Yesterday we hosted a webinar with Charlie Cole, Chief Digital Officer of Tumi, and Omer Artun, CEO of AgilOne, where they discussed Tumi’s successful journey toward putting the customer at the center of Tumi’s entire ecosystem – and the sales results that followed. Cole shared Tumi’s process for developing a strategy, gaining internal alignment across seven key groups of stakeholders, and implementing AgilOne’s customer data platform.
We wanted to make sure you had all the highlights from the webinar, so we took detailed notes for you below and have the slides for you here.
As Cole jovially framed it in the webinar, let’s jump to the “punch line” and then back it out from there. Here are Tumi’s results in 2016 and early 2017 from AgilOne:
- 7% sales growth
- 3% gross margin growth
- 6% operating margin growth
- In 2017, growth is expected to increase to numbers closer to 40%
So how did Tumi do it? Tumi developed a strategy that put the customer at the center of everything.
Before engaging AgilOne, Tumi was very siloed. The different organizations within Tumi were not aligned on their goals and objectives. Digital was a very dominant silo, and this one channel was emailing customers so frequently that emails were no longer effective. Cole noted that this is a common mistake among even the largest retailers. Spam traps block emails from servers that over-send, meaning that not only is a campaign exhausting its audience, the emails aren’t even reaching the audience.
The root cause of the problem, Cole stated, was the siloed P&L of each channel. Digital was over-promoting to drive its own P&L, but wasn’t aligning with retail and wholesale as it pertained to promotional cadence. As a result, business was shrinking, customers were over-saturated, and Tumi realized they couldn’t send even one more email without jeopardizing their customer relationships. And as a luxury brand, this was the wrong strategy in the first place.
As Cole elaborated, competing against Amazon is a challenge for any retailer, but for a luxury brand like Tumi, fighting on price was not a battle that would ever be winnable. When a brand differentiates on experiences, and on real relationships with customers, this is how to win against Amazon.
Cole’s approach was to align seven key teams across Tumi’s organization, and incentivize every team based on what matters to them. For example, Merchandizing cares about product mix, Creative cares about what collection is being promoted, Operations cares about efficiency. By understanding what motivates each team, Cole asked, how can customer-centricity increase your own success metrics? Here’s a picture from the webinar that illustrates his point:
As part of this approach, Cole regarded what incents each team down to the lowest level – including store associates and call center agents. By making sure every team understands how they each benefit, the exercise of transforming strategy became truly collaborative, and helped Tumi avoid the common obstacles that arise when one silo simply says “I need a tool” but other teams in the organization don’t understand how it will impact them, or could benefit them. Only when teams work together can an organization truly transform their strategy to the degree that Tumi has.
Once they agreed on this customer-centric approach, the team evaluated marketing service providers, considered whether their ESP would meet their needs, but they quickly decided that the best approach was to choose AgilOne’s customer data platform. Tumi’s key reasons for choosing a customer data platform were that they wanted:
- A self-service platform
- To not have to rely on data analysts for everything
- Access to data
Once Tumi was aligned on the approach, the first step was to get all of Tumi’s data into one place. The stakeholders asked, “What data is relevant as it pertains the customer journey?” and discovered the important data in every channel. Here’s all the data that is pertinent to Tumi’s customer journey:
Once Tumi’s customer data was all in one place, the teams could ask meaningful questions and learn critical things about their customers, such as what channels customers prefer at what times, how do the different channels influence loyalty, who are the highest value customers, etc. AgilOne provided this intelligence so Tumi could design a customer strategy that would influence and grow all parts of their business. Here is Tumi’s architecture after they implemented AgilOne:
Notice in this architecture how data flows into and out of the system. Key customer data feeds such as online and offline orders, web data, email data, analytics data all flow into AgilOne. AgilOne continuously cleanses, dedupes, and stitches all this data into a single customer profile, applies insights and predictive analytics to the data, and enables orchestrated personalized engagement to Tumi’s output channels such as email, Facebook, the website, etc. This process enables Tumi to engage in marketing that is truly 1:1.
Before AgilOne, Tumi’s view of the customer was all based on transactions. And as Cole and Artun explained, Tumi is not alone in this – transactions have long been the lens through which most retailers view their customers. Unfortunately, it’s a limited view, like this:
But with AgilOne, Tumi is able to bring in engagement and event data as well – and handle the enormous size and speed of all this data. With AgilOne’s enterprise SaaS-based approach, Tumi can use all this data to intelligently and relevantly respond to customers at the speed of conversation. So, here’s all the customer data Tumi can use now:
And although I spoiled the punch line by sharing Tumi’s success metrics at the beginning of this blog post, Tumi also made the following gains with AgilOne:
- Sent over 40,000,000 less emails year over year, yet made more money from the channel
- Eliminated 40 promotional days from the calendar, and 22 more already in 2017
- Improved marketing ROI from 6.26:1 in 2015 to 9.26:1 in 2016
- Drove full price growth of 28.5%
- Grew email database by over 200,000 people
The webinar concluded with Cole sharing projects that are currently in flight or soon to come. He spoke with great excitement about Tumi’s pilot project to enable store associates with a clienteling app that uses AgilOne data, giving associates a 360 view of the customer. Store associates will be able to call previous shoppers who live close to Tumi retail locations, and personalize those calls with AgilOne data. They can also use AgilOne to create lists of people for customized engagement. For example, they can create a list of people who only bought during promotions, or who clicked on precisely two emails within the last 90 days, but didn’t purchase, etc. Here’s a picture that Cole shared:
Other next steps for Tumi include:
- Personalizing website experiences based on AgilOne’s single customer profile (e.g., if a logged in shopper has a suitcase for repair, the shopper receives an update on the status of the product being fixed)
- Enabling customer service, support, and call center teams with AgilOne data.
More information on Tumi’s success is coming soon. In the meantime, feel free to review the deck from the webinar, and read the interview and case study article published by Internet Retailer.
Interested in more enterprise B2C stories? You can also learn how AgilOne is achieving dramatic results for lululemon, Clarks, and Hugo Boss.