1 to 1® 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. 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 experience and a holistic view of the customer. The company wanted to think big but act small with customers, no matter what channel they use. A multichannel customer is worth three times a singlechannel customer, so strengthening that relationship is critical to long-term success.
“Our goal was to ensure that we were really looking at our customers in a 360-degree view,” says Pati Crowley, director of customer experience for Bath and Body Works. “If you just have software and you don’t have a defined customer experience and customer strategy with it, you’re probably going to save money, but you’re probably not going to drive top-line sales and really have a revenue argument.” Bath and Body Works worked with Astute Solutions to implement its Web-based CRM solution, ePowerCenter, to get that 360-degree view. “It has really driven tremendous value in integrating the customer into everything we do,” says Sharon Leite, vice president of 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.”
Using ePowerCenter, the company instituted voice of the customer surveys in spring 2006. At the end of a call associates engage customers in a survey, “although it is so conversational that they don’t realize it is a survey,” Crowley says. The questions are designed by Bath and Body Works’ market research team, and deliver real-time customer feedback about such topics as store design, a product launch, or a selling initiative. Each week may bring new questions. “This insight provides the brand the highest level of real-time quantification possible and ensures a 360-degree view,” Crowley says. Crowley and her team can track customer feedback, as well as report and analyze in-depth customer trends. Contact center employees also now have access to detailed, integrated customer and product information in a knowledge management system that allows them to answer almost any customer question immediately. For example, agents can quickly respond when a customer calls asking what ingredients are in a certain product.
The company knows technology isn’t enough—contact center agents contribute significantly to the customer experience, so each agent is trained just like in-store associates. In addition, they participate in the P.A.C.E. (Productivity, Accuracy, and Customer Experience) performance review matrix. Agents are monitored and measured on such indicators as customer satisfaction and first-call resolution, and conduct self-assessments about their delivery of the customer experience. There is also a “voice of the associate” program to gain internal insight on how to be more effective as an organization. The results are delivered to the executive committee and owners are assigned to correct and streamline the process.
Employee empowerment is a big part of Bath and Body Works’ strategy. Agents are empowered to solve a customer’s problem with up to $25 per call. “We call it ‘reason to return’ strategy—if a customer had a pain point, our goal is to put them back in the store and to change whatever that experience was,” Crowley says. There was a mentality that the strategy would lose the company money. But in reality, when agents give coupons or other incentives, that customer ends up spending twice the company’s average dollar sale. “And in the more egregious situations we issue gift cards, and even those have a profit value to the organization,” Crowley says. “The financial department scrubbed the numbers three times because they honestly didn’t believe it. And for this reason, we are not bound to a monthly budget in terms of customer goodwill.” That drives customer advocacy and positive word of mouth.
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 and anecdotal information to judge its success. Now Bath and Body Works publishes a toll-free number on every receipt, inviting customers to call the contact center with comments or questions. Crowley estimates that more than 62 percent of call center calls are driven by that access. In addition, employees can track purchase and visitation trends.
“We were very underdeveloped from a reporting capability, so once we got the engine that this technology provides, it really advanced our credibility within the organization, not only from a qualification but a quantification perspective,” she says. “And it really helped us measure changes in loyalty, and understand the correlation between customer engagement and profitability.”
Bath and Body Works has seen some impressive results from its technology optimization. From an efficiency perspective, the contact center exceeded $32 million in sales generation and cost reduction in 2005. On the customer side, customer satisfaction in the call center is 94 percent, and its compliment-to-complaint ratio runs 20 to 1. Firstcall resolution is 90 percent. Employee turnover is only 5 percent, and the employee promotion rate is 45 percent.
Four years ago the contact center was considered the complaint department. “We’ve really changed from that,” Crowley says. “The contact center has to be part of the brand, be considered a brand asset and part of the overall strategy.” Bath and Body Works’ strategy is certainly considered a brand asset. Its success has led to plans to roll out similar customer-centric efforts in other Limited Brands companies, such as Victoria’s Secret and Express. Says Leite: “We’re the beta for the brand.”