Summer 2008
Striking Gold: Gathering and Using Customer Data By Jay Siff

A Twofer: Happy Customers and Strong Sales!

It's called the norm of reciprocity. This powerful social phenomenon states that when people receive unexpected personal gifts or favors, they are often compelled to give something in return. Use this to great advantage in your email offers. Invite women to your store and present them with a no-strings-attached giveaway, such as a half-dozen long-stemmed roses on their birthday. You'll be amazed how many will come in to accept the gift, and buy items at least as valuable as the cost of the roses.

You'll have generated a ton of goodwill for your store - and boosted your sales at the same time - a smart and winning twofer!

If you are like most gift-store retailers, you have many, many customers walking through your doors every day. Are you exploiting the gold mine hidden in their names and email addresses? This information can get you thousands, perhaps tens of thousands, of dollars in new revenue each year. All you have to do to get it is ask.

But that’s the quandary, isn’t it? How do you go about asking for such personal information from your customers? And what do you do with it once you get it? To begin with, you must understand that there are only two valid business reasons for a store to gather data from its customers: to get them to come back (or come back more often), and to get them to increase the amount of money they spend. In each case, you need to offer a strong enticement that takes the customer’s own interest into consideration.

Make it painless

How do you gather personal information? The best way is to make it simple, quick and painless. Place response cards near the cash register so customers can supply information quickly and privately as you ring up the sale. Don’t request more than a first name and email address. That’s all you need. Limiting the amount of information you request will encourage cooperation. Make sure you and your staff always ask for the information during the checkout process. Instead of asking, “Do you want to be on our mailing list?” tie your request to an attractive offer or promise. “Would you like some email coupons for a future visit?” is a good enticement. So is, “Would you like to receive a free gift certificate near your birthday?”

At this point, you’re probably thinking, “But aren’t people wary of receiving junk email?” Today’s educated customers realize that their personal data has value. By sharing it with you, they are making an investment in your store. Your reputation, in their eyes, depends on how well you make their investment pay off.

If a customer expresses reluctance to share information, be sure to stress your store’s strong privacy policy (it’s important to have one if you don’t). Educate the customer about what you’ll do (and not do) with the information gathered. You will send weekly coupons and other treats. You will not sell this information to others or exploit it for any other reason.

The coupon’s in the email

It is a known fact that customers appreciate offers from the businesses they frequent. Gift stores have actually doubled their average sale per customer just by offering a few dollars off a minimum purchase. These kinds of deals can work for you, too.

You’ll be surprised at how your loyal customers—and even your casual customers—will enjoy hearing from you, if you send them attractive offers. Last-minute holiday promotions, gift offers around birthdays and anniversaries, invitations to craft classes (paired with coupons)—all have their appeal when you combine them with a sales-inducing deal.

Of course, some promotions require additional information about birthdays, hobbies or a person’s interest in collectibles. Again, keep it simple. The less you ask for, the more customers will respond. For example, if you ask for the types of merchandise a person is interested in buying, use check boxes. Limit your write-ins to birthdays or anniversary dates. Once you have this information, you can leverage it using creative promotions.

Other considerations

As you grow your email marketing program, you’ll find that success depends on a combination of many factors, including content and timing. Personalized subject lines under 35 characters will also boost the rate at which people open your messages.

Frequency of email is just as important. Once every three to four weeks is best; more often and you’ll become a nuisance, while doing it less often will cause people to forget they ever signed up.

MailerMailer, an email list management company in Rockville, MD, reports that open rates for email from small retail establishments are in the 19 percent to 22 percent range—among the highest of all industries. Click rates—those emails that successfully prompt the recipient to print out a coupon or visit a Web site—hover around 6 percent. Most people open their email within a few hours after it is sent, so even same-day offers are likely to generate a good response.

To further boost your response rate, take the time to create graphic gift certificates or birthday cards that you can paste into your email. Text-based messages are good, but emails that catch the eye are far better.

Tracking is critical

Tracking is one of the most important ways to ensure your customer information is working for you. As you try different offers and promotions, keep track of the number of responses you get, and what kinds of add-on purchases are generated. Run the same promotions on different days, or adjust the dollar amount of the coupon to see what works best. You can also do split runs—sending one offer to half your list and a slightly different one to the other half—to gauge which offer is more effective.

If you have one, two or more offers that are working for you, don’t be afraid to run them multiple times.

Keep running them until the response on one or more starts to fall off. When it does, make whatever adjustments are needed to keep customers engaged.

More sophisticated retail operations may want to investigate other practices as well. Contact-management software, such as ACT! and Goldmine, allows you to cross-reference names against historic sales records to see which customers are likely to respond to a specific promotion. Manufacturers of certain product lines or collectibles (e.g., Hummel figurines) may work with you on a limited-availability promotion.

Finally, you can consider an email service to increase your effectiveness. Professional emailers have proprietary systems designed specifically to deliver legitimate commercial email. By minimizing the effect of firewalls and spam filters, such firms can double the open rates for your offers.

Return on investment

Remember, the data you receive from customers is an investment on their part. It’s a matter of trust. Don’t abuse the data; don’t bury your customers with trivial offers. Do try to target your customers’ interests. If you treat your email list as the gold that it is, and invest in it well, both you and your customers will experience excellent returns.

Jay Siff is CEO of Moving Targets, a Perkasie, PA-based provider of new resident direct marketing programs. The company’s strategic business partner, Loyal Rewards, helps retailers expand their customer base and encourage repeat visits through its unique, email-based business marketing system. Moving Targets and Loyal Rewards have served more than 20,000 merchants nationwide.

Jay Siff

Siff can be reached by email at jay@movingtargets.com. For more information, visit movingtargets.com and loyalrewards.com.




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