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May 15, 2002

CRM That Sells (or Not): Parnell Woodard on Seagrams, Gateway &

SUMMARY: No summary available.
Parnell Woodard, CEO Emerge Partners, Inc. ( is one of the Nation's leading consultants on relationship marketing (RM) and customer relationship management (CRM).

His 14 years of experience include serving as Global Director for Interactive and Direct Marketing at Seagram Spirits & Wine Group; as well as leading relationship marketing programs for GM Canada, Buick, and Gateway Computers.

QUESTION: The term CRM is used so broadly these days that people are confused about what it really is. Can you describe what relationship marketing and customer relationship management mean to you?

WOODARD: First off Iím glad you said it right. People refer to CRM the wrong way too many times and this has really caused a lot of difficulty.

Essentially the principals of relationship marketing and CRM are the same. They deal with identifying customers and building communications and relationships in order to build loyalty.

For example, in spirits marketing, as well as with consumer packaged goods, itís not uncommon to find a disproportionate percentage [of consumers] driving the marketing. Using CRM you identify with this [percentage] and know how to build relationships with them [rather than engage in broad-based marketing efforts].

QUESTION: How much do marketers need to learn about CRM technology?

WOODARD: Todayís relationship marketer has to be somewhat knowledgeable about emerging technologies. It enables a better relationship marketing strategy and execution.

But they donít have to be a technology person first and a marketer second. They should be a marketer first and foremost. See how [the technology] provides you with a competitive advantage.

Without an understanding of the technology, relationship marketers donít always ask the right questions. They wonít factor in that you can measure more things, like in email with open rates and page views. They need to understand the value and without that you can draw incorrect conclusions. Maybe your email campaign did work, but you are not looking at the right things, like if you donít know someone spent 20 minutes at your website [after seeing your email].

Your traditional direct marketing agencies have not embraced CRM products. They still focus on direct mail and some email, but there are a number of other tools like sales force automation products. The big thrust in relationship marketing is driving down costs per qualified lead. Relationship marketing tools can help a marketer determine where a customer is in the sales cycle.

QUESTION: What are some of the most successful CRM efforts you have been involved with and why did they work?

WOODARD: Iíve done a lot of direct marketing work. There are only a couple of efforts that really started to make a commitment to relationship marketing. Gateway, for one, understands the importance of the consumer and loyalty. They will recognize that for a long time.

Seagram is also long ahead of its time in terms of building its consumer database. They had the foresight to learn how to do it back in 1985. The mindset in that space was at the time was let the stores and the distributors build the relationship. Seagram wanted to build the relationship. They realized a small set of consumers control a large portion of the sales volume. Seagram had the vision to say, we need the relationship with the customer and not the stores or distributors. The establishment of the Glenlivet Society is perfect example.

Through direct mail [Seagram] was able to build a community of single malt drinkers. The change in consumer behavior is noted and heightened levels of purchase intent and brand awareness were significant. We saw recalls of six weeks to two months out. The average recall for a TV ad spot is 24 hours. Seagram continued that effort to Internet. They have memberís only areas online, they use email, etc.

QUESTION: In the same right, what has not worked and why?

WOODARD: Yes, I tried to work with them at one time! [During a brief stint at Organic].

The company tended to focus on coolness and not the customer. Management of customer relationships did not work. They did not fulfill on any of their promises. The business was not driving what they were doing. We tried to help them focus on the customer and relationship and it just didnít resonate.

QUESTION: What was the greatest challenge working with Gateway and how did you overcome it?

WOODARD: When I started working with Gateway on the Your Ware program it was the beginning of them thinking about relationship marketing.

Their original model linked their TV buys to sales. They felt that model alone was strong enough to carry them as an organization. But PC penetration in the U.S. was going to slow dramatically and we had to convince them that the focus should not be on new consumers, but on existing ones. Gateway had to do better job of insuring repeat sales.

I helped them to come up with the Your Ware program. I was at McCann-Erickson at the time. We tried to present a business case and say, ĎHere is why you need to focus on existing customers more.í

This program existed of direct marketing, email, a memberís only site and ďpizza boxĒ material, which consisted of a thin box placed inside the box the computer came in. All of the content was lifestyle driven, special offers only available to them, new product announcements, and notifications of software upgrades. Keep your machine new all the time was the public message.

QUESTION: What best practice tips could you offer about marketing alcohol or spirits brands on the Web? What should be avoided?

WOODARD: Targeting, targeting, targeting.

At Seagram we had to make sure messages were seen only by people of legal drinking age. Contextual marketing, such as specific sites where these consumers will be, was of most importance.

Take Don Julio [tequila] for example; with that brand, superior targeting was key. We knew there were 10 million tequila drinkers in the U.S, and 180 million people of legal age. Using the CentrPort brand integration management software we were able to get the right people to visit a Don Julio microsite we created.

Approximately 60 percent of the people that visited that site not only said they were tequila drinkers, but it was their first choice in an alcoholic drink. We saw a 400 percent lift overall in our results using the CentrPort technology. We got people to opt in or visit the site over time. Engaging content is always key.

As for what to avoid, donít spend a lot of money on a site. Spirits brands are not destination sites. Know your audience. Be mindful of how you target.

QUESTION: What are some best practice tips for anyone looking into RM or CRM as well as what should be avoided?

WOODARD: A strong partner is critical; someone that has experience over a variety of industries.

Look at the quality and depth of your database. It has taken companies a long time to realize the value. The quality of that database is paramount to success.

There are also tools that allow you to do better targeting across all mediums and they should be used.

Integration is also key. There are countless examples of synergies where the integration of communications had a more profound impact on the consumer.

You should also have a very sound measurement framework. There are still a lot of examples of people that do a lot on the Web, but it is not defined well enough to determine the effectiveness of the communication.

Technology for the sake of using technology should be avoided above all. If there is no clearly defined mission for that technology do not use it until you develop sound reasoning to do so. There are a lot of examples of companies who spent millions on infrastructure improvements and they are scratching their heads looking for the payback. There are not a lot of companies that know how to leverage technology in the right way.

In terms of marketing, going after low hanging fruit is not always the best. That fruit is most rotten down there and furthest from the sun. These people [low fruits] are not loyal and they are not the people you want to build your business on.

Finally, I think there is a Ďcampaigní mentality in the marketing space. Use relationship marketing as a strategy, not a campaign. Campaigns have an end. Relationship marketing and CRM are long term. They are an ongoing process. They need to change and evolve.
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