The journey of Red Letter Days to be the UK’s leading provider of entertainment experiences for private and corporate clients is a spectacular one. In 14 years, Red Letter Days has grown from being the brainchild of Rachel Kabra to a market leader with over 100 staff turning over £12 million in business.
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In investigating the reasons for this success, a number of key attributes stand out; the company's vision, dedication, focus and uniqueness. Such characteristics are manifest not only in the general running of the business but also in the way that Red Letter Days has implemented technology, especially that relating to customer management.
Specifically, the company developed a very clear vision of what its technology base would be, and dedicated the required personnel and knowledge resources to make a detailed implementation plan happen. Moreover, Red Letter Days, which has what it believes are unique business challenges and practices, adopted a very singular approach to how the customer management solution was acquired and deployed and how its personnel would be instructed on using it to realise the business vision.
Red Letter Day’s customers are either individual customers buying gifts for friends, or companies buying experiences as part of a sales incentive and/or reward scheme. For this second group, Red Letter Days has a corporate sales team who sell the voucher and point schemes directly. For the consumer side the company has a dual sales strategy. It has a direct sales channel that handles orders via mail order, telephone calls to a customer contact centre and from the company's website. There is also an indirect channel that operates through major retailers such as Selfridges, Debenhams, House of Fraser, Allders and others.
From whatever source the sale comes, Red Letter Days adheres to a consistent business workflow to ensure that the customer is tracked effectively throughout the order fulfilment process. Customers enquiring initially about the company's services will request a brochure, and once the customer receives it, and an order placed, the key data that must be obtained includes not only the potential buyer’s details but also those of the recipient’s, and a delivery address which may be different again. For most other companies in the gift experience industry, when the gift is sent out and received, the customer process ends. For Red Letter Days this is only the half-way stage. A short time after the gift voucher has been sent out the recipient will contact Red Letter Days asking to fulfil the experience that has been purchased on his or her behalf.
As well as time and availability information, Red Letter Days has to confirm that it is a valid voucher with a passcode and that the person wishing to fulfil the voucher is indeed the person for whom it was intended. Only after this process is completed is the booking made.
This two-step, pre- and post-sales process is something that Red Letter Days feels is unique to its industry. It is also something for which a reliable customer information management system is pretty much a prerequisite. Data has to be correct at every point in the chain, from order to fulfilment. Yet until last year, Red Letter Days did not have such a system, and tried to manage its customer information using what was essentially a mail order system.
Business systems director Chris Webb remembers his frustrations when the need for a new system became imperative. “We needed something that could run us through all of the process and that could be easily configured. The company had had two attempts with two previous packages to run its business. What happened was that neither of them quite made it. When you are small you can get by with some mail order packages, but then you end up quickly adding on Access databases and other bits and pieces.
“That works for a bit, but as the volumes go up you find that your inefficiencies grow and you don’t have a scalable solution. So you end up not being able to fully map the process or you end up with an IT department that spends its entire time keeping afloat a bunch of legacy,” he says.
The answer to Red Letter Days’ problems was a highly configurable, reliable, robust CRM system that could properly manage sales data, giving a view of the primary customer while taking into consideration referrals, the source of most of the company’s business. And it had to be flexible enough to map to the company’s business processes. Lessons were learned from the previous attempts. “We had great experience in knowing what didn’t work,” says Webb. “They just weren’t the right ones for this business.”
The system also had to be affordable: Red Letter Days was, and is, an SME. After evaluating four systems Red Letter Days decided to buy 150 seats of the Pivotal Software CRM solution from reseller Touchstone, plus a ledger based system, now owned by Dream, and the Quick Address Pro automated address management software from QAS. The deal was worth in the region of £150,000.
Even though Webb was helped by a very eager management that was fully behind the decision, he had to dampen their exceptions in terms of what was achievable in realistic timescales. “You can’t always redesign a sales process and have it up and running in a couple of weeks. When things were requested and new ideas came up, we had to be able to say that is something that can be delivered in a week or that is a six-month project and get a realistic understanding of what could and couldn’t be done in any particular time,” he asserts.
Given the general difficulties for a SME to successfully manage and execute a significant project involving a large piece of bespoke work, it’s not surprising that Webb admits to a number of problems regarding implementation, and remembers some “blood, sweat and tears”. He says: “It was always ambitious but we pulled it off. We had to support the old system as we were developing the new system. The transition took place just over a weekend; we just closed the call centre down for a weekend and did the data migration.”
Of all the features of Pivotal, Web picks out the price and flexibility as stand-outs. “If you look in the mid-range CRM marketplace there aren’t a lot of proven CRM packages there; a lot of them are fixed in ability and the ones with configurational abilities outside out of the standard sales pipelines are [priced] up into the world of the Siebels… the implementation cost is a hell of a lot more than we could afford.”
What the company could afford was something that totally replaced the old mail order system – “I’m in the fortunate position to say that we have no legacy,” jokes Webb.
Instead of Red Letter Day’s IT department spending a lot of time keeping systems up and running and ticking over, the IT function concentrates on supporting a continued development presence. The technology follows sales and marketing leads when new initiatives arrive and is also flexible enough to adapt easily to changes in business process changes when required.
These and other crucial adaptations will be made by in-house staff. Touchstone did some configuration work – in particular integrating a web site to the overall system – but to Webb, having a business critical system that supported a high element of continuous development processes meant that in-house development was the way to go. He says: “It’s a question of your implementation strategy and what’s going to happen in the future. If you have a business such as ours – that is 14 years old but still entrepreneurial – you can’t really do anything other than accept that what you do one year is going to change one way or another in the next.
“The kind of approach, where we have a third party come in, understand our business and write us a system which then really doesn’t change fundamentally, is not correct. If you know that you are always going to have a development requirement of three-plus people over the next two to three years, because so much is changing in the business, then it’s cheaper to have these [development] people in-house.”
Education and training, despite being areas where resellers have provided valuable (and for them lucrative) services, were also deemed in-house activities. Webb explains the rationale: “Because we want to give great customer service we consider looking after our own training as a core item. I feel a CRM system is absolutely core to the business to the business process to the customer service element.”
Red Letter Days was perhaps fortunate in having its own tutors for training call centre staff and the developed training services were also utilised for CRM system training. In using the CRM system, staff learned the Red Letter Day processes and not just skills to use the technology per se.
This resulted in some very measured but specific training. For the corporate sales team, used to standard sales pipeline training systems, the trainers turned off, for the first six months or so, many of the features available within Pivotal. The idea was that they would master the core more quickly and without all-encompassing training in all functions. That was deemed something that would likely be counterproductive, because parts of what would be taught would probably not be remembered and, most importantly, it would take up too much of the sales people’s valuable time. After six months these functions were switched on, and then the extra knowledge was built up incrementally. To Red Letter Days it was unrealistic to train everyone in everything from day one.
Webb doesn’t have any real disappointment with what he’s got, but he does feel that the company should have gone forward quicker with a business process re-engineering exercise after initial implementation two years ago. He remembers the timescales as too short and at the time, October 2001, there were more pressing issues, such as the imminent pre-Christmas selling season. “If I’d have had more time then we’d have undergone the process re-engineering in parallel with the system development. That’s business; you can’t always do things when you want to.”
Expansion is very much on the agenda. The firm’s Dell PC hardware infrastructure, says Webb, can be scaled up to five times its current load without server “issues”. An imminent task will be to integrate the CRM and company accounting systems to boost process improvement and accuracy. The aim will be to use the CRM system as the basis for making easily implemented process changes that follow the business plan. The key is getting the vision in place early. Says Webb: “If you get the concept right, everything flows from it. Getting the thinking right makes implementation a hell of a lot easier.”
Red Letter lessons
Chris Webb’s key CRM implementation lessons:
1. Make sure your process is well-planned.
2. Ensure you have top-quality communications throughout the business.
3. Involve the right people at the right time, the whole way through your project.
4. Don’t bite off too much in any one mouthful.
5. Given typically limited resources, be realistic and pragmatic while aiming to meet your business strategy.