Quebec success story proves CRM strategy can work even for smaller businesses

Les Ailes de la Mode is a Quebec retail brand that has built its name around customer relationships. The specialty department store considers customer relationships not as a marketing strategy necessarily, as much as an overall experience, points out VP of marketing, Claude Fortin.
'We are here to build a very good personalized experience - it's not just a matter of marketing strategy, it's our mission,' he says of the specialty department store. The shopping experience, says Fortin, includes 'little extras' like free coat check, free shoeshine, baby feeding rooms, a highly trained staff (and more of them on the floor) and a place for people to go to read the newspaper.

Les Ailes de la Mode is a Quebec retail brand that has built its name around customer relationships. The specialty department store considers customer relationships not as a marketing strategy necessarily, as much as an overall experience, points out VP of marketing, Claude Fortin.

‘We are here to build a very good personalized experience – it’s not just a matter of marketing strategy, it’s our mission,’ he says of the specialty department store. The shopping experience, says Fortin, includes ‘little extras’ like free coat check, free shoeshine, baby feeding rooms, a highly trained staff (and more of them on the floor) and a place for people to go to read the newspaper. (see story pg. 2)

Les Ailes – which focuses exclusively on fashion, beauty and décor – is only eight years old, and yet, has not only established itself as a top retailer in the province, but also as a credit card and point program company, a cataloguer and even a publisher. Each piece of the puzzle fits into its homegrown CRM strategy to become a part of its customers’ lifestyles.

Bianca Barbucci, president of Quebec’s direct marketing association, l’Association du marketing direct et de la relation clientele (AMDRC) and VP, client services at Montreal-based FCB Direct Canada, puts Les Ailes on a select list of ‘Quebec success stories.’ Some Quebec companies, particularly on the retail side, have been very successful at developing in-house customer relationship programs with limited means, she says, including boutiques such as Bernard Trottier, Laura and La Senza.

‘CRM is talked about everywhere in Quebec,’ she says. ‘Everyone knows it exists, but most small/medium businesses don’t have the means or the education to make it happen.’

The fact that Quebec has many small and medium-sized enterprises (SMEs), is very much influencing the evolution of marketing in general, but especially direct marketing and customer relationship marketing, says Barbucci.

‘We see time and time again, people who would have very good applications for direct marketing constantly focusing on mass media to acquire customers. They seldom make the investment into customer retention and customer relationship building: it’s hard to instill the marketing philosophy in their corporations and it usually looks far too costly.’

So, they do things in-house, she continues. And, until recently, they’ve done it without accessing external resources or education programs.

‘We’re seeing a major shift from traditional direct marketers to these small and medium-sized businesses and retailers who are starting to get into it and are realizing they should go to conferences to gain the knowledge that they are called upon for internally,’ says Barbucci. ‘Because they haven’t traditionally accessed the external market expertise, the whole industry has evolved a little slower in Quebec than in other provinces.’

CRM is definitely a major focus for Les Ailes de la Mode, as it is for many Quebec enterprises, says Fortin, and like most executives, he believes in the concept. But he argues there is a way to tackle it without going bankrupt first for the technology.

‘When I listen to technology suppliers and solutions providers, I see the things that can be done. But the technology that’s needed to do that – especially in the retail business – is so huge that that’s not how it will happen,’ he says.

‘The problem I have is that I’m a $300-million business. I carry name brands and over a million SKUs a year. If I want to put a CRM strategy in place with a data warehouse that can track every customer purchase, I would have to invest millions of dollars, and hire 30 people to manage it, and I won’t have a clue what they’re doing. I can’t sell that to my board.’

Instead, he argues, SMEs can come up with other tools or components to capture information in the store, and leverage the relationships that have already been built on the floor.

Five years ago Les Ailes launched Les Ailes MasterCard, targeted at an under-served segment of the ‘gold’ or premium credit card market: women. The card, which costs only $20 a year versus the usual $80 (approx.), has a points program tied in that offers one point for every $20 of purchases on the card, and triple that on purchases made at Les Ailes. It also incorporates an electronic chip, on which a $10 coupon is rewarded to each member every month via the electronic gift card (on purchases of $10 or more every month). Card members also receive free subscriptions to the retailer’s les Ailes magazine.

According to Fortin, 55% of credit card-holders return to the store every month to spend the $10 coupon. The points program boasts items that don’t take years to achieve. Promotional items are offered that customers can get after one or two purchases in the store. The 200-page magazine and a supplementary ShowCase reward program guide, he adds, allow him to communicate with customers every two months. Les Ailes Web site, launched seven years ago, also allows customers and card members to check and exchange points, and soon will enable bill payment, and perhaps even hair appointment reservations.

‘Right now we are re-launching our Web site to redefine our online relationship with our customer – we’re moving away from the e-business model because the Web is so much better at enhancing relationships. It’s a major component of building a strong CRM strategy.’

To date, there are 105,000 people in the program, the majority of whom are in the province of Quebec. (Les Ailes launched a store in Ottawa last summer, and has since begun to build a base of English Canadians with English language versions of its magazine and catalogue.) The biggest challenge right now, however, is recruiting more men to its card and magazine offerings. Even though the primary target is women, at least 30% of in-store customers are men.

‘We’re investing in our relationships, but it doesn’t necessarily have to come with technology. We have invested in certain things like chip technology and the Internet, but at the same time, we bought a piano to boost in-store brand experience,’ says Fortin.

According to Barbucci, the CRM and relationship marketing industry could stand to benefit from increased educational support. For its part, the AMDRC has put together a certification program that will begin in September, which will offer an array of basic direct marketing courses, then evolve to touch all the various other disciplines such as e-marketing and call centres as well as more advanced courses like CRM and data mining, she says.

Within the agency framework, she says, FCB Direct, for example, is ensuring that it continues to educate clients on the benefits of doing relationship marketing, as well as getting involved in things like teaching at the university level, speaking engagements.

‘The concept of relationship marketing is very strong in Quebec, but SMEs are at a disadvantage. The industry as a whole and the agencies do have a key role to play as we try to propel the industry forward.’