Skechers USA Inc.’s Chairman and CEO Robert Greenberg is trying to stay one fashionable step ahead of the competition. The founder of L.A. Gear, a 1980s household name, now sells trendy footwear primarily targeted to 12- to 24-year-olds with his Skechers brand footwear. Currently, Skechers are sold in stores in more than 100 countries, through the company’s consumer catalog, and over its Web site.
This multichannel strategy helped the $943 million company build a massive consumer catalog division with 25 million recipients worldwide by 2001. So why, in the fourth quarter of 2001, would Skechers management lay off all 42 employees in the consumer catalog division and cease its e-commerce initiatives? The division was losing too much money, says Geric Johnson, vice president of direct marketing at Skechers USA.
Customer support costs were simply outweighing sales. Skechers had been receiving approximately 9,000 emails each month in the second half of 2001. The company had been working with a third-party outsourcer to resolve email queries, but Johnson says it wasn’t working out. “It was rather expensive,” he recalls. Plus, he could not ensure a high quality customer interaction. “The commitment to customer satisfaction is not achieved through the outsourced vendor the same way your own in-house staff could do it,” he says.
To save the consumer catalog business, Johnson set out to find something better. At a trade show he came across a RightNow Technologies’ sales rep, who introduced Johnson to a way to have customer support efforts hosted via an application service provider (ASP) model. “I was attracted to the ASP model that RightNow employs. I like not having to involve my IT staff, which is already up to its armpits in projects,” he says.
Johnson relayed his findings to his management team, still trying to convince them of the value of the catalog business. The hosted model, Johnson argued, could support an email-only communication with customers. “Part of my argument that that business model would work for Skechers was based on an email marketing tool that would allow us to support this business market,” Johnson says.
Management bought his idea just before Thanksgiving 2001. In early January 2002 Skechers started implementing the email-response management and self-service solutions within RightNow’s eService Center. Johnson rehired some of his former employees, and within five days his staff was trained and the eService Center was online. “We started on a Monday and by Friday night we were handling email queries ourselves,” Johnson boasts.
In just a matter of weeks Johnson’s newly formed consumer catalog and e-commerce division was performing better than ever. Because of RightNow’s Web self-help capabilities, Skechers cut its email queries in half, to 4,500 each month. Skechers can capture more customer information for marketing purposes. All of this is now done with one tenth the old staff size, Johnson says. Additionally, he says, Skechers catalog and e-commerce business broke its downward sales trend and started to notice a marginal sales increase.
“We’re now providing our consumers with a better level of service, and as a result we are getting more repeat business,” Johnson says.
In the fall Skechers plans to use the cross-selling and upselling capabilities within RightNow’s eService Center when it introduces its first line of apparel. –David Myron
The Payoff
RightNow’s eService Center helped Skechers…
- provide a better level of customer support;
- cut monthly email queries in half;
- capture more customer information for marketing purposes;
- cut customer support staff to one tenth its original size;
- notice a marginal sales increase.
*Originally pulished in CRM Magazine
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In his capacity as senior editor of CRM magazine, David Myron is responsible for writing and reporting cover and feature stories. He is also in charge of coordinating the Edge news items and identifying specific areas of coverage. Myron returns to FTMG after his stay at Ziff Davis’ IT Insider Series, a publication from PC Magazine. In his first stint at FTMG, he served as the founding editor of Small Business Solutions Provider, a monthly supplement inside of Small Business Computing magazine, and as the founding online editor of the Small Business Computing and Home Office Computing Web sites. Prior to that, Myron served as the small-business editor at CMP Media’s VARBusiness magazine, where he won an APEX award for feature writing for the article “How E-Savvy Are You?” He received a B.A. in print journalism from Hofstra University.
