customer question immediately. For

view. “It has really driven tremendous value in integrating the

example, agents can quickly respond when a customer calls asking

customer into everything we do,” says Sharon Leite, vice president of

what ingredients are in a certain product.

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January/February 2007

The company knows technology isn’t enough—contact center

Works publishes a toll-free number on every receipt, inviting

agents contribute significantly to the customer experience, so each

customers to call the contact center with comments or questions.

agent is trained just like in-store associates. In addition, they partici-

Crowley estimates that more than 62 percent of call center calls are

pate in the P.A.C.E. (Productivity, Accuracy, and Customer Experience)

driven by that access. In addition, employees can track purchase and

performance review matrix. Agents are monitored and measured on

visitation trends.

such indicators as customer satisfaction and first-call resolution,

“We were very underdeveloped from a reporting capability, so once

and conduct self-assessments about their delivery of the customer

we got the engine that this technology provides, it really advanced

experience. There is also a “voice of the associate” program to gain

our credibility within the organization, not only from a qualification

internal insight on how to be more effective as an organization. The

but a quantification perspective,” she says. “And it really helped us

results are delivered to the executive committee and owners are

measure changes in loyalty, and understand the correlation between

assigned to correct and streamline the process.

customer engagement and profitability.”

Employee empowerment is a big part of Bath and Body Works’

Bath and Body Works has seen some impressive results from its

strategy. Agents are empowered to solve a customer’s problem with up

technology optimization. From an efficiency perspective, the contact

to $25 per call. “We call it ‘reason to return’ strategy—if a customer

center exceeded $32 million in sales generation and cost reduction in

had a pain point, our goal is to put them back in the store and to

2005. On the customer side, customer satisfaction in the call center is

change whatever that experience was,” Crowley says.

94 percent, and its compliment-to-complaint ratio runs 20 to 1. First-

There was a mentality that the strategy would lose the company money. But in reality, when agents give coupons or other incentives,

call resolution is 90 percent. Employee turnover is only 5 percent, and the employee promotion rate is 45 percent.

that customer ends up spending twice the company’s average dollar

Four years ago the contact center was considered the complaint

sale. “And in the more egregious situations we issue gift cards, and

department. “We’ve really changed from that,” Crowley says. “The

even those have a profit value to the organization,” Crowley says.

contact center has to be part of the brand, be considered a brand asset

“The financial department scrubbed the numbers three times because

and part of the overall strategy.”

they honestly didn’t believe it. And for this reason, we are not bound

Bath and Body Works’ strategy is certainly considered a brand asset.

to a monthly budget in terms of customer goodwill.” That drives

Its success has led to plans to roll out similar customer-centric efforts in

customer advocacy and positive word of mouth.

other Limited Brands companies, such as Victoria’s Secret and Express. Says Leite: “We’re the beta for the brand.”

Creating a 360-degree view The company is also using ePowerCenter to track customers’ reactions to its in-store experience. Stores change product placement and décor every three weeks. The company previously relied on market research

1to1 Impact Awards Winners ®

Wachovia | GE Capital Solutions | Astra International Bath & Body Works | Ring Bros. Marketplace | Ingram Micro

and anecdotal information to judge its success. Now Bath and Body

1to1 Impact Awards Judges ®

Kerry Bodine Principal Analyst, Customer Experience, Forrester Research Kevin Cantwell President, Big River Telephone Kim Collins Research Vice President, Gartner Sheila Dunn CRM Director, UPS Paul Greenberg Author, CRM at the Speed of Light

Gareth Herschel Research Director, CRM Analytics, Gartner Sheryl Kingstone Program Manager, CRM Strategies, Yankee Group Kay Lemon, Ph.D. Professor of Marketing, Carroll School of Management, Boston College Robert Morgan Professor of Marketing, University of Alabama

Brynn Palmer Director of the Customer Experience, Charter Communications Daniel Pink Author, A Whole New Mind Denis Pombriant Managing Principal, Beagle Research Jennifer Rosenzweig Senior Director, Global Practice Leader, Carlson Marketing Worldwide Martin Schneider Analyst, The 451 Group

Alex Slawsby Co-president, MIT Innovation Club Michael Thomas National President, CRM Association Mike Trotter Executive Director, Center for Customer Driven Quality, Purdue University Jon Voiskul Director of Global Relationship Management, Amway

a division of Carlson Marketing Worldwide