The Ultimate CRM Machine

Denise Campbell has been hooked on the Internet since 1991. So it was no surprise that she was one of the first Avon ladies to sign up for Avon's "e-representative" program in the summer of 2000. Campbell launched and now operates her own Avon Web site, youravon.com/dcampbell, checks the status of her orders online and sends her computerized customers e-mail alerts about Anew Retroactive age-reversal cream, Little Black Dress perfume and Skin-So-Soft bug repellent. Campbell even uses the Net to recruit new Avon ladies and to share information with those "downline" representatives reporting to her.

So why was this North Providence, R.I., Avon lady sweltering this summer in a booth on the grounds of the annual South County Hot Air Balloon Festival, rather than sitting in her air-conditioned home and raking in the Web orders?

Because, to Campbell, there's still no better way to sell Courageous Courage lipstick than to let a potential customer see it, handle it and ask face-to-face questions about it. Campbell handed out the latest Avon catalogs to some of her old friends, as well as to prospects. She hawked raffle chances for a basket of Avon goodies. And she shook hands, the old-fashioned way.

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Campbell, who has sold Avon products for nine years, only gets only about 6% of her orders from her Web site, and another 6% from e-mail, despite her active Web efforts. Her biggest customer still doesn't have a computer, she acknowledges. So, house calls are still the best way to make direct selling work.

Avon's top brass knows this to be true, as well.

"Everything that you'd look at as a textbook version of what CRM is about, the (Avon rep) is doing with her customers," says chief information officer Harriet Edelman. "They know the product lines they like, the birthdays coming up. They do the customization, the personalization, the outbound marketing. It's all very one-to-one."

Indeed, Avon uses 572,000 women like Campbell in the United States—and 3.4 million like her around the world—to produce 98% of its $5.7 billion in annual sales.

But in spite of Avon's rep-centrism, this 115-year-old cosmetics and collectibles company not too long ago was considering whether to abandon its tried-and-true sales channel. At the height of the hype around the Internet and how it was going to revolutionize all of global business, Avon weighed the benefits and costs of the unthinkable: Doing away with the Avon ladies—and just selling to buyers over the Web.

The promises were plentiful. Instant global reach, with thousands of products and prices that could be constantly updated, around the clock. No printing and reprinting of scores of millions of glossy catalogs every two weeks. No handling pages and pages of order forms filled in with No. 2 pencils. Fewer worries about reps defecting or resigning.

In the end, technology for technology's sake wasn't the answer for Avon. The company ended up rejecting a pure clicks alternative in favor of a "representative-centric" Web sales model. And, for now, the company has held off from deploying customer relationship management (CRM) software to codify its customer-support functions. Instead, Avon has relied on the low-tech kitchen kibitzing of its Avon ladies to provide the personalization, customization, customer retention and other deliverables attributed to CRM packages.