David Raab Article Archive

In discussions of relationship marketing, no cliche is more popular than the old-time corner shopkeeper who knows each customer personally. Happily, such merchants still exist: in the small town where I live, there is a clothing store owner–let’s call her Sally–who orders items with specific customers in mind and points them out when that customer comes in to shop. And, yes, customers reward her with loyalty and a large a share of their fashion wallet.

Still, from the standpoint of relationship marketing theory, there is something wrong with this picture. It’s not just that Sally manages to maintain her relationships without a computer–the corner shopkeeper is supposed to do it all in her head. It’s that Sally doesn’t know her customers’ birthdays or wedding anniversaries, how many children they have or what they do for a living. She may not even know their mailing addresses or phone numbers. In fact, her customers would be surprised–and not necessarily pleased–if she called to suggest that they come in and look at some new item. What they like is that Sally stocks the styles they want, in their preferred sizes and colors, and makes them easy to find. This is less relationship marketing than relationship merchandising.

Of course, merchandising has long been included in the more expansive relationship marketing experts’ list of applications. But in the real world, merchandising management in large organizations is almost always done outside of marketing. Not surprisingly, the merchandising and marketing computer systems tend to be independent as well. So relationship marketing software vendors have not spent much time developing merchandise selection capabilities.

But why limit ourselves to the real world? Online merchants don’t necessarily contend with the constraints of physical inventory, shelf placements or catalog page design. This leaves them free to focus on presenting the right items to each customer using technologies like collaborative filtering and customized Web page generation. Vendors including Broadvision (650-261-5100; www.broadvision.com), Net Perceptions (612-903-9424; www.netperceptions.com), and Intelligent Interactions (703-706-9500; www.ipe.com) all specialize in tracking individual customers’ preferences and offering just the right product when they walk through the virtual front door. This lets them offer a good imitation of the personal merchandising provided by our friend Sally.

Virtual reality aside, relationship marketing software has tended to focus on managing streams of customer contacts. The goal is to build relationships with customers by contacting them often enough to show you believe they are important, with messages specific enough to show you understand their needs. The trick is really in sending the right specific messages–otherwise, your regular contacts only prove to the customer that you see them as a faceless entry on a mailing list. This is probably worse than no contact at all.

Harvest (West/Marketing, 303-759-9247 or 800-756-0511; www.westmarketing.com) is designed to automate the sending of appropriately targeted messages. The system comes with a library of over 100 prewritten letters to welcome new customers, reactivate lapsed customers, thank customers for referrals, and so on. More important, it lets users define “events” that can trigger specific marketing actions, whether letters, faxes, or scripted telephone calls. An optional module can generate personalized e-mail as well. Customers can be assigned to events by attaching an existing customer list or by having the system check automatically over time for a specific condition such as making a major purchase. Events can also recur at set intervals, such as a quarterly newsletter. The system can also tie events to a customer’s birthday or to accumulation of points in a simple loyalty program. Several events can be strung together as a campaign. One campaign can direct different customers to different events depending on their behavior. Campaigns can also loop back onto themselves to repeat a series of steps. To avoid bombarding good customers with too many contacts, the system can prevent customers in existing campaigns from starting new ones.

The goal of Harvest is to make this sort of complicated relationship management easy enough for a small business or sales office. The system does this by offering a “daily marketing” screen that shows the letters due to be printed and offers a variety of reports on contacts and followup activities scheduled for that day. The system will accumulate activities if the user misses a day, so scheduled contacts are not lost. Printed reports include formats with predefined response possibilities, to make it easy for salespeople or telemarketers to report back on their results. On-screen reports let users enter the results directly back into the system. Harvest will also give a daily list of items for which responses are overdue.

In addition to managing day-to-day activities, Harvest performs detailed analysis on the profitability of different marketing projects. It lets the user assign a cost to each marketing event, will track the total costs associated with an individual customer, can link purchases to a specific marketing promotion, and tracks the sales made to each customer. If a company has a program to encourage referrals by existing customers, Harvest will analyze the purchases made by a customer and by the people that customer has referred. The system can also summarize actual scheduled marketing expenses for user-defined periods.

To help increase sales, Harvest lets the user create a list of “suggestive selling” items related to a major purchase. A report can show sales of the primary item that did not include the related items, highlighting missed opportunities for cross selling.

Harvest data is stored in the Microsoft Access relational database. The data structure is fixed but allows unlimited numbers of addresses and telephone numbers for each customer and up to fifty user-defined fields. It also lets the user indicate that different customers are related to each other–for example, they may be employed at the same firm–but not the specific nature of the relationship. Sales information must currently be entered manually or through custom programming, although the vendor hopes to establish linkages with popular accounting programs. The system can import data in ASCII files or popular PC databases and spreadsheets, but it lacks sophisticated deduplication or data merge facilities.

The product runs on any version of Microsoft Windows in either stand-alone or network installations. A single copy costs $495, with additional network copies for $200 each. A bulk mail module with postal coding and sorting is priced at $490, while modules for reporting, e-mail generation and e-mail input are priced at $200 to $300 each.

Based on its price and technology, Harvest will most likely be compared with low-end contact management products like WinSales (425-453-9050; www.winsales.com) or GoldMine (800-654-3526; www.goldminesw.com) or retail-oriented systems like TargetSmart! (303-698-2233; www.targetsmart.com). But it is more tightly focused than either group on managing contact streams independent of specific sales campaigns. In some ways, it is most comparable to the new class of “marketing automation” systems like MarketFirst (408-261-6950, www.marketfirst.com) and Rubric EMA (650-513-3870; www.rubricsoft.com). These $100,000-plus products also function primarily to automate communications with customers and prospects. But they offer enterprise-wide scope and tight integration with the Internet and other corporate systems. Still, for smaller operations needing a simpler relationship marketing solution, Harvest is an interesting alternative.

David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.