Video"Our customers expect more in this day and age," says Jim Kotchik, senior vice president and CFO of the Trail Blazers. "They're paying more for games and want more in return — a better entertainment experience and better service." And with the newly built Rose Garden holding 20,000 fans versus fewer than 13,000 for the previous venue, the Trail Blazers had to find ways to put bodies in all those additional seats.
The CRM data is a veritable gold mine of potential sales leads, telling reps the types of events the ticket buyer enjoys (country western music, for example), how they like to be contacted (by email), and what they like to be contacted about (Friday night events). In addition, the system gives the company leverage with promoters representing artists who may be unsure whether a Portland stop makes sense. "By tapping into the CRM database, we can point out that there are 10,000 people interested in an Eric Clapton concert," explains Cesarano.
The big test of the system came in 1999, a few months after it was installed. Allen wanted to bring a women's basketball team franchise to Portland, but the Women's National Basketball Association said he'd need to sell at least 5,500 season tickets before it would guarantee a franchise. The team decided that parents of school-age girls would be hot prospects, and the CRM system made it easy to identify and contact them.
Kotchik says the two primary ROI metrics used to determine the effectiveness of the eCRM strategy — productivity improvement and customer service — indicate it is paying off handsomely. "We can measure things like overall revenue, but that wouldn't tell us if we've got more fans because of how we service them or because the team just pulled in two new superstars," says Kotchik. "We needed to develop other metrics to analyze the impact."
One metric is season tickets, which reduce a team's dependency on more labor-intensive box-office sales. "The system helps us target and service season ticket holders, which offer a bigger bang for the buck," says Cesarano. Since introducing the eCRM strategy, season ticket holders increased by 5.4 percent in the first year and 7.3 percent the following year, he notes.
"Our sales reps are able to focus their energies on the most likely targets for tickets to a particular event," adds Cesarano. "And our service reps, through their wellness calls, enhance customer loyalty." The number of such calls is up from zero before eCRM to nearly 7,000 this year.
The company measures the success rate of every individual sales campaign, tracking how much money went into the campaign and the results of who responded. "We also measure the number of customer complaints, as well as whether or not the customer later feels the problem has been resolved," adds Cesarano. "And we measure the effectiveness of email notifications to customers about tickets to an event to determine how successful the strategy is."
All measurements are proprietary, but Cesarano and Kotchik say they indicate conclusively that the strategy is a keeper. "We ask ourselves continually if we had to do this all over again, would we," says Kotchik. "The answer is yes — even if it had cost twice as much."
As the basketball season drew to a close in June, the Trail Blazers celebrated their 100th sold-out game. Scottie Pippen surely had something to do with that, but so did Tony Cesarano and Jim Kotchik. —Russ Banham
Mikasa
Mikasa (www.mikasa.com) learned the hard way how to be an etailer. In 1999, the Secaucus, New Jersey— based manufacturer of fine crystal stemware, dinnerware, and upscale gift products launched a Web site that it now says was simply a test balloon. "The site marketed only 400 of our 20,000 SKUs," says Seth A. Rubin, director of ecommerce at Mikasa, which retails at upscale department stores and its own 165 shops.
Although the company spent little on the site, it made even less. Having failed to achieve a return on its investment, Mikasa shut it down after nine months.
The company remained keen on an Internet sales channel, but decided to take a completely different approach. Last year it relaunched Mikasa.com, using a customized version of the WebSphere Commerce Suite from IBM (www.ibm.com) and hosting the site at IBM partner Web Emporium (www.webemporium.com), a Phoenix-based application service provider.
Once they decide to outsource, many companies are only too happy to abandon any meaningful examination of ROI, but Mikasa CFO Brenda Flores keeps close tabs on several metrics. "We're measuring ROI in terms of customer loyalty, revenue commitment, and cost-cutting," she says.
According to Sandy Carter, worldwide vice president for WebSphere marketing and channel execution at IBM, Mikasa's insistence on a close analysis of return on investment is part of a trend. "More and more prospective etailers are coming to us insisting upon clearly defined ROI metrics before undertaking a B2C or B2B project," she says. "In today's economic downturn, they're finding they need to be able to justify the business results."
So far, the metrics match expectations. "The new site enhances productivity," says Rubin. "Previously, we would receive an online order and then have to manually place the order into our system here, and then we'd have to run the credit card through. Now it goes straight from the Web server to our back-end ERP system, and the credit card is automatically authorized. The only time there is ever any manual intervention is when there are exceptions [for example, if there's a problem with the credit card]."
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