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, telephone 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, and (4) tracking results to
improve responses.
Step 1: Gather customer data.
he 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.
About the author:
David Frey is the author of the best-selling manual, "The Small Business
Marketing Bible" and the Senior Editor of the "Small Business Marketing Best
Practices Newsletter." To get your free lifetime subscription visit
