When executives at Hard Rock Cafe realized the theme restaurant space the company helped invent was getting crowded,...
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they turned to CRM to help bring customers back into the fold.
Founded in London in 1971, the now Orlando, Fla.-based Hard Rock Cafe International Inc. was indeed among the first chains of themed restaurants to come into existence. The cafes became as well known for their memorabilia and t-shirts as they did for the food. But with the rise of many thematic eateries peddling everything from Australian steaks to tropical rainforests, Hard Rock turned to analytics specialists E.piphany Inc., San Mateo, Calif., to help solidify its footing.
In 2000, the company estimated that it had 30 million customers come through the doors to its 100-plus locations each year, yet it had a database of only about 10,000 names. The first step in its project was to begin a detailed customer survey to build out its data resources and gauge its potential for using CRM. That survey was only just completed in February 2002.
Prior to implementing the E.piphany applications, Hard Rock fought a manual war, trying to communicate with customers through traditional contact center applications that didn't integrate with other systems in the organization. By utilizing the software tools in completing its survey, the company was able to build a shared data repository, creating a single view of the customer to work from.
As the company collected more information, it began offering membership in several customer loyalty programs. Serving as the backbone of its CRM strategy, Hard Rock now counts some 100,000 people as preferred customers. The group is divided into two specific programs, Hard Rock's Pin Club, which revolves around the collecting and trading of souvenir pins that it markets, and its All Access program, which focuses on preferred status in the restaurants, gift shops and when buying from its print memorabilia catalogue.
"The survey has really been the heart and soul of what we've done," said Patrick Colbert, senior CRM analyst at Hard Rock. "We gave the managers in the field the incentive to push the program down through their employees and it's really paid off. Beyond the strong top-down leadership we had in approaching CRM, this has been the biggest key to our success."
The effort is truly recording some landmarks, according to Colbert, having already paid for itself, driven a 75% increase in Web memorabilia sales and improved customer service response time by an estimated 85%. Hard Rock recently garnered recognition from industry analysts Gartner, Stamford, Conn., as a leading example of CRM success.
When it came to selecting its technology, Colbert said E.piphany was an easy choice for Hard Rock because of the size and scale of its products. Colbert said the company considered some larger enterprise vendors but settled on E.piphany almost from the start because of the relative ease of deployment. At present Hard Rock utilizes two major applications from the software vendor, E.piphany Analytic Platform and Campaign Management Interactive Platform.
Utilizing the technology, Hard Rock built a customer database to host its records and loyalty applications on Microsoft Corp.'s SQL Server 2000 platform. The databases are used to provide real-time customer information for several applications including its e-commerce operations. The company is using the Analytic Platform package for marketing campaign development, execution and analysis. The Interactive Platform is being used to integrate the customer database with other data sources for membership programs and general customer support. Hard Rock also leveraged Trillium Software's data cleansing tools for customer record cleanup including coding and matching.
According to Colbert, Hard Rock hasn't overspent on software and services around its deployment and the increased sales levels linked to its loyalty programs have already covered roughly all the chain's CRM expenditures.
"The key to our ability to perform financially is that it's what we've geared for all along," said Colbert. "Even when we give away something, when people go back to the cafe they end up spending more. We've tracked this and it's a fact."
Jamie Fiorda, product line marketing manager at E.piphany, worked on the Hard Rock deployment and gives much if the credit for its success to building an effective strategy from the beginning.
"Their ability to segment down was a huge benefit to drive appropriate offers to individuals," said Fiorda. "We did analysis based on the different types of customers and figured out how they responded to e-mail or coupons. It was easy to identify what kind of people were buying in and why."
Fiorda said this approach allowed Hard Rock to fine tune its offers and realize response/purchase rates as high as 75% immediately after launching some e-mail campaigns.
Going forward, Colbert said Hard Rock would push to move its memorabilia catalogue online and leverage real-time analytics to offer deals to customers shopping at hardrock.com. Someday the company hopes to extend its CRM deployment to the point where it can identify and reward customers at point of sale locations -- its restaurants -- rather than exclusively through its member-based programs.
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