By  on January 12, 2005

Retail has not cooled on customer relationship management technology despite the failed and costly implementations endured by early movers.

Difficulties only amplified the message that CRM is as much about process as it is about technology. CRM systems manage customer data and various contact points between the retailer and the consumer, including Web, store and call center, to improve customer loyalty and drive profits.

Reebok International and United Retail Group are among those investing in CRM.

Paul McFarren, senior vice president and chief information officer at United Retail Group, with 530 Avenue apparel stores, said CRM also includes measures to protect perceptions of the brand.

“We implemented our CRM solution; we are live with it and we are very happy with it,” said McFarren, who recently took over responsibility for all direct marketing at the $396 million United Retail Group. He declined to detail his company’s plans, but said CRM is becoming a “mandate,” particularly for specialty retail as large players pressure small ones to differentiate themselves.

“CRM is the means by which you change and manage the face that you show to your customer,” he said. “We spend a tremendous amount of time getting down to the philosophy of how do we market to each and every customer, specifically to their purchasing patterns and requirements.”

Reebok is testing CRM in a call center that serves retailers selling its apparel and footwear. “We are going to be very careful about how we use it,” said Peter Burrows, senior vice president and chief information officer of the $3.5 billion athletic footwear group. The company will leverage the software to improve customer interactions, respond to and document all call center contacts, and will not repeat CRM gaffes Burrows said he’s experienced personally.

For example, he cited poorly crafted e-mail campaigns. Attempts at highly personalized communications are defeated by the unintentional — and comical — intrusion of programming code, embedded right in the text of an e-mail message. “CRM, when deployed as a way to get out of good, old-fashioned targeted marketing? Forget it,” he said. “It’s irritating.”

It’s these types of problems that underscore the importance of getting the process right, before installing CRM technology to automate the process, he said. “People are realizing it’s not that easy,” he said. “You don’t just plug in this technology and increase sales. You have to be really smart about how you use it.”Phillip Maxwell, senior vice president and chief information officer for Neiman Marcus Group, agrees: “I don’t think any of the CRM solutions have solved it. They are tools. There is no drop-in solution. People who look for a CRM solution to be a ‘solution’ are going to be disappointed.”

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