Tag Archives: Database Marketing

Using Point-of-Sale to Improve Profitability

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Here’s a story from Marketer David Frey in the US. The lessons are clear.

Not long ago I made a trip over to the local Radio Shack to purchase an electronic plug for my cassette recorder. As I paid for my item the retail clerk asked me for my name, address, cellphone number, birth date, and even my email address (something every retailer should be asking for today!).

Although I felt a twinge of discomfort giving out my personal information, I went ahead and gave it to him and went on my way.

Driving home I reflected on Radio Shack’s checkout process and was reminded of the power of information gathering at the point of sale. I had just given Radio Shack three ways to contact me, not to mention, information on what I had purchased. In the hands of a skilled marketer, this information is powerful.

Database Marketing

The recent economic slowdown has brought increased competition to small businesses. And with that, retailers across North America have described their sales as “flat.” Small businesses should be looking for low cost, high impact marketing activities to drive prospects to their business.

One of the most effective and cost-efficient ways to add profits to the bottom line is the use of database marketing, which uses information collected at the point-of-sale.

Using personal data, purchasing data, and contact information from a customer database, a spa and pool retailer can make offers to customers for complimentary products and services and engage in loyalty marketing activities.

Database marketing has four key elements:

(1) gathering customer data
(2) building a customer database
(3) creating targeted offers for specific customer groups
(4) tracking results to improve responses

  • Step 1: Gather customer data. The easiest way to begin this process is to develop a simple form for customers and salespeople to fill out every time a customer purchases a product or service. Include personal information such as names of spouses, children, profession, and birthdays, as well as product information such as manufacturer, make, and model.
  • Step 2: Build a database to store your customer information. Start simple using off-the-shelf software such as Microsoft Access. Later on you can begin to modify the database to either include different types of information or to print special reports.
  • Step 3: Start sending offers and personal messages to your customers. Don’t wait until you have a large mailing list. Begin sending notes to customers right away thanking them for their purchase, to celebrate birthdays, share holiday messages, and inviting them to come in and take advantage of special offers. There is an old saying that goes, “Business goes where business is invited, and stays where it is appreciated.” A personalized invitation to drop by the store to take advantage of a specific incentive is sometimes all that is needed to keep your customers coming back into the store. Instituting a program of personal, hand-signed notes that coincide with birthdays or special events addressed to the customer’s significant other that offer gift ideas, can have surprising results.
  • Step 4: Track the results of your database marketing efforts. By knowing who you sent offers to and who responded will help you identify your best customers, allow you to more effectively allocate your marketing dollars, and help you tweak your marketing pieces to get higher response rates.

What Information Do I Collect?

It’s important to determine in advance the type of information to collect. To do this, make a list of common special offers you might be presenting to your customer.

For instance, if you sold a product in the health industry and many of your customers have lower back problems you could joint venture with other businesses to develop special promotions on products that help to relieve lower back pain.

To capture the fact that your customer experiences lower back pain, simply place a check box on your form that says, “Do you experience lower back pain?”

If your customer has small children, consider presenting follow-up offers for products targeted for small children. Imagine being a consumer and receiving a letter from your business with an enclosed birthday card for little Joey who just turned eight years old and a discount offer for a basketball hoop or other relevant products.

You think to yourself, “What a great gift. Joey would love that!” This is the power of database marketing.

Collecting Accurate and Consistent Information

Database marketing all starts at the point of sale. Without accurate, complete, and consistent data this type of pinpoint target marketing can’t be done. To ensure that your information is accurate and consistent, help your customers fill out the data collection form and review each information form for completeness.

You might experience a hesitancy from your customer to give out all their personal information, similar to how I felt at Radio Shack. However, after explaining that the information will only be used to send out special offers during important events, is completely confidential, and will not be shared with anybody else, you’ll find that most of your customers won’t have any problem giving out their personal information.

Cost Effective Loyal Customers

Marketing to your current customers is one of the most effective and cost-efficient strategies you can do to reduce your marketing costs, enhance your customer / retailer relationships, and produce long-term loyal customers who, over a period of months or years, become your biggest source of referrals.

Thanks for the tips David. Today even the CRM technology is easy. In fact for those starting with nothing it’s actually better. Those big Corporates with their legacy databases inevitably have to spend lots of time and money cleaning things up first. Small businesses can start within a few weeks.

To get started, email East Coast Graphics today!

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Thomas D. Glenn
East Coast Graphics, Inc.
p. 631.231.9300 xt.11  |  f. 631.231.5159
ECoastGraphics.com

The Road to One-to-One Marketing

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A close-up look at how a concierge service is successfully using one-to-one marketing, and what this approach involves.

Many are calling it the smartest new way to make any company more valuable to its customers — and more competitive. Can one-to-one marketing work for you? It has for Capitol Concierge.

Like every company builder who finds success, Mary Naylor has more than once been blessed. Some of her good fortune was standard issue: Her two investors turned out to be “phenomenal mentors.” And her hometown of Washington, D.C., turned out to be the perfect locale for her company, Capitol Concierge — which sets up concierges in office-building lobbies to provide personal and business services, from picking up dry cleaning to managing a catered lunch.

But the best blessing was one few founders would deem a blessing at all: the business Naylor stumbled onto turned out to be so demanding that survival depended not just on satisfying customer needs with alarming proficiency but on learning enough about customers one by one to anticipate their needs even before they knew they had them. For Naylor’s company, now at $5 million and expanding fast enough to make last year’s Inc. 500, great customer service was just the market’s cost of entry. What was required to stay alive — let alone grow — was one-to-one marketing.

Which would have been fine, probably, if Naylor had known what it was.

* * *

Today savvy marketers everywhere rue the runaway costs of acquiring new customers. The savviest, one of whom the 32-year-old Naylor has determinedly become, go further. They’ve responded to those costs and a host of other competitive pressures by focusing not on accumulating more customers but on getting more business from the customers they already have. They aim not to find customers for their products and services but to find products and services for their customers — the deceptively simple theme of the recent business best-seller The One to One Future: Building Relationships One Customer at a Time. (“You can reduce almost every principle in the book to that basic truth,” says coauthor Don Peppers, a former advertising executive.)

One-to-one marketing borrows from several popular marketing concepts: relationship marketing, database marketing, customer-satisfaction initiatives, and even airline frequent-flier programs. It champions the use of now-popular technology to identify, track, and interact with individual customers — noting “every transaction, every time they call to ask a question or make a complaint,” says Martha Rogers, Peppers’s coauthor and partner on the lecture circuit. (See “Ask the Marketing Doctors,” for the pair’s advice to the sales-lorn.) Dale Carnegie meets Bill Gates? Sort of. But it’s not as expensive or time-consuming as that sounds — not given how much more profitable it is to win repeat business than to chase new prospects. And if technology is the glue of one-to-one marketing, you still needn’t be a Net head or an ACT addict to get started. You just need a different point of view. Forget market share and economies of scale. Think customer share and economies of scope. Fortunately, the customer-share mentality comes easily to entrepreneurs. The corner grocer was the original one-to-one marketer.

Nowadays, Speedy Car Wash, in Panama City, Fla., inputs license-plate numbers to instantly identify customers by name and retrieve information about previous visits, such as whether they like the trunk vacuumed or the window seams washed — or whether they are due a discount on waxing. A Seattle country-music station sponsors not only a listeners’ club but also a toll-free line listeners can use to respond to individual ads. You may have heard of Peapod, the Chicago virtual grocery store that takes your order by PC and remembers your brand of peanut butter. In Burlington, Mass., Individual Inc. produces a customized business newsletter that’s downloaded to your fax or computer. And Oriental Trading Co., an Omaha direct marketer with millions of customers, responds individually to people who order Alleluia kites, Jesus Loves Me bracelets, and praying-hands stickers from its main catalog by sending them its Inspirations catalog.

Smart and economical tactics, all. In fact, Peppers and Rogers’s one-to-one tract might have been subtitled “How to Beat the Big Guys by Changing the Rules” — except that the big guys are doing this stuff, too. Federal Express’s intricate package-tracking system reveals worlds about its corporate clients. If you subscribe to Time, you may have noticed a recent offer from Godiva with your name on it — fill out a survey and receive a chocolate-dipped strawberry. And Levi’s custom fits blue jeans according to your measurements.

Read the full article here