Get Ready for the ‘Next’ Economy: Five Smart Retail Marketing Steps

As seen in Chain Store Age

These have been tough times for retailers, and marketing budgets have suffered as a result. Now, the recovery is in sight. But while many of the pundits are saying the recovery is about to begin, they are also projecting that it will be a long, slow road—probably a couple of years—before we are back to pre-2008 levels of consumer (and marketing) spending.

“Experimenting with Facebook or Twitter might be interesting, but ‘hobby’ programs such as this are a distraction from efforts that will have more impact on your bottom line.”

Why waste a big lesson that all the belt-tightening and cutbacks have really driven home? We need to focus on the value of our customer relationships, one by one. And there’s no better time than now to get to know and reach your customers better, so that you will be in a more profitable relationship with them when the economy is in full swing.

Take these five steps to get started now:

1. Think bottom line

Focus on mastering the more traditional direct channels (direct mail, e-mail) instead of dabbling with such projects as social media. Experimenting with Facebook or Twitter might be interesting, but “hobby” programs such as this are a distraction from efforts that will have a more direct impact on your bottom line, like increasing the relevance of your e-mails. Making your messages more relevant and personalized can more than double your conversion rates. Anybody know the ROI for being followed on Twitter? Besides, social media lacks visibility and support at the c-level.

2. Measure results in the long-term

Direct marketing is highly measurable; that’s its stand-out value. Don’t limit analysis to the short-term results of marketing campaigns and programs. Customer-level metrics should be introduced to reveal important behavioral trends and allow more effective customer-centric marketing strategies. For example, calculating customer profitability and tracking it over time will help you make your marketing investments more wisely while steering clear of those customers who have a track record of unprofitable behavior.

3. Make the message fit

Too many retail marketers send undifferentiated messages to their customers and prospects, depressing both short- and long-term response rates. When an e-mail pitch is way off the mark, not only does the recipient not read the e-mail, that person is less likely to open the next one. The damaging long-term effect of “batch and blast” marketing is not to be underestimated.

“Making your messages more relevant can more than double your conversion rates. Anybody know the ROI for being followed on Twitter?”

4. Integrate your marketing channels

Many direct marketers look at the comparable cost of e-mail and direct mail and decide to concentrate their marketing investment in e-mail. If you shift money away from direct mail and into e-mail, you run two risks. First, the volume and frequency of your e-mail to each customer will naturally go up—maybe exceeding reader preference—and could reduce readership and increasing opt-outs. Second, direct mail works much better than e-mail with some customers and you will be missing out on those purchases if you reduce direct mail too much. The best strategy is an integrated one—where e-mail and direct mail (and SMS) are used together in multichannel, multi-wave campaigns designed to optimize customer engagement.

5. Don’t over-discount

Companies too often make the mistake of offering the same discounts to everyone and not adjusting the amount of the discount offered at the customer level. The fact is, not all customers are equal in terms of their sensitivity to discounts and your discounting strategy should reflect that reality. Those who buy only at high discount levels are likely unprofitable and should probably be marketed to sparingly. Conversely, those customers who almost never use a discount should probably receive a different type of message. By customizing your discount offers at the customer level, you will increase profitability.

Warning: Invalid argument supplied for foreach() in /home1/a180/public_html/wp-content/themes/mercury121/sidebar.php on line 6

About the Author

Agency 180 on Facebook