eToys plays nice with customer panel

A customer advisory panel and email surveys help the company understand and better serve its customer base.

Come Valentine's Day, it's not just couples who give gifts. One study says that 98% of Americans exchange gifts

with family and friends that day. What company sponsored that study? eToys Direct. Surveys are part of the company's strategy to gain deep customer insight that goes beyond the typical customer-retailer relationship.

The company, known for its e-commerce site, www.etoys.com, also runs the Web site for KB Toys, and has retail partnerships with Macy's, Sears, Kmart, and QVC, among others. The company also produces the Wishbook holiday toy catalog for Sears. eToys' customers number in the millions, said Gary Lindsey, vice president of marketing. Interacting with them on a personal level is vital to the company's success, he said.

Every year, eToys chooses 400 customers, mostly moms, to serve on an advisory panel. The company selects customers who are demographically representative of its customer base, and then invites them to join the panel via email at the end of the Christmas holiday season. eToys offers a 10% purchase discount during their tenure as an incentive to participate. Panelists receive email questionnaires monthly relating to products and Web site tools, as well as more abstract issues and seasonal interests. For example, to capture customers' attention, one recent questionnaire included the question, "Which part of the chocolate Easter bunny do you eat first?" (The ears won handily.)

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"These types of questions help our company understand the customer so we can provide better service and better products," Lindsey said. "For each season we understand how much moms plan to spend on gifts, decorations, etc. They also create a human interest level."

The panel interaction keeps a pulse on what customers want, instead of operating in a vacuum. For example, when planning the Wishbook catalog, eToys has the panel rank eight possible covers. Lindsey recalls one year when the CEO disliked one particular cover choice. Yet that cover was chosen as the panel's second favorite, so the company went with the panel's choice over the CEO's.

"The surveys make it easy to say we've got to do what's right for the customer," Lindsey said. "It takes away any bias from the company and helps us understand what the customer wants to drive the business forward."

eToys also sends out larger, ad-hoc email surveys to its overall customer base, Lindsey said. The company works with Inquisite to facilitate the surveys. The questions, like with the panel, cover issues ranging from products and services to seasonal questions. Response rates vary, depending on the subject matter.

"How you get people to respond to surveys is a challenge," Lindsey said. "We were surprised at the amount of interest with the seasonal surveys, which sometimes get as much as a 95 percent response rate."

For the more site-specific or functional questions, he said the company may include a cash incentive.

"The marketing department pulls the surveys together, but we ask other people in the company what they would like to learn about," Lindsey said. Employees in operations, purchasing, and sales regularly contribute question ideas, he said. The cross-functional interest in the customer rises up to the executive level, which is briefed regularly on all survey results.

eToys uses the insight from its surveys to make improvements, Lindsey said. For example, one survey asked customers what they thought was missing on the eToys site. They responded with requests for more creative products, and as a result the company expanded its arts & crafts section. Its survey strategy, Lindsey said, "is really valuable in getting close to the customer and learning more about them."

Reprinted with permission from

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