REVIEWER: Sue Ghilarducci, director of marketing for Sur La Table.

BACKGROUND: Established in 1972 in Seattle's historic Pike Place Farmers' Market, Sur La Table set out to satisfy the growing demand for a reliable source of top quality cookware and hard-to-find kitchen tools. The store quickly became a leader in the marketplace. In 1999, Sur La Table launched an online gift registry and its e-commerce Web site. Today, its award- winning catalog reaches more than 9 million people worldwide.

PLATFORMS: Sightward Hosted Service is an outsourced service that does not require on-site software installation.

PROBLEM SOLVED: Sur La Table needed a solution designed for marketers, not technicians or statisticians, that would accommodate our tight deadlines, limited technical resources and budgetary constraints. We wanted to receive the benefits of a CRM system without investing in a full-scale implementation. We needed a fast, affordable way to leverage the data we had been collecting to keep up with changing customer preferences. The success of our campaigns was driven by our ability to quickly and easily segment customers and understand the drivers of customer profitability. Our goal was to increase direct marketing response rates and find a more accurate way to target customers beyond RFM which creates mailing lists based on how recently a customer purchased (recency), how many purchases they made (frequency) and how much they spent (monetary). The solution needed to be inexpensive and require little or no in-house technical expertise. We also wanted to reactivate lost customers and avoid mailing to customers who were least likely to respond to specific mailings.

PRODUCT FUNCTIONALITY: Sightward develops predictive modeling software that analyzes complex databases and gives direct marketers a single-purpose solution to automate the predictive modeling process, create highly targeted mailing lists and evaluate profitability before running a campaign. The software automatically chooses the most predictive statistical model for the data and gives users the power to evaluate the ROI of various campaign strategies prior to mailing.

STRENGTHS: By opting for the hosted service, we were able to take immediate advantage of Sightward's technology. We didn't want to install and manage a software system in-house and Sightward gave us the results we needed quickly and affordably. Sightward's predictive analytics looked beyond RFM to achieve greater results, and it gave us better names that we probably wouldn't have identified with RFM. The software analyzed our house files and identified highly predictive features of customers who had a strong probability of responding. Sightward also gave us more control over planning and budgeting, allowing us to see the ROI of our campaign before mailing and to plan for future mailings based on those predictions.

WEAKNESSES: Sightward is not a data warehouse or a list management company and, therefore, does not provide National Change of Address (NCOA) functions or other data-housing or cleansing services that would have been convenient for us.

SELECTION CRITERIA: In August 2001, Sur La Table put Sightward's predictive analytics technology to the test in a comparison with our existing targeting method, RFM. We created two separate customer mailing lists containing 200,000 names each from Sur La Table's house field. Sightward obtained customer data from our third-party data management firm to build a model and generate a mailing list. The other list was created using RFM. Sightward's list outperformed RFM by 43 percent. In a comparison of recent Sur La Table customers to customers who had not purchased in more than two years, the Sightward model discovered that buyers on our 25-plus-month list spent $20 more on average.

DELIVERABLES: We handed over our in-house customer file, and Sightward consultants used the software to create a ranked list of customers most likely to respond based on our specific business objectives. They discovered that the number of departments a customer purchased from was a highly predictive feature of someone who would be likely to respond. Sightward also identified dormant customers from our 25-plus month house file that it deemed likely to respond. Sightward produced a ranked list of customers, the results we could expect to achieve and how deep into the list we should mail.

VENDOR SUPPORT: Sightward's statisticians and consultants worked directly with us to achieve the best results possible.

DOCUMENTATION: Using Sightward's hosted-services option, we avoided having to deal with installing and managing the software.

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