Brown & Williamson Invests in CRM

Brown & Williamson Tobacco Corp. has signed a five-year, eight-figure contract with KnowledgeBase Marketing Inc. for customer relationship management technology and analytic services.

The sizable investment marks a sea change in the industry’s outlook on the importance of direct marketing: As recently as 1999, the top five U.S. cigarette companies spent just a little under $95 million on direct mail, out of total marketing expenditures of $8.24 billion. Internet and telephone-based marketing levels were negligible that year.

The deal also comes at a time when legislative restrictions have curtailed the marketing channels available to tobacco companies.

Brown & Williamson’s cigarette brands include Kool, Pall Mall, Lucky Strike, Capri and Misty. Direct-sold cigarettes traditionally have made up a very small portion of the tobacco industry’s sales: According to census data, as of 1997 online and mail order sales comprised only 0.3% of overall revenue.

In announcing the agreement, Brown & Williamson did not specify whether the new system would focus on facilitating direct-to-consumer cigarette sales or marketing communications that would drive customers to retail outlets.

But Brown & Williamson has historically been at the forefront of smoker-focused sales efforts. In October 2000 it launched BWT Direct LLC, a direct-to-consumer subsidiary. Within its first six months of operation, BWT Direct generated 30,000 orders from its catalogs, with each order consisting of a minimum of two cartons.

KnowledgeBase will use its Impact CRM system to coordinate messages between consumers who have opted in to receive messages from Brown & Williamson. The Richardson, TX data firm will synthesize B&W’s multisource identity verification efforts, which prevent the Louisville, KY-based tobacco company from contacting underage consumers or adults who don’t want information on tobacco products.

While details about the new system were not released, in the past Brown & Williamson’s identification processes has included matching the customer’s name, address and birth date to either an internally maintained database or one run by an outside vendor. The customer then submits an age-verification kit, which includes a signed certification of the customer’s age, as well as a copy of a valid government ID.

The new system also will allow inbound communication center representatives to access this information in real time, so they can immediately provide service and sales to callers. The system will also aggregate orders that come in from fax, Internet and mail channels.

KnowledgeBase Marketing will provide a combination of analytics, real-time campaign reporting and call center integration services, which will let Brown & Williamson make adjustments to its creative and placement efforts in mid-campaign, if that should be necssary.