Alan Adams, Senior Director of Customer Analytics at Office Depot, took part in a great panel discussion on integrated marketing management at the 2012 SAS Global Forum Executive Conference along with his colleagues from Seminole Gaming and Best Buy. The session included a short presentation by each panelist, followed by a fascinating discussion period moderated by Lori Bieda from SAS. By the end of the session I had so many notes there was no way to fit it all into one post, so this is the first of three from that session.
Office Depot is well known as a large retailer of office supplies and services, and earns over $12B in annual sales. About 43% of their earnings are from B2C retail operations and the rest is from B2B and international. Other impressive facts about Office Depot is that they operate 1,100 stores in the USA and they are among the top 5 of online retailers, with about $4B in online annual revenue from that channel. Based on those numbers, their company would be described as large and complex no matter how you categorize it, and it should come as no surprise that they are sophisticated users of customer analytics.
Marketing's delicate balancing act
Alan shared a view that many marketers can appreciate, that their customer landscape has changed radically in recent years by the shift to search-driven online activity. As a result, there is a great deal of effort put into making sure their audience can connect with Office Depot content. And in so doing, he described a business environment known to most marketers today where the online experience holds great promise, but also presents new risks that need to be managed. The result is a delicate balance that includes:
- Being where the customer is, at the same time respecting their desire for privacy.
- Being available and top of mind for the customer, but not intrusive.
- Knowing many details about the customer, but not letting them know how much we actually know because that could become creepy.
- Justifying how we have the customer relationship and also making sure we provide real value and treat them as special.
The bottom line, Alan acknowledged, is that at any point, the customer is one click from gone so they recognize the need to manage the many balancing points carefully.
Office Depot has multiple channels for customer engagement, spanning their own website, social media, email, texting and a YouTube channel. They have customer service on the phone and via chat, as well as a loyalty program. They give customers multiple options to engage, and they use SAS to analyze all the data from all these channels for an informed strategy based on customer centricity. Their goal is to achieve a level of customer centricity that optimizes each and every customer interaction.
Changes made during the "Great Recession"
Like many forward-thinking companies, Office Depot made changes to how they conducted business during the recent “Great Recession.” They focused on small wins that were tied to business benefits, standardized campaign activity with Marketing Automation, standardized their segmentation with Enterprise Miner and then re-aligned incentives around new business paradigms. Their new constructs focused on quality and complete data capture that ensured contributions toward enterprise goals.
In addition, the contact center was redirected to focus on quality of engagement and stop incenting reps to minimize call durations. Other key changes was to have everyone start encouraging multichannel engagement with the customer, and a new lifecycle stage strategy that got emphasized ways to move the relationship along in the lifecycle. Some of these changes were significant, and many challenges they faced involved the human side of process changes. As a result, they placed emphasis on changing behaviors, encouraging accountability and building trust. And access to data and trusting in it became critical success factors.
Benefits from those changes
All these changes have enabled Office Depot to reap many rewards, including globally standardized campaigns and segmentation, high growth in social engagements and heavy referral traffic from social vehicles to their website. Their view of customer activity across channels has helped to improve personalization and contact offer strategy, reduce duplicate touches across channels, and overall greater effectiveness enabled by a calculated migration from higher-cost touches to lower-cost touches.
To me, those results show that the Office Depot way of taking care of marketing provides a shining example of the strategic value of applied customer analytics, and also a winning formula to meet the expanded mandate of marketing to drive profitable growth.