Hannalore Schmidt, Reflect.com's Consumer Delight & Loyalty Director on Retaining Online Customers

Hannalore Schmidt of Reflect.com, an online beauty service which lets women customize their own skincare, hair care, cosmetics and fragrances, has title that's even more exotic than her name: Director of Consumer Delight & Loyalty. After chatting with her, we wanted to go online and become new Reflect customers right away. We also suspect that many ecommerce executives from other companies order Reflect products simply to learn from their customer retention techniques. Here's why:

Q: In these increasingly lean and mean times why did Reflect feel it was necessary to have a "Director of Consumer Delight and Loyalty"?

Schmidt: There's a paradigm at department store cosmetic counters that you get a gift bag. It's these bonuses that drive purchases. Our products are customized so we can't copy that program. But we wanted to "delight her at every stage of the process."

So, after she places her first order she gets two stems of orchids. We work with ProFlowers to send them fresh cut from the grower via two-day express along with a thank you note. Women are so excited to get it -- it exceeds all their expectations. We get a lot of word of mouth that way, it's anecdotal, "I told everyone at the office."

We don't do the same level for every purchase after that, but we always try to include some delightful extra -- a pretty silver compact mirror, a t-shirt, a travel bag.

Q: I can see how that would delight customers, but what if they don't like the customized product you've sold them?

Schmidt: You can't return customized products. So if she's not delighted with say a lipstick, customer service tells her to keep it and work with us to re-customize the product to make it better for her. Most people would call that service recovery. We tell customers, "we're not perfect and we're still learning. If we make a mistake we have a program to keep your business. Give us one more chance."

We send a very honest handwritten note saying, "I'm sorry you had a bad experience." If we are out of an ingredient, we'll also send you a couple of gift certificates to Starbucks. If we really screw up in an unforgivable way, we'll send you a full bouquet of flowers.

Q: Wow! Are you using in-house or out-sourced customer service reps?

Schmidt: We use all internal. At first we used external, but they couldn't really provide the "Nordstroms" level of service we wanted. The women weren't as committed as we needed to be. They wouldn't go the extra mile for the customer.

Now we have ten in-house providing service from 11-11 Eastern time seven days a week. They are a very dedicated team. We give them equity in the company. We had certain types of people we wanted to hire: very, very personable and smart. They are empowered to go ahead, make decisions and give consumers something extra.

Q: Lucky customers! How do you drive traffic to the site so women learn about you in the first place?

Schmidt: We don't look for a specific age demographic. Our best target audience are women who have purchases online already. There are a lot of women online but they aren't necessarily comfortable purchasing there yet. We are testing a program now putting offers on online order confirmation pages at other sites where women shop, such as Garden.com. They've made the leap and purchased and they have a credit card in hand!

Q: Studies show women like email. What are you doing there for acquisition?

Schmidt: We target lists where women have opted-in to a beauty or fashion forum or shopped online. We use the same principals for direct mail. We send personalized museum quality cards taking the product images from our print campaigns and putting the recipient's name on the bottles. So it might say, "Erin's Shampoo". It includes a special offer such as a gift certificate to get free conditioner when you buy the shampoo.

We've tested a lot of branding, a lot of images. The biggest thing we've found for email is you have to keep it short, to the point and not too fluffy. "We're all about this, here's why that's important to you and here's an offer." Very simple and straight to the point.

We have monthly goals and we try to hit a lower acquisition cost per customer every month.

We also send customized emails to current registrants to strengthen relationships. They contain value-added types of information. If she lives in New Orleans where it's humid and has curly hair, we might send tips on how she can keep her hair from frizzing.

Q: Have you done any offline marketing?

Schmidt: We've tested magazines. We started with beauty magazines and arte now going broader. We've really evolved creative. The first launch was focused on empowerment, the higher order of benefits -- you can be creative, etc. Women didn't really get it. The whole idea of customizing was hard to grasp so it didn't work to jump to emotional benefits they didn't understand.

Q: Shopping cart abandonment is a huge problem for most ecommerce sites. How do you reduce it?

Schmidt: The biggest reason women abandon carts is that they go through the process and they had a great time, but they're not really sure who the company is and how the product will work for her.

We added feedback throughout the shopping process that tells her why the product is right for her. "You've told me you have color treated hair and your hair tends to be frizzy, so...." Every time she tells us something, we help her see why the product just created is right for her.

We get her email address right at the beginning -- we say before you create a Web site we need an identifier for you. People are very worried about their privacy because we're asking for such personal information; so, we have one of the strongest privacy policies on the Web.

After she's abandoned her shopping cart, we communicate via email. "Hey I noticed you left something, is there something wrong? Can we help you fix it?" What really works is a visual next to copy saying, "Name's Shampoo created on Date" And we'll add an offer to try some conditioner with that.

Q: Are you interested in any partnerships?

Schmidt: We'd love to partner with companies that deal in customization with a substantial number of women purchasing online!

http://www.reflect.com